Home Media Magazine - January 6-12, 2008 - (Page 6) NEWS BRIEFS I CITIGROUP RAISES AMAZON.COM’S STOCK Amazon.com got a boost from Citigroup Jan. 2 when the financial services company raised its rating of the online retailer from buy to hold and raised the target price of the stock from $95 to $119. Amazon.com, one of the leading retailers for home media product, announced Dec. 26 that it had its most successful holiday season ever, and had sold enough high-def players to cover seven football fields. – Chris Tribbey www.homemediamagazine.com NEWS ANALYSIS A Burning Question Manufacturing-on-demand could be the answer to growing the DVD business By Marie Bloomfield ould manufacturing-on-demand (MOD) be the solution to a shelf-space crunch? The DVD business is approaching saturation in key markets, resulting in intense pressure on both brickand-mortar and online retailers. This situation has been exacerbated by the arrival of two high-definition formats. The combination of vanilla discs, premium discs and special-edition boxed sets across up to three different formats (DVD, Blu-ray Disc and HD DVD) means that a release can come in as many as 10 different SKUs. For retailers, reconciling the expanding DVD catalog with limited shelf space is becoming increasingly urgent. Meanwhile, rights holders have a growing concern that many titles are simply not strong enough to secure shelf space. Proponents of MOD argue that this technology has the potential to address these problems. SPENDING ON DVDS HAS PLATEAUED IN THE KEY GLOBAL MARKETS SINCE 2004 1.8 1.6 1.4 Volume (bn) I Upcoming Event MOD is one of a range of topics that will be addressed at PEVE Digital Entertainment 2008, the leading conference for the international home entertainment business, which takes place in Paris, April 17-18, 2008. For further information visit www. peve.screendigest.com. 30 25 Volume ($bn) 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2003 2004 2005 2006 2007 20 15 10 5 0 Source: Screen Digest Video Intelligence I Volume I Value The Great Debaters I OSCAR SCREENERS HIT WEB Several DVD screeners of movies still in theaters have made their way to BitTorrent download sites, according to news reports, which speculated the DVDs could only have come from Oscar voters. I Am Legend, Atonement, The Great Debaters and The Bucket List were among those listed by media download site TorrentFreak. The Hollywood Reporter relayed in September that the Cinea S-View player, the custom-made player for Oscar voters that would play DRM-encrypted screeners, was being phased out, leaving watermarking as the main way of protecting DVD screeners. Watermarking allows studios to track the source of a DVD copy that’s been uploaded to the Internet. – Chris Tribbey MOD could benefit rights holders From a retailer perspective, the deployment of on-demand fulfilment services could alleviate the pressure on inventory by enabling them to stock some titles virtually rather than physically. Both brick-andmortar retailers and online retailers are in a position to incorporate MOD, with service providers having developed solutions tailored to both types of businesses. MOD solutions can be installed in-store — either as a standalone kiosk or combining a consumer interface on the shop floor with fulfilment behind-thecounter — or in a warehouse for the fulfilment of orders made online. Such services might also make it possible for rights holders to exploit long-tail content — niche titles that individually might generate only a fraction of the revenue of a new studio release, but that collectively could become a significant revenue stream. MOD also could allow rights holders to release content that has not previously been made available on DVD. Screen Digest research indicates that a wealth of content has not been released because it is not considered commercially viable for traditional DVD distribution. Warner Bros. for instance, has 6,600 movies in its library, but only about 1,500 have been released on DVD. In addition, the studio boasts around 50,000 TV episodes, of which about one in 10 have ever been published on DVD. While many unreleased catalog titles may not have stood up to the test of time, others continue to languish in the vaults because their potential audience, although identifiable, is not considered large enough to justify the investment that a traditional DVD launch entails. MOD can offer an avenue for this kind of content because, unlike the traditional video supply chain, it does not require the rights holder to make any commitment to replicating in large volumes. Instead, product is manufactured on a unitby-unit basis. MOD also opens up the possibility for rights holders to experiment with new business models for non-movie content. There are many ways in which this could be exploited, such as making episodic and short-form content such as TV and music videos available individually, so that consumers can pick and mix segments. Some rights holders have expressed concerns that such a proposition could undermine the lucrative market for TV DVD boxed sets, but Screen Digest believes that cannibalization would be minimal, given that most consumers would probably not elect to purchase a handful of episodes on a MOD basis instead of a season boxed set. Indeed, it is arguably just as likely to stimulate sales of boxed sets, as consumers who purchase a few episodes of a series through a MOD service may See BURNING, Page 34 STUDIO OUTPUT SHARES FOR BLU-RAY AND HD DVD 2006 AND 2007 COMBINED After the first two years of the high-def war, the release patterns continue to point to it being a studio game, with only a small percentage of independent sources sampling the HD DVD and Blu-ray Disc waters. In the DVD release world, the Hollywood studios account for roughly one out of every five releases. In the high-def arena, as 2007 closed and 2008 dawned, the studios had released 85.1% of all the Blu-ray titles and 80.6% of the HD DVD product offerings. Following Paramount’s move into the HD DVD-only camp, the net output totals show Blu-ray with 388 titles and HD DVD with 376. Studio releases account for 330 of the Bluray total and 303 of the HD DVD total. — Ralph Tribbey SONY NAMES COOKSON NEW TECH PRESIDENT By Billy Gil I DROP COULD MEAN LESS SHELF SPACE FOR DVD Using Nielsen VideoScan research, which shows DVD sales were down 4.1% during the year and down 2.1% over the fourth quarter compared to 2006, Bernstein Research analyst Michael Nathanson told Bloomberg news service that the decrease in sales could lead to retailers devoting less space to DVD. He also noted that despite the studios’ collective push for a winner in the battle between Blu-ray Disc and HD DVD, consumers will not be quick to replace their entire DVD libraries with high-def. – Chris Tribbey Format Blu-ray Percentage HD DVD Percentage Studios 330 85.1% 303 80.6% All Others 58 14.9% 73 19.4% Combined 388 * Net of discontinued titles I THIS WEEK’S RELEASE ACTIVITY FOR DVD Titles in Release Through Week Ended Dec. 20, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Net DVD Titles Announced and/or In Release Through Dec. 20, 2007 . . . . . . . . . . . . . . . . . . . . . . . 80,779+442 81,211+413 hristopher J. Cookson has been appointed to the newly created role of president of Sony Pictures Technologies. Cookson will oversee the studio’s development and implementation technology policy and processes, and will act as chief liaison to Cookson technology-based Sony Corp. businesses. He will report to Michael Lynton, CEO and chairman of Sony Pictures Entertainment, and Amy Pascal, co-chairman. Sony Pictures’ chief technology officer, Mitch Singer, and his team will report to Cookson. Cookson previously served as chief technology officer of Warner Bros. Entertainment and president of the Warner Bros. Technical Operations Division. Home Media Magazine January 6–12, 2008 http://www.homemediamagazine.com http://Amazon.com http://www.peve.screendigest.com http://www.peve.screendigest.com
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