Home Media Magazine - January 27, 2008 - (Page 10) NEWS BRIEFS I GALLERY SEEKS $1M FOR NEW STORE CLOSURES Bankrupt Movie Gallery Inc. has requested authorization for funds of about $1 million to compensate employees and managers in a new round of store closures. Gallery, which filed for Chapter 11 bankruptcy protection last October, shuttered about 520 locations prior to and following the filing. The motion, filed Jan. 18 with U.S. Bankruptcy Court of Virginia in Richmond, is based on an undisclosed number of additional (Phase II) closures of underperforming stores. – Erik Gruenwedel www.homemediamagazine.com Directors, Producers Reach Tentative Deal The DVD residual rate is unaffected By Erik Gruenwedel he Directors Guild of America (DGA) and the Alliance of Motion Picture and Television Producers (AMPTP) late Thursday reached a tentative collective bargaining agreement for a new three-year contract, effective July 1. The current DGA/AMPTP contract expires June 30. In addition to wage, healthcare and residual upgrades for directors, the new contract outlined T I SHOUT! NABS ‘MYSTERY SCIENCE THEATER 3000’ Shout! Factory has secured worldwide home entertainment and digital download rights to the long-running cult TV series “Mystery Science Theater 3000.” The multiyear deal gives Shout! Factory exclusive physical and electronic distribution rights to all “Mystery Science Theater 3000” branded properties — including a vast library of original episodes that have never before been issued on DVD or been available for digital download. The series lasted 11 seasons and includes 198 episodes, all of which are ultimately bound for both DVD and digital distribution through Shout! Factory. – Thomas K. Arnold increases in new media rights, including jurisdiction (directorial control) and compensation for original and derivative content appearing on the Internet. “We managed to produce an agreement that enshrines the two fundamental principles we regard as absolutely crucial to any employment and compensation agreement in this digital age … jurisdiction [and understanding that] the Internet is not free,” said DGA president Michael Apted. Specifically, the electronic sellthrough (EST) residual rate for television programming will be more than double the current rate (0.3%), to 0.7% per download above 100,000 downloads. The film rate increased to 0.65%, from 0.3%, for downloads in excess of 50,000. For downloads numbering below those unit levels, residuals are based on what producers currently pay for DVD. That figure is 0.3% per TV program and movie download, which is upgraded to 0.36% when worldwide download gross receipts reach $1 million for either type of programming. The exceptions are low-budget original shows on which production costs are less than $15,000 per minute, $300,000 per program, or $500,000 per series — whichever is lowest. The new contract does not change the DVD residual rate, according to a DGA spokesperson. Significant to the agreement is that global grosses will be based on the gross of the distributor — not of the producer — a key provision on which the DGA said it would not compromise. The distributor’s gross is the amount received by the entity responsible for distributing the movie or TV program on the Internet. Receiving a percentage of the See DGA, Page 36 Strong December Catapults 2007 Game Sales By John Gaudiosi GAMES Strong December sales of $4.82 billion — up 28% from December 2006 — helped catapult total 2007 game sales to $17.94 billion. That’s up 43% from 2006, according to The NPD Group. “While hardware sales realized the greatest percentage growth over 2006, due to the closely scrutinized console hardware transition, each category under the video games industry umbrella reached its own personal best in terms of annual sales,” said Anita Frazier, video game analyst with The NPD Group. For 2007 overall hardware sales totaled $7.04 billion, which represented a 54% increase from 2006. In particular, console hardware sales were up 73% to $5.12 billion for the TOP 10 GAMES 20 07 LABEL PLATFORM UNITS SOLD* TOP H A R D WA R E 20 07 PLATFORM UNITS SOLD TITLE I TRANS WORLD SHUTTERS DISTRIBUTION CENTER Trans World Entertainment Corp. is closing a distribution facility in Canton, Ohio, and shifting operations to remaining facilities in Albany, N.Y. (corporate headquarters) and Carson, Calif. The closure, which is part of the retailer’s ongoing corporate streamlining, will be conducted over the next two months, resulting in layoffs of 234 employees. Trans World is also shuttering a fixture facility in Johnstown, N.Y., affecting 18 employees. Trans World earlier this month reported a 12% decline in comparable samestore sales (open at least 12 months) for the nine-week holiday shopping period last year. – Erik Gruenwedel 1 2 3 4 5 6 7 8 9 10 Halo 3 Wii Play Call of Duty 4 Guitar Hero III Super Mario Galaxy Pokémon Diamond Madden NFL ‘08 Guitar Hero 2 Assassin’s Creed Mario Party 8 *In millions Microsoft Nintendo Activision Activision Nintendo Nintendo Electronic Arts Activision Ubisoft Nintendo Xbox 360 Wii Xbox 360 PS2 Wii DS PS2 PS2 Xbox 360 Wii 4.8 4.1 3.0 2.7 2.5 2.5 1.9 1.9 1.8 1.8 1 2 3 4 5 6 Nintendo DS 8.50 million Wii 6.29 million Xbox 360 4.62 million PlayStation 2 3.97 million PlayStation Portable 3.82 million PlayStation 3 2.56 million Source: The NPD Group Source: The NPD Group year. Nintendo sold 6.29 million Wiis in 2007 and could easily have sold more if production problems hadn’t hampered the company throughout the year. Microsoft sold 4.62 million Xbox 360s, and Sony sold 2.56 million PlayStation 3s and 3.97 million PlayStation 2s. The total U.S. installed base for those systems is NEW-TO-DVD RELEASE TRENDS BY CALENDAR QUARTER: 2003 – 2007 Beginning in the third quarter of 2006, and continuing unabated for six consecutive calendar quarters, year-over-year comparisons for new DVD releases have all been down. Up until the July-September period of 2006, every three-month comparison from the previous year was up — in some cases by significant amounts. But since that period, new DVD title output has been down. There are signs that this year-over-year slide might begin to moderate in 2008. — Ralph Tribbey I WATTLES UPS CIRCUIT CITY STAKE Hollywood Video founder Mark Wattles increased his stake in Circuit City Stores Inc. to 11 million shares, or 6.5% of the No. 2 consumer electronics retailer’s outstanding stock. Wattles has dabbled in consumer electronics retail since selling Hollywood Video to Movie Gallery for $1.1 billion in 2005 and disclosed the ownership stake in a Jan. 22 regulatory filing. – Erik Gruenwedel Period Q1 Q2 Q3 Q4 Total 2003 2,232 2,415 3,120 2,595 10,362 2004 2,859 2,985 3,310 3,081 12,235 2005 3,335 3,285 3,759 3,574 13,953 2006 3,545 3,447 3,239 3,432 13,663 2007 3,180 3,273 2,953 2,905 12,311 * New-to-DVD totals exclude adult, audio-only, gray market imports, DVD-R releases and promotional usage. I THIS WEEK’S RELEASE ACTIVITY FOR DVD Titles in Release Through Week Ended Jan. 18, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Net DVD Titles Announced and/or In Release Through June 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . 81,986+357 82,500+438 384 Scheduled 39 I THIS WEEK’S RELEASE ACTIVITY FOR BLU-RAY As of Week Ended Jan. 18 . . . . .Released I THIS WEEK’S RELEASE ACTIVITY FOR HD DVD Scheduled As of Week Ended Jan. 18 . . . . .Released 41.12 million PS2s, 9.15 million Xbox 360s, 7.38 million Wiis and 3.25 million PS3s. “I’ve been asked a lot if PS3 and Xbox 360 hardware sales were likely to benefit from the scarce supply of Wiis at retail,” Frazier said. “Since hardware sales are most influenced by the kinds of games a consumer wants to play, it would appear that the PS2 was a more likely ‘substitute choice’ in that scenario.” On the accessories side, Microsoft has sold 316,000 HD DVD drive peripherals to date. Software sales totalled $8.64 billion, a 34% increase from 2006. The category was driven by console games, which brought in $6.64 billion, 39% more than the previous year. Looking ahead to 2008, Frazier said software sales will grow more proportionately compared to the rest of the business. “While we will continue to see strong hardware sales, particularly if prices come down again, the spotlight now turns from hardware to software,” Frazier said. Home Media Magazine January 27–February 2, 2008 http://www.homemediamagazine.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.