Pause and effect in DVD boom

Hollywood, meet Eric Duquesne. Or better yet, check out his shrinking shelf space.

On Saturday, the 29-year-old studio musician was at Fry’s Electronics, an airplane hangar-sized superstore in Burbank, considering whether to buy “The Adventures of Indiana Jones” boxed DVD set. Duquesne said he usually preferred to watch movies at home on his high-definition TV. But because he already owns some 500 titles, he said, he has been choosier about recent purchases.

“I don’t have any place to put them all,” he said. “I won’t buy anything that looks just halfway decent anymore.”

Mike Dunn, president of home entertainment for 20th Century Fox, said that kind of “consumer fatigue” was a cause for concern in the industry -- “that the heavy purchaser who buys 40 DVDs a year has run out of library space.”

For years, the DVD has been Hollywood’s miracle worker, boosting profits and sometimes transforming apparent flops into moneymakers. But is the DVD bubble about to burst?

The first shudder went through Hollywood when DreamWorks and Pixar Animation disclosed in recent weeks that they had piles of unsold DVDs for their respective releases, “Shrek 2” and “The Incredibles.”

Then last week, reports that consumer purchases of DVDs were slowing down caused Wall Street analysts to cut their earnings forecasts for stocks offered by the corporations that own the major movie studios. This added insult to industry injuries in a year when box-office tallies slumped for 19 consecutive weeks compared with a year ago and admissions are down about 10% from 2004.

Still, out at Fry’s on Saturday, Duquesne ended up buying that “Indiana Jones” boxed set. He and other shoppers interviewed at random over the weekend seemed to confirm what some home entertainment experts and studio executives are saying: that reports of the DVD’s demise have been greatly exaggerated.

“We have a huge, fully developed market that is absorbing 11,500 new titles a year -- that’s an incredible number,” said Ralph Tribbey, editor and publisher of the DVD Release Report. “They’re looking at the glass as half empty when it’s really half full.”

Even if DVDs are not flying off the shelves in the numbers they did from 1997 to 1998, when the industry experienced 300% growth, DVD buyers clearly remain avid consumers. But with a wider variety of products available, often at discounted prices and at stores not necessarily specializing in home entertainment, DVD buyers have also become sophisticated consumers.

“You can call it a mature market,” Tribbey said. “That means you have 70 million-plus household consumers in place that have buying intent and are out there every single weekend.”

At the Costco in Culver City, Ivannia Luna, 36, a homemaker from Glendale, inspected a DVD set for the television show “Seinfeld.” She said she had not come to the store intending to buy a DVD.

“I probably buy five or six a year,” Luna said. “But maybe when I come to places like this, I’ll buy one for a Saturday night because it’s cheaper than taking my family to a movie” theater.

According to Tribbey, compilations of older TV shows are among the hottest DVD sellers.

“One of the massive gold mines for the studios has been the TV segment,” he said. “Back in the VHS days, you couldn’t give this stuff away. Now you’re talking about a $2.5-billion business.”

Still, another Costco customer, contractor Alex Costas, said he considered buying the “National Treasure” DVD but instead decided to rent sometime. He is a member of Blockbuster’s DVD rental service that includes unlimited rentals for $14.99 a month. Like several others interviewed, Costas said he found the service less expensive and more convenient than buying DVDs, which cost about $17 each on average.

For Corrine Stemper, 26, a film student from Belgium who was shopping at the Virgin Megastore on the Sunset Strip in Hollywood on Saturday, convenience and availability are important buying considerations -- but for precisely the opposite reasons.

“If I can rent this DVD, then I won’t buy it,” she said, standing in the store’s “cult” section, surrounded by movies such as “Ilsa, She Wolf of the SS” and “Myra Breckinridge.” “I am not interested in such mainstream films.”

She said she consulted websites to discover when the titles that interest her -- generally foreign and art house films -- would be available for preorder. And Stemper, who has been living in the Mid-Wilshire area for four years, said she was buying more movies now than in the past.

“There are so many more good titles out there than there used to be,” she said. “The more you find out about them, the more you want to buy.”

Studio executives and industry observers predicted that phasing in new high-definition DVD and Blu-ray technologies next year might cause some cineastes to repurchase all or most of the DVD titles in their libraries.

“The new format will give the market another shot,” Dunn said. Whether his optimism is justified, only the technologically enhanced future can tell.