The early focus for DVD was how to handle the “window” from theatrical to the home entertainment packaged media marketplace. VHS locked in at around six months from the time a film opened theatrically until it appeared at your local video rental store.
With DVD, since everything was sell-through pricing, there had to be a quicker pace to cash in on the sales aspect. This is where the money is in Hollywood, new theatrical releases, which in turn serve all of the down-stream revenue venues … such as home entertainment, cable, network and now streaming.
In the launch year of DVD, there were 13 theatrical releases, with a box office profile of $25 million or more in ticket sales, that managed to make the transition by the end of the year. It took, on average, 153 days to make the cycle.
But a backlog was building up. Some studios were slow to the table and the following year, 1998, the 59 films that made the cycle and did so in 200 days on average.
In 1999, 70 films opened theatrically and found their way to DVD in 180 days. Thus, we are three-years into the format and the window (ARR — Asset Rollover Rate) is looking a lot like VHS.
In 2000, 85 films made the trek at an average of 176 days (not much change). From this plateau, things begin to change in 2001, the movie theatres were churning out roughly two hit films each week (defined as $25 million or more in ticket sales) and the conveyor belt was picking up speed. 87 films made the turn in 2001 at 168 days; 2002 saw 100 films do it in 171 days and 2003 delivered 95 hit films in 153 days. The movement to quicker turns from theatres to home entertainment was now clear.
By 2012 the pace had dropped down to 114 days. Here it stayed during 2013, 2014 and 2015 … an equilibrium had been established. A full week was shaved-off the pace in 2016 as a record 103 films arrived home in 108 days.
Another week disappeared in 2017 when 91 films made the turn in 101 days. Then another equilibrium was established in 2018 and 2019 (can you see what is about to happen?) with 96/97 days being the new standard for hit films arriving from theatres as DVD, Blu-ray and 4K Ultra HD product offerings.
And then the Covid panic set in. Hit films dried up. Netflix, Amazon Prime and the various studio streaming platforms diverted big-budget films from shuttered multiplexes to direct-to-video debuts (the math is a little fuzzy, but that’s a discussion for another time).
2020 had a gap from March 13 until August 20 where not a single high-profile film was released theatrically. Can you imagine the impact of that on the industry? On Hollywood? Just 39 films for the entire year in an average of 93 days.
But it got worse! 2021 saw a measly 31 films abandon theatrical venues and head home in just 80 days, the new normal. Rub your eyes, doubt it, but an entire year slipped by with just 31 hit theatrical films serving the home entertainment packaged media marketplace.
Next week … the new normal!
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