No Theater? No Problem; Direct-to-dvd Takes Off

Sexual innuendo involving clarinets may not be your cup of tea, but the "American Pie" series of films has resonated with consumers to the tune of more than $351 million in receipts.

No surprise, then, that the latest offering of the franchise, "American Pie Presents Band Camp," was a hit. What is interesting is that it did not happen in the theaters.

Universal Studios Home Entertainment opted to release the film Dec. 26 as a direct-to-DVD title, and it moved more than 1 million units in its first week of sales.

This direct-to-DVD release strategy is catching on with the major studios, as titles garner notable sales without the need for big theatrical budgets.

"There is an increasing desire for these products," says Tom Siegrist, VP of production for Fox Home Entertainment Productions. "I'm seeing each new DVD premiere outdo itself."

The studios contacted by Billboard did not provide specific sales figures on their recent direct-to-DVD releases, though they do say that sales are strong for the category.

Recent direct-to-DVD successes include Universal's "Carlito's Way—Rise to Power" and "Bring It On Again" and Twentieth Century Fox Home Entertainment's "The Sandlot 2."

While theatrical DVDs can sell more than three times the first week total of "Band Camp"—Universal's "The 40-Year-Old Virgin" sold 3.7 million in its first week on sale in December—a million units is quite a feat for a title without theatrical release.

Many studios have had home video divisions to produce direct-to-DVD titles for years, but executives contacted by Billboard say that greenlighting new projects is becoming easier as movie attendance declines.

"People's lifestyles are just different today," says Kevin Kasha, senior VP of acquisitions and programming for New Line Home Entertainment. "There's just not enough time in the day to get out to the theater. These titles are great because they offer audiences more choices."

Studio executives are also betting that as the home theater experience improves, consumers will be even more motivated to rent and buy DVD-only releases.

"The line between watching movies in theaters and in the comfort of your home is becoming very blurry these days with big-screen TVs and the upcoming high-def DVDs," Kasha says. "As these technologies make their way into the living room, that is great for these DVDs."

The Consumer Electronics Assn. predicts that high-definition digital TVs will outsell analog sets by 89% by year's end, and that consumers will spend $23 billion on HD TVs. According to the CEA, 85% of the 12 million digital TVs shipped last year were HD sets.

Retailers expect to enjoy continued sales of the category as long as upcoming releases are chosen with care.

Bob Bell, DVD product manager for the Los Angeles-based Virgin Megastores chain, says the "Carlito's Way" and "American Pie" direct-to-DVD sequels have been big sellers, and calls the genre "a great idea."

"Just because a studio isn't planning to keep making theatrical releases, there's no reason they can't continue to develop new product for the DVD market if they've got a viable franchise," Bell notes.

Bell adds that the key to success is proper marketing and promotion, given the lack of a theatrical campaign.

"They can't just be dumped on the market," Bell says. "There needs to be advertising to make sure the consumer is aware that there's a new movie in the franchise."

Sometimes, that promotion comes in the theater. New Line, for example, just started production in Vancouver for the direct-to-DVD sequel "The Butterfly Effect 2." The DVD is expected in the fourth quarter, and may get theatrical exposure as a prerelease marketing tool.

Studios are also crafting direct-to-DVD marketing campaigns targeting highly specific audiences. Fox's Siegrist notes that for "The Sandlot 2," "we did a lot on ESPN. For 'Dr. Dolittle 3,' we'll do a lot of kid print and family media." ••••