Catalog Videos Propping Up an Ailing Market

By MARLA MATZER

Oct. 16, 1997 12 AM PT

SPECIAL TO THE TIMES

“Grease” and “Top Gun” are among the top 25 best-selling videos for 1997 so far, according to the video sales tracking firm VideoScan. At 19 years old and 11 years old, respectively, the movies are older than many of those in their target audience.

The popularity of these titles highlights a trend toward more promotion of catalog (versus new-release) videos on the part of the studios. And it’s the one bright spot in an otherwise troubling year for the video business.

According to VSDA VidTrac, video rentals were down more than 8% for the first half of 1997, over the same period in 1996. And VideoScan reported that video sales during that time dipped 4%--the first time sales had ever seen a downturn. The third quarter, ending Sept. 30, saw a 2% uptick in sales over the same period last year, but 1997 still lags 1996.

The picture would be even worse if it weren’t for catalog titles. Said Tonya Bates, general manager of VideoScan in Westlake Village: “Only 25 of the top 100 year-to-date releases have been really new releases. The rest were re-releases or catalog releases prior to [the] fourth quarter of last year. I think we’re definitely seeing a shift.”

Jack Kanne, executive vice president of Paramount Home Video, said: “We’re coming off our largest catalog year ever. Last year was our biggest before this.” In addition to top sellers “Grease” and “Top Gun,” Paramount’s 1997 top 50 titles include newer catalog titles “Braveheart” and “The Firm.”

Catalog titles are doing well in part because there are fewer new hits to compete with--which is why the overall market is down. Though older titles generally sell at a 40% or more discount to new titles, a healthy catalog business keeps consumers in the habit of buying videos.

For the studios, the income from old titles is often pure profit. The value of old films is frequently written down to zero through creative accounting, meaning any additional profit is found money.

Children’s video titles still dominate the charts, with Disney titles such as “Bambi” and “Sleeping Beauty” claiming half of the top 10 best-seller spots on VideoScan’s 1997 charts. Children’s videos have been a staple since video sales became a mass-market business seven or eight years ago. What’s new today is the added focus on a broader range of catalog titles.

Video retailers lament the dearth of new blockbuster titles coming to video this year, so catalog product has helped bolster sales.

“Our sell-through catalog business has been tremendous this year. We’re up 10% to 15%,” said John Thrasher, vice president of video purchasing and distribution for the Sacramento-based Tower chain.

Retailers would like the studios to spread out their big, new video titles throughout the year. Now, summer hits such as “Men in Black” and “The Lost World” are crammed into the fourth quarter to capitalize on holiday sales. But during the rest of the year, Thrasher says increased catalog video sales benefit Tower over mass merchants, which now sell about half the videos in the U.S. “Historically, we’ve been a catalog destination place. Mass merchants rely more on hits,” explains Thrasher.

Because advertising budgets for older titles are usually a fraction of what they are for new releases, studios seek to find a publicity hook to maximize visibility. Got an anniversary of a popular movie coming up? Reissue the video priced to sell, along with a publicity blitz emphasizing the classic nature of the film.

Paramount re-released the “Godfather” films in May, tied to the original film’s 25th anniversary. Even 10 years is enough time to wax nostalgic: “Dirty Dancing” got a limited theatrical re-release and promotional blitz in August and is being re-released on video later this month.

Live Entertainment hopes there are enough nostalgic “Dirty Dancing” fans and new, young viewers to pony up for a digitally remastered version of the 1987 movie. The suggested retail price of $19.98 is $5 higher than the cost of the original video version that has been on the market--a somewhat unusual example of a title being re-promoted at a higher price rather than at a lower re-price.

This summer, MGM Home Entertainment released several Elvis Presley videos, including “Viva Las Vegas,” timed to the 20th anniversary of Presley’s, uh, “disappearance,” said MGM Senior Vice President Blake Thomas. MGM worked with Elvis Presley Enterprises, the licensing representative for Presley’s estate, to create themed displays in retailers such as Blockbuster. Videos were sold alongside Elvis magnets and “Blue Hawaii” T-shirts.

Star power is another popular hook for catalog promotions or re-releases. When Tom Cruise’s “Mission: Impossible” came to video in November 1996, Paramount seized the opportunity to re-promote other Cruise movies, including “The Firm” and “Days of Thunder.” At a suggested retail price of $5.99, “Top Gun” has been the biggest seller. It becomes an impulse purchase--and as cheap--or cheaper--than a movie ticket.

What’s next? Expect even more “branding” of video lines in categories like “family,” “classics” and “action.” “We didn’t invent that; Procter & Gamble invented that,” acknowledged MGM’s Thomas. Such categories encourage multiple title buys by consumers and give the studios and retailers a promotional hook.

And expect more anniversary-themed promotions--many with at least limited theatrical re-release a la “Star Wars.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

The Library Card

With fewer new blockbusters coming to video so far this year, the studios have seen increased sales from “catalog” titles. More than a third of the top 25 titles to date were released before 1997. In addition, two of the “new” titles below----”Star Wars Trilogy Special Edition” and “Fun & Fancy Free”--are reworked versions of older product.

VideoScan’s top 25 titles in 1997, through Sept. 28

1. Bambi (Disney)

2. Space Jam (Warner)*

3. 101 Dalmatians (Disney)*

4. Hunchback of Notre Dame (Disney)*

5. Jerry Maguire (Columbia)*

6. Sleeping Beauty (Disney)

7. Matilda (Columbia)

8. Fly Away Home (Columbia)*

9. Pooh’s Grand Adventure (Disney)*

10. Grease (Paramount)

11. Star Wars Trilogy Special Edition (Fox)*