Sony Pictures’ David Bishop: In the thick of home entertainment’s evolution

There’s probably no tougher job at a studio right now than head of a home entertainment division.

Only a few years ago, annual double-digit increases in DVD sales drove studios’ expanding bottom lines. Now, double-digit declines and a switch in consumer habits to cheaper rentals from purchases are triggering layoffs and spending cuts in Hollywood.

At the same time, rapidly shifting business models are transforming the duties of home entertainment presidents. In the past, their responsibilities consisted largely of picking a release date and wrangling for shelf space at Best Buy and Wal-Mart. Today they have to nurture the high-definition Blu-ray format, design a blueprint for the digital market, confront the rising threat of piracy and decide whether to confront or cooperate with subscription service Netflix and $1-per-night kiosk rental company Redbox.

David Bishop, president of Sony Pictures Home Entertainment, is at the center of all these issues. Last year Sony’s DVD and Blu-ray sales fell 7%, bettering the industrywide decline of 13%. His studio was also the first to sign a deal to provide movies to Redbox Automated Retail the same day they go on sale, a contrarian bet against rival studios that have attempted to enforce a sale-only period. On Tuesday, Redbox agreed not to rent movies from Warner Bros. until 28 days after they debut on DVD.

This month Sony Pictures said it would cut 550 positions, most of which would come from its home entertainment and information technology divisions. Bishop has reshuffled several of his key lieutenants in an effort to respond more quickly to market changes.

He spoke to Company Town about the changing state of home entertainment.

Given the drop in DVD sales, is anything selling well these days?

The strong performers seem to be R-rated comedies and any action films that hit the video-game-playing demographic. Certain titles like “The Hangover,” “District 9” and “Inglourious Basterds” have performed close to historical levels.

The less strong come from the horror category and some of the mid-tier box-office titles that viewers are opting to rent rather than buy.

What’s to blame for the problems? The recession or discount renters like Redbox?

A large part of the change has been rooted in the recession. That impacted the spending patterns of consumers. At the same time, you had these lower-price options come into the market and people started to gravitate more toward renting than sell-through.

Sony is taking a different approach to Redbox than some of your rivals. Do you still feel good about that?

Overall we feel good about the economics of the deal. We’ll continue to evaluate that on an ongoing basis, and if things in the marketplace change, then we can adapt and move where the consumer dollars are headed.

Blu-ray was supposed to be the next leap in home entertainment, but consumers haven’t embraced it as quickly as some had hoped. How come?

Once we recovered from the format war [the competing HD-DVD gave up in 2008], sales took off quite nicely and we’re really pleased at the year-over-year growth. It’s unfair to compare Blu-ray to DVD, because Blu-ray is backward-compatible. It was always intended to be an evolutionary format, which it has proven to be. In addition, 3-D further solidifies the format in the marketplace.

Hollywood keeps trumpeting the Internet as the future for piping movies into the home. When will digital downloads and Internet streaming take off?

Digital has shown some nice growth, though admittedly off of a small base. I think we need to spend more time improving the usage model around digital. It needs to become a more flexible product. You should be able to buy a digital download once and play it back on multiple devices.

But will Blu-ray and digital ever become big enough to recover the lost ground in DVDs?

Yes, we see Blu-ray and digital starting to fill the hole from the decline in DVD. We’re confident that over the next couple of years, it will get us back to previous levels and some modest growth.

Overseeing the DVD money machine used to be the hot job in Hollywood, but given the turmoil in the business, you may be thinking you’d rather be Taylor Lautner’s manager.

I do yearn for the days when the finance people were calling me a sandbagger because I kept blowing past our projections. But I feel now with 3-D and digital delivery and Blu-ray that we’re about to get on a growth curve again that will bring great things to come.

ben.fritz@latimes.com