Direct-to-Video Family Films Are Hitting Home

Despite calls from parents and politicians for more all-family entertainment, live-action family films have more often than not laid an egg at the box office. Recent movies such as Warner Bros.’ “A Little Princess” and Sony’s “Fly Away Home” performed disappointingly at theaters despite critical raves and sizable marketing budgets.

On video, though, “Little Princess” revenues dwarfed those of its theatrical release. It has sold about 2 million copies, according to industry estimates.

At an average $16 per copy, that’s $32 million at retail; about 75% of that comes back to the studio. That’s four times its domestic box-office gross of $7.9 million, only half of which makes its way back to the studios. And “Princess,” as with other kids videos, just keeps on selling. There are always more 8-year-olds coming along.

Now Disney, which has had more than its share of such live-action theatrical flops, has launched the first of what promises to be a number of live-action titles going direct to the more hospitable video marketplace. Disney released the second sequel to its 1989 hit “Honey, I Shrunk the Kids” on video last month, bypassing theaters entirely. Disney’s second live-action direct-to-video title, a sequel to 1994’s live-action “Jungle Book,”is due out by late 1997 or 1998.

“Honey We Shrunk Ourselves” was given a multimillion-dollar marketing campaign that downplayed its video domain; its sales of about 1.5 million, according to industry estimates, while not on a blockbuster level, are enough to make other studios take note. Dennis Rice, head of marketing for Disney’s Buena Vista Home Video, emphasizes that Disney is seeking to develop a new and larger market: “We want people to see these movies as top-quality, not as films that weren’t good enough to be shown in theaters.”

At an estimated cost of $7 million, the film should be profitable in short order. It also should continue to be a steady seller and has a life on television ahead of it.

Meanwhile, Disney avoided the expense of striking prints and distributing a movie to an increasingly crowded theater circuit. While theatrical admissions have been near flat for a number of years and the rental video area grew only an estimated 3% last year, sell-through video--dominated by children’s fare--surged an estimated 11% in 1996, according to the Video Software Dealers Assn. Video is now a $16-billion business, divided roughly 50-50 between rental and sell-through revenue.

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Often, the downfall of live-action family films at the box office is their strength on video. Their appeal is to families with young children, who may go to only a couple of movies per year but who will watch many videos multiple times. The teens and young adults who drive blockbuster box-office statistics stay away from family movies.

Direct-to-video releases once were the domain of action and soft-core “genre” films. Many production companies in the 1980s made most of their money on such fare. But the market for these kinds of videos dried up as video retailers made an economic decision to buy multiple copies of blockbuster titles rather than stock marginal releases.

Disney, which consistently dominates the sell-through video category (“The Lion King” is the all-time best-selling video), helped take the low-quality stigma off direct-to-video with its 1994 “Aladdin” sequel, “The Return of Jafar.” Disney has since released another “Aladdin” sequel and now has in the works video sequels to all its recent animated hits, including “Toy Story” and “The Lion King.” Universal has followed suit with video sequels to its animated “Land Before Time” and other properties; Warner Bros. and 20th Century Fox will soon enter this video animation business.

But live-action family films debuting on video are something new for the major studios and often have higher costs because of star salaries and location shoots. Animated direct-to-video projects typically employ animators already in-house.

The path to the live-action family video business has been paved by several smaller competitors to the major studios. Mary Kate and Ashley Olsen, the young twins launched on ABC’s “Full House,” have formed their own production company, Dualstar Entertainment (with products distributed by Warner Bros.’s Warner Vision). Dualstar has sold more than 2 million videos that didn’t go to theaters first.

Scholastic Productions, which has partnered with the majors for such recent theatrical disappointments as “The Indian in the Cupboard” and “The Baby-Sitters Club,” has had enormous success with direct-to-video release of the “Baby-Sitters” franchise.

“We’re certainly exploring our options with the property,” says Deborah Forte, executive vice president of Scholastic Productions. “We’re also looking at several other book properties [that Scholastic publishes] as possible video releases.”

This fall 20th Century Fox plans a direct-to-video release of a Casper movie, combining live action and animation. The Friendly Ghost project landed at Fox via rights holder Harvey Entertainment, which held onto “prequel” rights to the 1995 Casper movie from Universal.

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Bob DeLellis, president of 20th Century Fox Home Entertainment, says, “We’ll consider doing other properties this way [direct-to-video], but only when it makes sense. With Casper, we’ve already got a great franchise with built-in awareness and merchandise behind it.”

Universal is also eyeing the market. Although Universal Home Video President Louis Feola says the studio has nothing definite to announce, Universal is said to be looking at classic TV properties like its “Leave It to Beaver,” which will get a theatrical redo this summer, as possible direct-to-video franchises.

Video could prove to be a more successful venue for classic TV retreads than theatrical release has been: While movies such as Universal’s “Sgt. Bilko” and “Flipper” have tanked at theaters, original TV classics such as “I Love Lucy” and the Three Stooges shorts are consistent, strong sellers on video, and have great appeal to kids.

One possible downside: Although the market for “kidvid” has been more “bulletproof” than the rest of the video business, according to Tom Lesinski, senior vice president of marketing and development for Warner Home Video, there’s bound to be a saturation point.

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Second Shots

Many live-action family films have done substantially better in the video market than they did at the box office.

“A Little Princess” (Warner Bros., 1995)

* Box office gross: $7.9 million

* Less average 50% to theater owners: $4 million

* Retail video sales: $32 million (estimated)

* Revenue to studio: $24 million (estimated)

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“Fly Away Home” (Sony, 1996)

* Box office gross: $24.6 million

* Less average 50% to theater owners: $12.3 million

* Retail video sales (since February): $30.4 million (estimated)

* Revenue to studio: $22.8 million (estimated)

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“Richie Rich” (Warner Bros., 1994)

* Box office gross: $37 million

* Less average 50% to theater owners: $18.5 million

* Retail video sales: $44.2 million (estimated)

* Revenue to studio: $33.1 million (estimated)

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“Dunston Checks In” (20th Century Fox, 1996)

* Box office gross: $9.8 million

* Less average 50% to theater owners: $4.9 million

* Retail video sales: $41.6 million (estimated)

* Revenue to studio: $31.2 million (estimated)

Sources: Box office grosses; Baseline; video sales; industry sources