Home Media Magazine - February 17-23, 2008 - (Page 28)

NEWS ‘Book Club’ Signing Continued from page 1 www.homemediamagazine.com HD DVD Format Is Running Out of Time the air. “Given the market developments in the past month,” she said, “Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players.” Immediately after the Warner announcement, the HD DVD North American Promotional Group canceled its Consumer Electronics Show presentation. The following week, data collected by The NPD Group gave Blu-ray 93% of all hardware sales for that week. Toshiba subsequently fired back by drastically cutting its HD DVD player prices by as much as half, effective Jan. 15. But a hoped-for consumer sales surge never materialized; retail point-of-sale data collected by The NPD Group for the week ended Jan. 26 still showed Blu-ray Disc players ahead by a wide margin, 65% to 28%, with the rest combo players. Software sales have declined as well. The latest Nielsen VideoScan First Alert sales data show the top-selling Blu-ray Disc title for the week, Sony Pictures Home Entertainment’s Across the Universe, sold more than three times as many copies the week ended Feb. 10 as the top HD DVD seller, Universal Studios Home Entertainment’s Elizabeth: The Golden Age. Blu-ray Disc titles also accounted for 81% of all high-def disc sales for the week, with HD DVD at just 19%. Toshiba had been pitching its discounted HD DVD players toward the standard DVD crowd as well as high-def enthusiasts, noting in its ad message that the new players would make DVDs look a lot better as well. And as a last-ditch effort the company ran an ad during the Super Bowl — a 30-second spot that reportedly cost $2.7 million. But in the end, sources say, the substantial loss Toshiba is incurring with each HD DVD player sold — a figure sources say could be as high as several hundred dollars — coupled with a series of high-profile retail defections have driven the company to at last concede defeat. “An announcement is coming soon,” said one source close to the HD DVD camp. “It would be a matter of weeks.” Microsoft is the other big player in the HD DVD equation; when Paramount Home Entertainment last fall announced it was dropping its dual-format strategy and would release titles in HD DVD only, giving that side a brief resurgence, a pitch to journalists for interviews came from a Microsoft e-mail address. Several phone calls to Kevin Collins, Microsoft’s normally accessible “HD DVD evangelist,” were not returned. Nor were calls to Ken Graffeo, the Universal Studios Home Entertainment executive who doubles as co-president of the HD DVD North American Promotional Group. When Warner abandoned HD DVD in January, the format was left with just two of the six major studios backing it: Universal Studios Home Entertainment and Paramount Home Entertainment. Meanwhile, Blu-ray support among independents is rising. This week, two key retailers, Best Buy and Netflix Inc., both got off the fence and threw their support behind Blu-ray exclusively, citing widespread studio support and consumer preference. Both companies said Warner’s decision was a turning point in their strategies. Cast members and the director of Sony Pictures Home Entertainment’s The Jane Austen Book Club DVD stopped by The Grove in Los Angeles for a DVD signing Feb. 5. (L-R): SPHE director of marketing Gloria Witham, director Robin Swicord, actresses Kathy Baker, Maggie Grace and Amy Brenneman, and Sony Pictures manager of marketing Allene Kim. Best Buy: Public Wants Leader Continued from page 1 Until now, Best Buy, Netflix and other retailers have steadfastly remained neutral in the format war publicly while lamenting its affect on sales. Best Buy is reportedly the largest seller of HD packaged media. “Consumers have told us that they want us to help lead the way,” said Brian Dunn, president and COO of Best Buy. “We’ve listened to our customers, and we are responding. Best Buy will recommend Blu-ray as the preferred format.” He said Best Buy will continue carrying HD DVD players and software. The HD DVD North American Promotional Group issued a statement lamenting Netflix and Best Buy’s decisions, but reiterated that with more than 1 million HD DVD players on the market, the format continued to represent the best consumer value. “At least [Best Buy] will continue to carry HD DVD and offer consumers a choice at retail,” the group said. The move by a majority of major movie studios to publish high-def DVD titles only in the Blu-ray format prompted Netflix’s decision, the company reported. That decision mirrors rival Blockbuster Inc., which last summer decided to offer only Blu-ray titles at its company-owned rental stores. Warner Home Video last month said beginning in June it would release high-def titles exclusively in the Blu-ray format, joining Lionsgate, Sony Pictures Home Entertainment, 20th Century Fox Home Entertainment and Walt Disney Studios Home Entertainment. The two remaining majors, Paramount Home Entertainment and Universal Studios Home Entertainment, publish exclusively in HD DVD. Netflix said the industry’s stated preference for Blu-ray made it clear that the company needs to transition to a single format. “The prolonged period of competition between two formats has prevented clear communication to the consumer regarding the richness of the high-def experience versus standard-definition,” said Ted Sarandos, chief content officer for Netflix. Michael Pachter, media analyst with Wedbush Morgan Securities in Los Angeles, doubts enlightenment is coming. “Not many rental consumers are flocking to Blu-ray or HD DVD,” Pachter said. “Probably 3% of U.S. rental households rent HD.” Netflix spokesperson Steve Swasey admitted the percentage of high-def rentals was not big. “It’s a small amount, consistent with the rest of the industry,” he said. Russ Crupnick, VP and senior entertainment analyst with The NPD Group, said Netflix’s announcement was good PR. “It sounds like another drop in the bucket,” Crupnick said. Meanwhile, at least one major retailer is keeping a foot planted in both formats. Noah Hirschman, director of audio and video at Amazon. com, said: “We’re still carrying HD DVD. We have 162 titles available. While we expect sales of this format may decline over time as more studios embrace Blu-ray, we are format agnostic. We owe it to our 70 million customers to carry it. HD DVD is still viable, we want to support it and our customers still want it.” Writers Opt for New Media Continued from page 1 the producer’s gross receipts. A key provision hammered out by the guild during negotiations mandated new media residuals be based on the distributor’s gross, which they believe is more indicative of actual revenue than the producer’s gross. The DVD rate was an initial pawn in negotiations, as the WGA felt hoodwinked by producers in the 1980s. At the time, VHS was fairly new, and producers said packaged media was an unknown commodity and paid accordingly. The guild vowed not to be burned by new media as DVD revenue eclipsed theatrical revenue over the years. When the AMPTP refused to discuss DVD during talks Nov. 4, the WGA responded by going on strike. In recent negotiations, the DVD rate was not revisited, with both sides focusing on new media. “The guild felt it was important to get an improved rate for new media going forward, so we gave the existing DVD rate as a concession to make the deal,” said WGA spokesperson Gregg Mitchell. He said the WGA felt it was imperative members receive a fair share for the online content they create. “Since the future is new media, we focused on that,” Mitchell said. “We negotiated the best deal in 30 years.” Residuals for material repurposed online include 1.2% of the distributor’s gross for download rentals (streaming) and 0.36% of distributor’s gross for electronic sellthrough of the first 100,000 episodic TV downloads and 50,000 featurefilm units. TV downloads beyond 100,000 units pay 0.7% of distributor’s gross and 0.65% for movies beyond 50,000 units. Ad-supported streaming of theatrical movies produced after July 1, 1971, pays 1.2% of distributor’s gross. Ad-supported library TV content produced after 1977 pays 2% of distributor’s gross. New ad-supported TV streams pay 2% of the distributor’s gross. L A T E FL A SH ES I PEERFLIX SITES GET 2.4M HITS IN JANUARY Online movie company Peerflix Media Network said Feb. 14 that its group of Web sites, which includes DVD trading site Peerflix.com, received 2.4 million unique U.S. visitors in January, 13 times its usual visitors to its sites. Peerflix Media Network also runs DVDVerdict.com, TheMovieBlog. com, and FirstShowing.Net. Bridge Home Entertainment has promoted two insiders, former CFO Nathan Hart and head of operations Mike Newcomb, to serve as co-presidents. The two replace Tim Clott, the former Paramount Home Video and Lyrick Studios executive who took the helm of Echo Bridge in the summer of 2005. Clott left to pursue other opportunities. – Chris Tribbey I ECHO BRIDGE GETS NEW CO-PRESIDENTS Independent DVD distributor Echo Correction: In the Jan. 27 issue, Jon Cope Productions was misspelled. HOME MEDIA MAGAZINE (ISSN 1934-9882) is published weekly 51 times per year (weekly except for one week at the end of December) by Questex Media Group, Inc., 306 West Michigan Street, Suite 200, Duluth, MN 55802. Subscription rates: $49.99 for one year in the United States and Possessions; $79.99 for one year in Canada and Mexico; all other countries $99.99 for one year (by surface mail). Add $75 annually for air-expedited service. Single copies (prepaid only): $6.99 in the United States, $8.99 in Canada and Mexico, $13.99 all other countries. Back issues, if available: $9.99 in the U.S.; $15.99 in Canada and Mexico; $26.99 for all other countries. 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Table of Contents Feed for the Digital Edition of Home Media Magazine - February 17-23, 2008

Contents News Health/Fitness Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - February 17-23, 2008

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