So You Want A Revolution?

Buena Vista Home Entertainment's DVD Strategy

    I was pleased to be invited to a presentation by Buena Vista Home Entertainment (BVHE), designed to highlight their DVD strategy for the next 12 months. BVHE have changed their thinking quite dramatically recently, and are now aggressively pursuing DVD in all its glory, and in particular are aggressively targeting the relatively under-represented family market for DVD. We accordingly gathered on 24th October 2001 at the facilities of Stream AV to hear what Buena Vista had in store for us for the next 12 months.

    Sarah Brennan, BVHE's Director Of Marketing opened proceedings by pointing out that it is expected that 1,000,000 DVD players will have been sold by Christmas this year (2001) in Australia, and that the DVD marketplace is gradually changing. Previously dominated by males, families are now dipping their toes into DVD. She then handed over to Pete Burnham, Product Manager - A/V Group, Pioneer Australia, who presented us with some facts and figures about the growth of DVD hardware in Australia.

The Hardware

    Pete presented a series of statistics from various sources to underline the rapid growth of DVD in the Australian marketplace.

    A rather interesting statistic that was presented was that 20% of Australians claimed to own a DVD player in a phone survey done in August 2001. This seems to be a staggeringly high percentage and perhaps the predicted market penetration figure of 15% by the end of this year later quoted by Pete was more realistic. Not that there's anything wrong with a 15% market penetration - that's still a great figure for a young technology, one that is commonly appreciated to be growing at a much faster rate than VHS or CD ever did.

    A city-by-city split was rather revealing. Sydney, Melbourne and Perth are leading the DVD revolution in Australia whilst Adelaide and Brisbane are lagging behind. It is fascinating that Perth is right up there in DVD market penetration with the big two Eastern cities.

    Pete closed by outlining the current Pioneer/Buena Vista partnership, which sees 5 Buena Vista titles bundled with every Pioneer DVD player sold, as well as a card for 5 free DVD rentals from Blockbuster Video (their "10  flix for nix" promotion).

The Software

    Tim Fullerton, Senior DVD Product Manager from Buena Vista Home Entertainment then gave us an overview of the DVD software market.

    Families so far have been slow to take up DVD in comparison to the single, high disposable income male. This reflects in the fact that family titles account for only 9% of total DVD sales, which contrasts with the 40% market share of this category that VHS titles enjoy. With overall DVD sales now at the same level as VHS sales, Disney sees an opportunity to enter the market in a big way, as families adopt the technology.

    It is interesting to contemplate DVD and VHS best-seller lists. There is quite a contrast!

Top 5 DVD
Top 5 VHS
Gladiator Toy Story 2
The Matrix Stuart Little
Charlie's Angels The Little Mermaid 2
The Patriot The Tigger Movie
Gone In 60 Seconds Chicken Run
Figures for September 2000 - August 2001

    It is clear from the above that action movies dominate the DVD market whereas family movies dominate the VHS market. Indeed, 53% of all sales of action movies now are on DVD, compared with DVD only being responsible for 15% of all family movie sales. A point of side interest was that music titles are split evenly sales-wise between DVD and VHS.

    Tim then handed back over to Sarah Brennan who outlined BVHE's DVD-specific strategy for the next 12 months.

    Sarah made the point that BVHE feels that their family-oriented customers have three major needs;

  1. Titles (12 major titles and 40 back catalogue titles in the next 12 months are promised)
  2. Technical Support (a consumer hotline and website for technical support are planned)
  3. Customer Loyalty Programs (nothing specific announced, although something along the lines of "buy 5 get 1 free" is likely)
    Sarah the went on to mention that bugbear of DVD - disc labelling. Buena Vista are aiming to standardize their disc labelling, making it clear exactly what is on their discs. Their technical specs will be presented uniformly as shown below (the example shown is the technical specifications box for Snow White). You've definitely got to applaud the intent, and the end result does look rather nice, even with the 16:9 whoopsie...

Snow White Technical Specifications

    Sarah also signalled Buena Vista's intent to add lots more bonus materials to their discs, the lack of which Buena Vista have been roundly criticized for in the past. If the quality and quantity of the extras on Snow White And The Seven Dwarfs and The Emperor's New Groove are anything to go by, we'll be like pigs in swill - marvellous stuff. The labelling of extras isn't quite as standardized as the technical specs, but they are considerably more uniform than they used to be. The examples below are from Snow White And The Seven Dwarfs and Starship Troopers.

    Moving on, Sarah was proud to announce that BVHE Australia was the only subsidiary of Buena Vista to be allowed to do local authoring of DVD product, such is the quality of our local authoring facilities. They are using Stream AV to author some of their DVD titles, including the well-reviewed Memento. You can read a little bit more about Stream AV here, or visit their web site here.

    Sarah then brought up a few contentious issues with DVD at present. In regards to parallel importing of Buena Vista product, Sarah made it clear that Buena Vista Home Entertainment support the Region Coding system, but intend to minimize the impact of parallel importing by aiming for near-simultaneous local release of product with Region 1 and near-identical bonus content to Region 1. She then went on to state that BVHE will support rental windows for their live action product, which somewhat contradicts the above. Still, it was clearly emphasized that there is a very strong push for identical content world-wide for their DVDs, a move that must be applauded. As an aside, DTS was mentioned as being in their plans, but with nothing definite to announce just yet.

    Finally, the release schedule for the next year was discussed, and a mighty fine schedule it is, even if I do say so myself. Some of these titles are re-releases of product originally released through Warner Home Video, but most are new titles or remastered versions.

Buena Vista's Release Schedule Highlights for 2001-2002

    That brought formal proceedings to a close, and we then spent some time enjoying a tour of Stream AV's facilities and watching Buena Vista movie trailers.

© Michael Demtschyna (read my bio)
9th November 2001