Tuesday, July 17, 2012

Better than bonus material? What Second Screen could do for title sell-thru

When DVD's first arrived on the scene back in the late '90s, the majority of consumers thought they were a significant leap ahead of VHS tapes because of their size, ability to quickly access anywhere on the disc, better picture quality, etc.  But as the industry realized the opportunity to create a sell-thru model (vs. the rental model with VHS), they started trying to figure out what it would take to get consumers to collect or gift DVD's (the biggest reason for purchases).

And bonus material was born.

I am sure all of you have seen this at a cursory level, but the behind-the-scenes effort of creating a "behind the scenes" is actually a serious undertaking.  In DVD's hey day when the average U.S. consumer was buying 14 DVD titles a year (vs. today's 7), actors and directors grumbled about contracts requiring them to film interviews, do audio commentaries, and edit appropriate bloopers or deleted scenes for the DVD bonus material.  Marketers at the studios were convinced that consumers would pay a higher price point for the "collector's edition" of certain collectible franchises either for themselves or as gifts (esp. @ Christmas) and they had the uplift and margins to prove it.

And then DVD sales began to decline.  At this point, bonus material was either used as a sales promotion feature (removed from discs destined for rentals stores like Blockbuster or Netflix) or the cost of creating the material was seriously questioned and removed (for those uncollectible, less gift-able titles).

And now here we are again, only with Second Screen.  There are studios experimenting with creating incredibly engaging apps for key franchises to promote the sale of the Blu-ray or DVD.  Disney was the first to really push into this with their re-released Bambi title a little less than a year ago, with an incredible user experience that was only activated via BD Live in the sell thru versions.

Since that title, various studios have been experimenting with 2nd screen applications as companions to the movie with games (Sony and the Smurfs) and commerce (Fox and Sons of Anarchy Season 3).  Then last week Marvel (owned by Disney) arrived on the scene with the first 2nd Screen application designed to promote the Blu-ray sale before it is released.  The Avengers Blu-ray won't release for sale until the 25th of September (5 weeks from now), but if you download the app now, you can see some of the character files (Captain America, Black Widow) and play one game, but over time, as you keep coming back (each week presumably), more content is unlocked for you to review.  They are hoping to build up audience anticipation, and similar to Bambi, then only make certain features available when a purchased Blu-ray unlocks something in the app via BD Live.

So where is all of this headed?  In previous blogs, we've discussed the financial reasons for studios to promote digital rental over physical rental (they get a much bigger split) and physical sell-thru over digital rental (similar split, larger overall pie).  Their next big trick is to figure out how to promote digital sell-thru (not because the splits are better than physical, but because physical is in decline with viewing shifting to Netflix-like services where their margin share is abysmal).  The is why there is such a big push on UltraViolet (allows consumers to convert physical libraries to digital libraries, and allows them to truly collect digital libraries across devices.  So be on the look out for the studios working with iTunes, Vudu, Amazon and others to create a digital method of encouraging you to buy the movie title vs. renting the title via transaction or subscription services (they need a method similar to BD live that only enables key features in the 2nd screen app when you are watching a purchased movie vs a rented or streamed version)--I would expect UltraViolet to pick this up in their next feature set release.

What that mean for the consumer?  Similar to the review I did on the Top 100 titles and their availability on various digital services, expect your content creators to continue to push you back towards a purchasing model (aiming to increase the sell thru from 7 to 10 over the next 3 years).

In the meantime, if you like the Avengers, go check out the app.  While it doesn't have much in the way of Simple (control of the 1st screen), Seamless (sourcing of content), or Discovery--it has plenty of Stimulating content and Social implementations.  And, as my son would say, "It's pretty cool!"


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