The summer is almost upon and that means a drought for games retailers. With only a handful of big releases to keep us going until late August, sales are expected to dry up.
But many retailers, from supermarkets to online stores and general entertainment stores like HMV, have a bright summer ahead of them thanks to a slew of DVD and Blu-ray releases.
Mission Impossible: Ghost Protocol, War Horse, Sherlock Holmes 2, The Woman In Black, The Muppets and new seasons of Dexter, The Walking Dead and The Only Way Is Essex are all due on shelves in the next few months, guaranteed to pull in revenue.
True, these properties may have lost some of that launch buzz since their debut on the big or little screens, but games retailers should be clearing shelf space as the home entertainment releases trigger a second sales wave.
“Such releases tend to do well from the halo effect of theatrical release marketing and PR, and sell through is now built into a longer term strategy,” explains HMV’s head of games and technology Ewan Pinder.
“With so much content each week, it means that visual products enjoy high profile merchandising. There is also more interest in back catalogue and promotional campaigns.
“Games by contrast are more new release driven, while demand is also driven by console price.”
SILVER SCREEN SALES
The numbers make an even more convincing argument (see ‘The Figures Behind Films’, p46).
While games outpaced video in terms of value last year, it didn’t even come close to matching unit sales. Over 200 million DVDs and Blu-rays were sold in 2011, compared to just over 55 million games, according to data from the Entertainment Retailers Association.
And, unlike games, retailers don’t have to rely on new products to drive sales. 144.7m back catalogue movies and TV series were sold in 2011, netting over £1bn. That’s more than double the 62.5m new titles sold, which drew in £746.2bn.
“There is not really any profit to be made from the new releases but there is a lot of money to be made on the popular old titles, box sets and so on,” says Steve Smith, owner of Somerset-based indie Dailys.
“We do sell the new releases but purely for bringing people in as we make far more from the pre-owned titles traded in. They work in the same way as games: they re-stock themselves through the trade-ins generated.”
It’s a source of revenue that plenty of independents have long since embraced, and even distributors such as Gem and Koch are have brought films into the fold.
Koch Media’s head of sales Jamie Brewer says: “Obviously our key specialists are looking at promoting both games and film in their offers, but we are now beginning to see the grocery sector working closely with the suppliers that can tick both DVD and Games sectors. It is in our interest to works as close as possible on the rest of the 2012 slate and beyond to drive revenues in both areas.”
Of course, growing interest from grocers is nothing new and represents the biggest challenge of stocking DVDs and Blu-rays.
Out of the 7,749 UK outlets that sold videos in 2011 – a number that has been growing year-on-year for the last five years – more than half were supermarkets. In fact, these retailers accounted for 49.3 per cent of total video sales in 2011.
But don’t let that dishearten you. A competitive DVD offer is guaranteed sales no matter what the outlet – High Street or online – such is the broad appeal of film and TV. Again, back catalogue can be the ace up games retailers’ sleeves.
“Cheap DVDs appeal to everyone not just gamers,” says Smith. “Even the elderly come in and browse on a regular basis to see if they can find some older favourites.
“Supermarkets do not stock these titles so it is something you don’t have to compete with on price, as long as your prices are reasonable. There is also no DLC to worry about and they can be resold over and over again.”
THE BIGGER PICTURE
Herein lies the key to success: finding a way to stand out from the multitude of outlets that already have a DVD offering.
Whether this is a trade-in scheme, plenty of back catalogue titles or something a little different, games retailers are already experimenting with new ways to sell films.
MCV Award-winning online specialist ShopTo.net is a prime example, having just recently acquired video-on-demand streaming service Fetch TV.
“Entertainment retailers have always seen great synergies in film and games sales and this has been an area that ShopTo has been keen to move into,” says CEO Igor Cipolletta.
“Being late to the plate on movies and the recent increase in movie streaming, we’re approaching this category with a physical and digital offering.
“Customers who purchase a physical disc will also receive a digital version in their streaming library so they will be able to start watching their film immediately. We hope this offers a desirable unique selling point against our competitors.”
Smith advises that independent retailers play to their strengths when selling films: “If you sell games, you’re more than likely to already operate a trade-in system. This can be implemented into DVDs, Blu-ray, CDs, phones – anything the indie feels confident with. And obviously the only faults with DVDs are exactly the same as games scratched or cracked discs.”
BEST OF BOTH WORLDS
Finally, let’s not forget the most obvious appeal of stocking films and TV: the crossover with video games.
Just as video game tie-ins help drive sales around the summer blockbusters’ theatrical releases, the DVD and Blu-ray editions can help breathe new life into these games when they arrive in Q4.
The audience crossover is also a major factor: fans of action flicks almost certainly have first-person shooters in their collection, for example. And priced competitively, films can be powerful as impulse buys and margin makers.
“The synergy between films and games has never been more relevant and it is a great idea to offer as much of the media spectrum as possible when trying to develop customer loyalty,” says Brewer.
“Games and films are increasingly released as part of high-profile franchises, which obviously creates cross-merchandising opportunities. A lot of film and games content is now produced by the same company – Sony, Warner Bros, and so on – so there are strong overlaps. With games increasingly taking on the dimension of film, the differences between the two formats are narrowing all the time.”