Direct-to-videos rising straight up

When the Walt Disney Co. released “The Return of Jafar” in 1994, the lowly direct-to-video category was associated with erotic thrillers, cheap comedies and material that had been targeted for theaters but wasn’t good enough.

That movie, based on characters from the studio’s animated hit “Aladdin,” sold 15 million units, taking in nearly $300 million worldwide. Along with Universal’s “The Land Before Time II,” another straight-to-video success that year, it became a social climber, distancing the category from its lackluster past.

Propelled by the advent of the DVD, the straight-to-video market is now a $3-billion-a-year infusion into a maturing business, gaining creative legitimacy and making financial waves. Nearly every major studio has a division devoted to DVD “originals” or “premieres,” as the studios prefer to call this cost-effective revenue stream.

“If they wanted to go theatrical with one of my films, they could,” said president of DisneyToon Studios Sharon Morrill, who has sent out more than 25 made-for-video titles since “Jafar” took off.

With special effects more affordable and recognizable talent signing on, the line separating big-screen movies and original DVD fare is becoming increasingly blurred, agrees Kevin Kasha, senior vice president of acquisitions and programming for New Line Home Entertainment. Studios are not only producing titles, they’re acquiring material at film festivals as well. That can make all the difference for an off-center feature that previously would have been consigned to late-night cable.

“When I started out in the mid-1980s, a direct-to-video movie was an action-adventure-horror piece like ‘Ice-Pick in the Eye, Part 12,” said Kasha, who was hired last year to build the company’s “exclusive to DVD” programming.

A-list producers such as Joel Silver (“The Matrix,” “Lethal Weapon”) and John Davis (“I, Robot,” “The Firm”) have climbed aboard and, although the stigma has not fully evaporated, some stars are following suit. Oscar winner Hilary Swank appears with Patrick Swayze in New Line’s “11:14,” a film on which the actress is also a producer. Phil Collins composed songs for Disney’s “Tarzan 2.” Whoopi Goldberg and Matthew Broderick reprised their roles in “Lion King 1 1/2 .” And Steven Seagal’s Steamroller Productions turns out DVD originals such as “Belly of the Beast” with budgets of $15 million to $20 million.

“When that caliber of talent gets involved, the rest of the industry starts noticing,” said Scott Hettrick, editor in chief of the trade publication DVD Exclusive.

Amid the scramble for perennial “tent-pole” movies such as “Batman” and “Star Wars,” studios are exploring low-budget product and ways of maximizing their properties. And at prices ranging from $2 million to $20 million, made-for-DVD movies are a bargain. They don’t require costly film prints, $300,000 premieres and $50-million marketing budgets.

But like their big-screen counterparts, they have profitable ancillary after-lives. Sci-fi and horror titles are staples on domestic cable channels and international TV.

In May, 20th Century Fox Home Entertainment sent out “Sandlot 2,” the first title from its division dedicated to DVD exclusives, and it became the year’s top-selling live-action title in the straight-to-DVD category, with more than a million units sold. When things kick into gear, the studio hopes to release four or five DVD premieres annually. Upcoming titles include sequels to “Behind Enemy Lines,” “Like Mike” and “Wrong Turn.”

Although shoots are shorter and money tighter, these projects can be talent-friendly, said Tom Siegrist, vice president of production for the company.

“Filmmakers are viewing DVD originals as a place where they have more creative control,” he said. “And they’re finding that when we decide to make a movie, we do. Our development-to-production ratio is higher and faster than in the feature group because of known quantity in our library’s brands.” The studio’s straight-to-DVD promotional budgets, he said, fall into the “seven digits.”

Producer Davis had hoped there would be a third big-screen installment of his “Dr. Doolittle” series. Fox shot down the idea in favor of direct-to-video, however, and he opted to sign on. He’s creating a partnership that would bring 3-D animation, produced offshore, to feature films and send out two direct-to-DVD titles a year. “Dr. Doolittle 3,” which cost about $6 million to make, could take in $12 million to $15 million, Davis said.

Family fare has dominated the direct-to-video market since the early days of VHS. Universal broke the $1-billion mark with its “The Land Before Time” series (the 12th installment is in production) and has been successful with its “Balto” and “Beethoven” franchises. Disney’s “Mulan II” is the No. 1 animated direct-to-DVD of 2005, and “The Lion King II: Simba’s Pride” is the top-selling direct-to-video release of all time, with $464.5 million worldwide in sales and rentals.

The market diversified with the advent of DVDs, whose early adapters were primarily young males. And, with DVD players now in 75 million households, the public appetite is even broader.

Miramax Films’ Dimension division built a lucrative business around direct-to-video “genre” pictures such as “Hellraiser,” “Dracula” and “The Crow.” Rogue Pictures, a recent live-action addition to Focus Features, is putting out its first DVD original release, “American Pie Presents Band Camp” late this year, in addition to theatrical films. And Lions Gate is sending out 11 DVD horror premieres in September alone.

Silver, a producer, has integrated the DVD-original concept into a new business model. Focusing on home entertainment instead of made-for-TV movies or pay-TV, he plans to send out two to four direct-to-video titles annually, budgeted at $5 million to $7 million apiece. The $6-million “Dungeons & Dragons: Wrath of the Dragon God,” based on the movie Silver produced in 2000, is due out Nov. 8.

“This is, by no means, a distraction from Joel’s core business, which is theatrical,” said Steve Richards, chief operating officer of Silver Pictures. “But it is a business opportunity, a way of making additional product for Warners and, sometimes, movies outside the studio system.”

The direct-to-DVD niche may fill a void, industry analysts say, providing a home for material that, at one time, would have been made-for-TV movies, which are no longer in great demand. And the arena might be more hospitable to critically acclaimed films such as “Cinderella Man,” which misfired as a big summer theatrical movie.

“Artists and filmmakers interested in projects of passion might find a more receptive audience and a lucrative business premiering their movies exclusively on DVD,” said Hettrick, of DVD Exclusive. “The potential is certainly there. Home video releases of theatrical films such as ‘Ray’ and ‘Napoleon Dynamite,’ for example, more than doubled their box office take.”

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DVD sales

Here are the 10 top-selling DVDs for the week ending July 24. Rankings are compiled from a variety of major retailers, including Amazon.com, Best Buy, Blockbuster and Circuit City.

1. “Constantine”

2. “Man of the House”

3. “Million Dollar Baby”

4. “Ice Princess”

5. “Hitch”

6. “The Pacifier”

7. “Hostage”

8. “Hide and Seek”

9. “Laguna Beach: First Season”

10. “Chappelle’s Show: Second Season”

Source: DVDExclusive.com