BOX OFFICE SLUMP ON EVERYONE'S MIND.

Byline: Greg Hernandez Staff Writer

CENTURY CITY - The state of DVD was the stated topic as industry leaders gathered this week for the fourth annual Home Entertainment Summit at the Century Plaza Hotel, but Hollywood's box office losing streak seemed to be what was on everybody's mind.

``We obviously are concerned onlookers at this point,'' said Bob Chapek, president of Disney's Buena Vista Home Entertainment. ``I think our own business will experience a slight softening of growth.''

But Chapek, a respected industry leader who also serves as president of the Digital Entertainment Group, said it is unfair to blame the DVD industry for the slump since the average window between the date of a film's theatrical release and its home video debut remains at about five months.

``I think there's value in (release) windows,'' Chapek said. ``I don't see a need to shrink the windows.''

The popularity of DVDs and the increasing number of sophisticated home theater systems is one of the myriad possible explanations for the current box office slump. But Don Rosenberg, publisher of conference organizer Home Media Retailing magazine, was succinct in his assessment: ``It's been a bad run of movies, not really compelling stuff.''

Last weekend, the movie industry suffered through a record 18th week of ticket sales that lagged behind the same weekend a year earlier, which has added up to an attendance deficit that is close to 10 percent.

So far the summer has produced only one bona fide blockbuster, ``Star Wars: Episode III - Revenge of the Sith,'' which has grossed nearly $360 million domestically. ``Batman Begins'' has dominated the box office for the last two weeks and the highly anticipated ``War of the Worlds'' starring Tom Cruise is expected to open big today.

Other than ``Sith'' and ``Batman,'' the only other summer films to even cross the $100 million mark have been ``Madagascar,'' ``The Longest Yard,'' and ``Mr. & Mrs. Smith,'' which all continue to perform strongly.

But the box office disappointments far outweigh the hits with such major flops as ``Kingdom of Heaven'' and ``XXX: State of the Union,'' under- performers including the Russell Crowe boxing drama ``Cinderella Man'' and the family film ``The Adventures of Shark Boy and Lava Girl in 3D,'' and such dead-on-arrival entries as ``The Honeymooners,'' ``Mindhunters'' and ``The Perfect Man.''

For the DVD industry, the lack of major hits means fewer slam dunks by the time these films come to DVD. In contrast, such 2004 summer blockbusters as ``Spider-Man 2,'' ``Shrek 2,'' ``The Day After Tomorrow'' and ``Harry Potter and the Prisoner of Azkaban'' were all major sellers on DVD.

But some see a possible bright side.

``It could be an opportunity to capture the audience that didn't show up at theaters,'' said Michael Arkin, senior vice president of marketing for Paramount Home Entertainment. Judith McCourt, Home Media Retailing's market research director, agreed.

``Clearly a lot of people have missed what has been going on in theaters,'' McCourt said. ``With the right marketing message, that's a great opportunity for DVD. But the flip side is, if the product is weak, maybe the consumer isn't going to watch it.''