April 16, 2020
The growth in the home entertainment and games businesses have been “one of the few bright spots” in the COVID-19 pandemic, said Jim Wuthrich, president of Warner Bros. Home Entertainment and Games.
Wuthrich, speaking at the virtually presented DEG Expo April 16, presented numbers “live from my son’s bedroom” to introduce the expo.
“I feel very fortunate to have a job that allows me to work from home, and one that brings a little bit of joy to people sheltering at home during this crisis,” he said.
He presented numbers from Warner research showing the growth in home entertainment spending after stay-at-home orders took effect.
“Pre leading up to that period, home entertainment spending overall from a transactional standpoint was down about 5% in total consumer spend,” he said. “Since March 14, that mid-March time frame, home entertainment transactional spending is now up 38%.”
The growth took off in triple-digit percentages as the pandemic measures took effect.
“Our digital sellthrough business as an industry — which we call EST here at Warner Bros. — it’s been up over 100% each week since safer at home began.”
Physical, too, has seen a lift, Wuthrich said.
“Physical has continued to be challenged, but it’s interesting that now even in this environment, with stores that are closing and such, physical has shown great resiliency,” he said. “Since post safer at home, the physical business has been trending stronger than what it was doing prior to that.
“We just had a title launch this week, Just Mercy, in physical and we actually did better than what we had been planning. I had to ask the team did we correct it for a post-COVID world and we hadn’t. The fact that people are still in stores shopping for the essentials at Walmart, Target and Best Buy has been helpful in holding up the physical. And of course Amazon and the online retailers have all done well in that space.”
Wuthrich noted that the pandemic has had effect on what titles consumers are watching.
“The top catalog title for the industry year to date is a title that many of you may have watched yourself. It became a bit of a cultural swelling, and that movie is Contagion,” he said. “The movie’s been out for a number of years, but obviously a lot of interest in it. It’s uncanny how it kind of mimics what’s going on in the real world today. That is actually outselling our ‘Harry Potter’ collection, Jumanji, Avengers: Endgame, World War Z. So basically people are binging on franchise and apocalypse movies.”
Wuthrich stressed how important theaters are to the overall business.
“It’s really unfortunate that theaters had to close because of the crisis, and we are looking forward to when we can get the theaters back in business. I just want to comment on that,” he said. “This is all an ecosystem, and it’s a very important ecosystem, having theaters open, driving people into theaters, eventizing films and providing the traditional windows that come from that. So that fact that the theaters are closed is a big hit to our business. We’re looking forward to getting back into business with our exhibition partners.”
Still, home entertainment and games have helped stem the losses in theatrical revenue, he noted.
“Games and home entertainment, increases in those businesses have nearly offset the loss of what we’ve seen in the industry from moviegoing,” Wuthrich said. “So there’s a lot of growth happening in entertainment and games.”