Goodbye, DVD Industry!

The DVD industry has been my life’s work for over a decade now. I was there when the first players from Panasonic showed up at Digitainment in Whippany, NJ and I became as addicted as anyone ever could to the format which went on the change the film industry. I made it my career, in part because I liked it so much but also because I was good at it. I figured that someone who really cares about the format is better at selling them than some pinhead who’s just looking for a job. I’ve worked for one-stop distributors, I’ve done DVD label management for exclusive distributors, I’ve been a critic and a publicist and I’ve been paid to do all those jobs. But doing one thing for so damn long is bound to bring with it a certain burnout, but with DVD it’s gotten much worse. This industry actually used to be fun, discovering old films and bringing them out to the a new audience looking better than they ever have before, but now it’s becoming a burden. The market is evaporating to the extent that it’s killing off great labels and killing off any enthusiasm anyone has for putting together DVDs. I still love the format, but I can’t do this anymore; I’m out. I mean I am literally out of it, moved to Austin to work for a great film festival and no longer having to concern myself about how you can sell obscure (but good) indie titles to an overcrowded marketplace. I still care, but I can’t do that anymore.

It’s occurred to me that not many people really know the ins and outs of the DVD industry, especially the millions of film fans who continue to be its lifeblood and support the labels that matter. Many people foolishly assume that these labels are making the big bucks and that the people who run them are spending their weekends on their yachts, but they’re mostly lucky to make ends meet. Because of the death of the CD (a slow, torturous process), many outside the industry have simply assumed that digital downloading will take the place of DVDs; while that may some day be the case, we’re actually a long ways off from it and the parameters (Will downloads or On Demand PPV be the prominent service? Who will the major players be?) are a long ways from being determined, so don’t come to bury and not praise the DVD any time soon. Plenty of new and old titles will be available for quite a while, although getting them isn’t going to be as easy as it once was, through no fault of you or the studios. Retail is going through some major shifts that you should all be aware of, because if you happen to love DVDs it will affect how you purchase them and what else comes out down the road. Pay attention.

Four years ago, I was working for a major independent music and DVD distributor and the market was good. I was the company’s DVD guy, bringing in third party indie DVD labels for distribution and working with the sales team on getting their titles sold, and it was good work because we were hitting our goals. There were more retailers available; they all got what we were selling and they all wanted in. You could typically rely on Best Buy for a minimum order of about 1200 units that they would hold on to for about 90 days; now, you’re lucky they take any indie titles at all (only if the title is some kind of known quantity, like a cult classic horror movie or was a successful theatrical release) and the title has 30 days to prove itself on the shelves or else it goes back to the distributor. Four years ago, you also had Tower, the Suncoast and Musicland stores, and the Virgin Megastores, all of which have gone out of business, though Virgin holds on to a handful of stores, while the Trans World chain (FYE, Coconuts and Saturday Matinee) struggles to survive. Borders and Barnes & Noble used to be reliable for decent numbers, but not anymore; they avoid indie titles for the most part now, and classic catalog titles are mostly verboten, while rumors of Borders’ demise (they have publicly stated that they’re for sale) continue to grow. Target and Walmart never took an interest in indie, cult films or classic catalog, only major studio titles (Best Buy is the same now), so they never really mattered. As for the online retailers, Amazon’s great as long as folks want your title, but if they don’t know what it is, the orders will match that attitude, while most of the other online retailers follow the same route. You used to be able to go out with about 4,000 to 5,000 units with a return rate of 20%, 25% at most, but now you’re lucky if you can get 2,000 units out the door and that return rate and be 40% if you’re not lucky. Ask most indie DVD manufacturers right now and they’ll all tell you the same thing – the market fucking sucks right now and will probably never improve.

So how did this happen? Lots of reasons:

1) Overload. Too many titles and too many SKU’s taking up shelf space. When Warners offers 4 different variations of the new HARRY POTTER DVD, it’s taking away shelf space from newer, more interesting titles from Criterion, Synapse, Kino, and all the others. And no one is adding any new shelf space.

2) TV on DVD. It’s great to have all of your favorite TV shows on disc, but all those shows are also taking away that shelf space from your favorite indies. And keep in mind that those TV shows have bigger boxes and last several seasons.

3) The buyers are fucking idiots. This is what the labels and distributors always discuss amongst themselves but can never acknowledge in public, that most, if not all, of these chains employ buyers for their chains that know next to nothing about movies. The way these things usually go, the buyers are always shifted around; last month you were buying computer parts, this month you’re buying DVDs. These people may “like” movies, but their knowledge of them is pretty much nil; the titles are just that – titles on a list. In a sense it doesn’t quite matter if the buyers know movies, as everyone has to work within their budget, but it certainly helps all concerned if the chains were able to make more informed decisions, don’t you think? Oh, I’m sorry, but that would make sense.

4) Netflix. Some people think it’s the great equalizer, and I love the fact that they make a point of getting every title they can get their hands on. But for indie titles they only buy a box at most (30 units) and will buy more only if it rents like crazy. Which is part of the other problem, that consumers pass over buying most titles because they think they can just rent it on Netflix at any old time. And don’t depend on Blockbuster, either. If you’ve got an urban comedy or you won the Oscar for Best Documentary, then OK, you’re in, but otherwise you’re going to go hungry waiting for them to make a buy. I’ve dealt with them on numerous occasions and they’re fairly reasonable people; they pay close attention to what works for them vs. what doesn’t and will make changes accordingly, but most indie titles are M.I.A., while classic catalog is all but forgotten. Seriously – go to your local Blockbuster and look to see if they have any Bette Davis films to rent. Good luck on that one.

5) Indie overload. Every idiot wants to make a movie these days and with digital technology those dreams are becoming realities. But how many of them are any good? Not many, but plenty of them get picked up for peanuts and get picked up by tiny labels that want to be the next Magnolia. Those titles tend to sell in the hundreds of units. Same goes for most arthouse titles, too.

This is not exactly to say that the majors are doing all that great, either. The classic catalog titles are still coming out (and god bless Warners and Fox for their commitment to them, while I damn Columbia for sitting on the Randolph Scott/Budd Beotticher films) but they’re not selling as well as they once did, either. Still, the mere fact that Warners can get their gangster series and star collections into the big chains is a small victory for classic movie lovers. Criterion can still have hits (titles like IF… and THE LAST EMPEROR did extremely well), though some of the more obscure foreign films struggle despite the Criterion name (and no, they’re not budging on those price points). Lionsgate’s recent purging of the Canal + catalog, with the Alain Deleon and Bridgette Bardot sets have racked some decent numbers, but they hardly promote them and are getting by on press alone. Dave Kehr’s Tuesday column in the New York Times has been a big plus to any title he writes up (they always see a nice Amazon bump), but he’s one of the few major press players left who writes about the likes of Abel Gance or even LADY TERMINATOR in a major American publication of any kind. I honestly can’t think of a single online DVD critic who carries the same weight (sorry, Michael Den Boer). Meanwhile, you’ve got bloggers and supposed “critics” hitting up labels for review copies only because they don’t want to pay for them, though no one at the labels has ever bothered to inform them just how insignificant those reviews can be.

So where are things going, exactly? Buddy, if I knew the answer to that I would have stayed in the business and become a very rich man. Things will become worse before they get better and some great labels will probably go out of business in the next year or so. People point to Blu-Ray as a possible savior, and as cool as that is, it’s basically the DVD variation of laserdisc, something for the die hards and the videophiles. Those few indies who have ventured into that world have discovered that the costs of putting out a Blu-Ray disc will make it tougher to recoup (at least at this point in time), especially when the likes of Best Buy still resist indie and genre films on the new format. This is leaving a lot of great labels in a bind, as they struggle to stay afloat and not just acquire new titles but to release titles that they acquired when business was better. The well isn’t as dry as you would think; although some licensors are still living in the early Aughties and are asking for too much money for some titles, plenty of interesting stuff is making its way that needs to be seen. The floodgates for films from all over the world (like the current Nikattsu series touring around the states) are still gushing and should continue for a while, but who’s going to put them out if more labels tend to go under? Any new labels that bravely try to get into the biz will soon learn that there’s no real money in it, and while this should be more about the greater good of cinema than making money, it can’t pay for itself. There are too many movies out there and too many that need to be seen. You can’t watch them all.

I’ll certainly keep paying attention to the ins and outs of the industry and I’ll keep in touch with all of my friends still involved in it, but it would take something stellar to lure me back in. They’re wonderful things, these DVDs, but to work them is too much of a chore that I no longer want any part of. Good luck to those who are.