Home Media Magazine - January 27, 2008 - (Page 3) JANUARY 27–FEBRUARY 2, 2008 >> ELECTRO N IC DELIVERY Discs With Digital Copies Span the Digital Divide By Chris Tribbey he battle between digital delivery and packaged media seems to have found a compromise: marriage. Studios increasingly are putting digital copies of titles on the discs. Warner Home Video and 20th Century Fox Home Entertainment T have been the first to experiment with including digital copies of films with their discs, whether on the discs themselves or by including a code for a download. Warner first toyed with the idea of including digital options with the Superman Returns DVD, in a Wal-Mart download exclusive in November 2006. Warner also tried out an “E-Copy” option for some of its movies, including See DIGITAL, Page 38 INSIDE >> Sony Goes MOD The studio teams with HP. >> Amazon Has Indies Amazon opens a new Web store. PAGE 14 BRINGING DIGITAL ENTERTAINMENT TO YOU Looking to the HD Future As it did in 1997, the home entertainment packaged-media business is hoping to navigate the transition to a new format By Thomas K. Arnold tudio executives are looking at 2008 with guarded optimism. The high-definition disc format war may be nearing its end, given Warner Home Video’s defection from HD NEWS DVD. That means ANALYSIS they can focus not on fighting each other, but instead on battling consumer indifference toward next-generation media, the success of which all agree is critical to the continued well-being of the home entertainment business. “Our strategy has shifted from proving Blu-ray is the better of the two formats to sending a message to consumers that they need to convert from DVD to the next-generation Netflix Ups Profit, Rev, Subs in Q4 Company to stream movies on Macs this year By Erik Gruenwedel RETAIL Netflix Inc. reported positive results across all metrics for the fourth quarter (ended Dec. 31). Netflix CEO Reed Hastings said in a call with investors that the service was pulling away from rival Blockbuster Inc. while at the same time intimating the existence of a truce that would result in a significant decline in future ad spending. “We are widening the gap between us [and Blockbuster] and further attacks are less likely to be as painful as their 2005 or 2007 thrusts,” Hastings said. “While they appear to have shifted to valuing profit over See NETFLIX, Page 38 S I 2007 STUDIO MARKET SHARE I Other 6.5% I Genius 2.5% I Lionsgate 5.4% I Universal 10.8% I Disney 13.1% I Warner 19.6% Source: Home Media Research I Fox 15.3% I Sony 13.5% I Paramount 13.3% format,” said David Bishop, worldwide president of Sony Pictures Home Entertainment. He and his fellow studio leaders agree this message is critical. DVD is clearly on the decline, and the home entertainment business needs something to reinvigorate it. Last year, many say, was 1997 all over again. A mature format (DVD) had lost its sparkle. At the same time, two emerging formats were locked in a bitter battle for succession rights, and neither one was doing anywhere near as much business as anyone had hoped. Ten years ago, the VHS-driven rental business had peaked and was beginning to decline, while DVD and Divx, a pay-per-play variant on the much-ballyhooed disc format that had launched in March 1997, were too busy battling each other to aggressively court consumers. In 2007, it was the DVD sellthrough business that was trending down, and Blu-ray Disc and HD DVD were locked in a bitter format war that was threatening to derail the promise of high-definition media. As the new year dawned, then and See 2007, Page 40 >> HIGH-DEF TOSHIBA TO AIR HD DVD AD DURING THE SUPER BOWL INSIDE >> HD Field Still Fledgling Game consoles dominate. >> Blu Japan BD has 90% of HD player sales. PAGE 12 By Erik Gruenwedel H IG H-DE F MAR KET S HAR E Blu-ray and HD DVD Sales Comparison as of 1/20/08 Week Ended 1/20 Year-to-Date I Blu-ray I HD DVD SALES OF HD DVD PLAYERS PLUNGE ON WARNER MOVE By Thomas K. Arnold Since Inception H D DVD may be looking to gain some yards. Toshiba Corp. will feature HD DVD in a Super Bowl XLII ad during the Feb. 3 telecast from Glendale, Ariz. Jodi Sally, VP of marketing for the Toshiba Digital A/V Group, confirmed the company will run a 30-second ad as part of a marketing strategy to reinvigorate HD DVD. See SUPER BOWL, Page 40 17% 83% 76% 24% 64% 36% W Source: Nielsen VideoScan: First Alert data arner Home Video’s defection from the HD DVD camp may have put a damper on hardware sales. In the week after the studio’s surprise early-January announcement that after May it will support only the Blu-ray Disc format, sales of HD DVD players ground to a virtual halt, giving Blu-ray hardware a whopping 93% sales advantage, according See HD DVD, Page 40 NEWS The Directors Guild of America and Alliance of Motion Picture and Television Producers reached a tentative contract agreement. PRODUCT Lisa Davis, the voice of Cruella De Vil, and others discuss Disney’s 101 Dalmations in anticipation of the film’s platinum edition DVD. RESEARCH The Farce was with Fox as Family Guy Presents: Blue Harvest took the top spot on the DVD sales chart. Page 10 Page 18 Page 32
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