Direct-to-DVD: H'wood's New Boom Biz

The Wall Street Journal's Merissa Marr has a terrific article today about Hollywood's rapidly growing direct-to-DVD market. This is a subset of studios' homevid business that's fascinated me for the past few years. As Marr's piece (titled "Studios Have New Respect for Direct-to-DVD Films ) points out, the once ghettoized DTV category has become a sneaky success story for Hollywood. Back when I was West Coast Bureau Chief for Premiere Magazine, I assigned a piece on the subject to the LA Times "Scriptland" columnist Jay Fernandez. Here's the nutgraph from his article titled "The 'Direct' Effect" which ran in Premiere's March 2007 issue:

In the 30 years since the advent of the VCR, the home video industry has ballooned into a $24 billion-a-year business, which is astonishing, especially when compared to the mere $9 billion that theatrical releases earned in 2006. And while DVD sales as a whole have recently plateaued--"the category has started to mature," in the words of one home entertainment executive--the revenues generated from direct-to-video...a subset of that market, have grown to more than $3 billion annually. So a major movement is now afoot in Hollywood not only to capitalize on the burgeoning DTV market, but to also make it more respectable. With Warner Bros. joining the cause this past August with its launch of Warner Premiere, every major studio has created a distinct internal division to produce and finance these pictures for an audience perfectly content to watch first-run movies at home and avoid the expense and hassle of the multiplex altogether.

Marr's piece carries the ball a bit further down the field by discussing Warner Premiere's DTV spinoff for their 2008 theatrical release Get Smart, which stars comedian Steve Carell as Maxwell Smart and Ann Hathaway as Agent 99. According to Marr, when actor Masi Oka (from the TV show Heroes) landed a role as a tech geek named Bruce in Smart, the studio immediately asked Oka if he was interested in playing the character in a separate movie.

This is not the standard Hollywood spinoff, though. In an effort to make as big a splash as possible in the summer of 2008, the Burbank, Calif., studio plans to release the offshoot comedy, "Get Smarter: Bruce & Lloyd Out of Control," on DVD just 10 days after its main attraction, "Get Smart," hits theaters.

While studios have long loved using pre-branded franchises for DTV fodder (TheAmerican Pie series has been an especially rich vein for Universal), the part of Marr's story that caught my interest was the concept of "parallel content" for upcoming theatrical releases and the fact that WB would be releasing Smarter around the same time that Smart hits theaters, which appears to be a new paradigm for DTV distribution and a way to couple ads costs so that one movie will effectively promote the other (i.e. Smart's ad campaign will promote intersted in the Smarter sequel). Per the WSJ:

One of the more experimental parts of Warner Premiere's strategy is what Ms. Nelson calls "parallel content." That involves tapping filmmakers working on movies for the main Warner label to scout out opportunities for companion stories. Unlike other studios, Ms. Nelson reports to both the head of production, Jeff Robinov, and the head of home entertainment, Kevin Tsujihara.

That was how "Get Smarter" came about. Running down a list of Warner's coming feature films, Ms. Nelson decided to approach the filmmakers for "Get Smart," which hadn't yet gone into production. The writers came up with an idea for a companion piece, focusing on two secondary characters from the main movie: Bruce and his geeky sidekick Lloyd (played by the actor Nate Torrence).

"Our initial concern was that we wanted to make sure we wouldn't be sending a confusing message to audiences," says Charles Roven, the producer whose previous projects include Warner's "Batman Begins."

They agreed that advertising for "Get Smarter" wouldn't start until after the main movie had opened. Their hope is that the buzz around the spinoff might even keep "Get Smart" in theaters longer. Mr. Roven says: this lets consumers have something else original quickly after enjoying the film."

That's a concept Hollywood mavericks Todd Wagner and Mark Cuban have long lobbied for. They have been releasing movies in theaters and DVD simultaneously but have been boycotted by theater chains that want to maintain the gap between theatrical and DVD release. "There's no reason exhibitors will have a problem with 'Get Smarter,'" Ms. Nelson says. "It's a distinct, stand-alone story."