HBO Accelerates DVD Releases

Jan 31, 2005  •  Post A Comment

HBO has changed its DVD release strategy to cross-promote each season premiere with the release of its most recent season on home video.

For years the pay-cable service was engaged in a cautious game of wait-and-see with its video sales, releasing the first season of a series to roughly coincide with the third season’s premiere.

“At first we didn’t know the impact of release on HBO subscribers,” said Cynthia Rhea, senior VP of marketing for HBO Home Video. “One method was to delay by two years any season on DVD.”

Then last June HBO released the second season of “Six Feet Under” to coincide with the premiere of the third season. The network discovered that airing the new episodes increased DVD sales, while a customer mail-in survey accompanying the DVD packaging revealed that about 60 percent of buyers were not HBO subscribers.

“We definitely saw strong initial sales and those sales sustained for more weeks than usual,” Ms. Rhea said. “And the sales of season one on DVD picked up too.”

So now the network has plunged ahead to pursue a more rapid DVD release schedule.

For newer series, such as “Deadwood” and “Entourage,” that means season one will come out on DVD one month before season two debuts on HBO. “Deadwood” is in stores next month and will include a sticker and a trailer reminding buyers about the new season, which premieres in March.

For an older series, such as “Curb Your Enthusiasm,” it means releasing two products a year. Season three is in stores this month to make way for the release of season four this fall-just before season five’s premiere, thus “catching up” the DVD releases to the on-air premieres.

HBO has about 28 million subscribers, a number that’s remained roughly steady in recent years. A network spokesperson said the return of a signature series such as “Sex and the City,” let alone a mere DVD release, does not have a noticeable impact on subscriber figures.

What a DVD release can do, however, is serve as an effective cross-promotional vehicle. Television and print ads promoting the DVD prepare viewers for the upcoming show, and the DVDs give newcomers a chance to catch up on current story lines. And the new episodes on HBO drive DVD sales of the newly available season.

“If there’s any kind of a barrier to getting into a show, this is a way to overcome it,” Ms. Rhea said.

There is one exception to this new strategy, and it’s “The Sopranos.” Though the final season doesn’t begin until 2006, HBO has decided to release season five in June. Ms. Rhea said the length of time fans must wait for the new season was a factor.

“For the fifth season, it just makes sense to us not to wait,” she said. “Our thinking is that Father’s Day has been a very strong promotional period for us.”

The premium network typically releases major series and a handful of movies and specials on DVD each year. For 2005, however, HBO plans to double its number of DVD releases.

Though precise revenue numbers for the network’s DVD sales are not available, about 20 percent of HBO’s nonsubscriber revenue includes DVD sales, overseas syndication and joint venture international pay channels.

According to a Wall Street Journal article last year, that 20 percent figure is up from 5 percent in 1999, growth mainly attributable to DVD sales. “The Sopranos” DVDs alone have generated $150 million in reported sales.