In another sign that the economic downturn is nibbling away at the edges of the supposedly recession-proof entertainment business, the Navarre Corporation has announced that it is shutting down the BCI Eclipse Company, a wholly-owned subsidiary that specialized in the production and distribution of DVDs based on older cartoons and fringe live action TV and movie properties.  Navarre will shut down BCI’s licensing operations, reduce the BCI workforce, and incorporate the BCI DVD business into Navarre’s distribution operations.  Navarre, which also owns the anime market share leading Funimation Entertainment, has indicated that its financial results for the quarter ending December 31st will include a significant charge relating to the shutting down of BCI.

Navarre CEO Cary Deacon commented: “To deal with the effect of the recession, we are moving quickly to decrease expenses in all areas of our business. BCI's operations have been unprofitable for the past two years.  Although strides have been made this year to improve operating results, it has been mainly due to the strength of BCI's exclusive distribution business. Rapidly changing conditions in the licensed and budget DVD markets during this holiday sales season have prompted us to make more fundamental changes.”  In June Deacon described BCI’s performance as a “major disappointment” (see “Funimation Drives Navarre Sales”).

BCI developed a wide range of “budget DVD” offerings including Ultimate Fighting and TNA Wrestling videos, Spanish language telenovas, Asian martial arts movies, repackaged “B” movie/grindhouse fare (Drive-In Cult Classics), and a bevy of vintage cartoons such as He-Man, Bravestarr, Ghosbusters, Cool McCool, and She-Ra.  With sales of DVDs down sharply in Q4, the sales slowdown is not just apparent in the less-than-anticipated sales of major properties such as Indiana Jones and the Kingdom of the Crystal Skull—evidently the effects of the reduction in sales of DVDs are being felt even more strongly by downmarket purveyors such as BCI.