Home Media Magazine - March 16-22, 2008 - (Page 28) NEWS Iger Pleased Blu-ray Has Won Format War Continued from page 1 www.homemediamagazine.com At the same time, Moonves scoffed at the idea that the only valuable consumer is a young consumer. “It’s a silly idea that an 18-year-old is considered more important than a 50-year-old,” he said. Moonves said that CBS is expanding its production of content and noted that the company is launching a CBS film unit that will be producing between four and six feature films per year, with budgets in the $50 million to $60 million range. During several of the confab’s panels, industry experts discussed the nuts and bolts of digital distribution. Ron Lamprecht, SVP of digital distribution for NBC Universal, and one of the developers of Hulu, said it’s important to pay close attention to consumer response. Hulu’s mission is “high quality professionally produced content,” he said. But it’s hard to know if consumers are looking at content online instead of or in addition to traditional television. “A view online may or may not be cannibalistic of a view on air,” he said. top $1 billion this year, up from $750 million last year. Although he firmly denied that Disney is interested in purchasing AOL, he did note that the company is growing its online presence through both brand extension and acquisition. In the former category, he mentioned a new Cars site that will enable users to enter the world that was created in the animated film. In the latter category, he talked about Club Penguin, a new social networking site that Disney has acquired aimed at 5- to 8-year-olds. “Creating more engagement with a franchise adds value,” he said. “Let’s embrace consumers who embrace technology.” Iger noted that having Steve Jobs on Disney’s board of directors has made the company even more forwardlooking in its approach to new media. He said that in the 18 months Disneyowned movies and TV shows have been available on iTunes, consumers have downloaded 50 million television episodes and 4 million movies. Iger said he is pleased the format war between Blu-ray Disc and HD DVD has subsided. Now companies can educate consumers about the format’s features, he said. “The interactive capabilities of that platform will add another dimension to the movie-watching experience at home,” he said. He noted that there has been a flattening of the DVD business both in the United States and globally and attributed the decline to the normal lifespan of a technology. “Buy rates come down over time as technology penetrates,” he said. “The Disney name on a DVD makes a difference,” Iger said. “People want to own those films. Blu-ray will create some growth. I can’t predict how far and how fast, but it will be positive, not negative.” But Iger isn’t willing to throw in the towel on so-called old media. He noted that two of the company’s most successful recent properties sprang from old media roots. Both “Hannah Montana” and High School Musical had their beginnings on the Disney channel. “More mature platforms still can generate a lot of value, and that includes the big-screen movie experience,” Iger said. “We introduce it to the world on a more traditional platform and use new technology to extend the brand.” In another keynote, Les Moonves, president and CEO of CBS corporation, said trying to create convergence between all of the company’s arms conjures up the image of “someone driving a car on the freeway at 60 miles per hour while trying to change the tire at the same time.” Moonves said that CBS is also embracing new media and digital distribution. He cited the company’s acquisition of cable station College Sports Television and its transformation into a multiplatform source of college sports programming as an example. This year CSTV will offer March Madness on Demand, which let fans stream the NCAA basketball tournament games. Because CBS Sports has the rights to the tournament, Moonves said the dollars the programming will generate represent “new revenue for content we are already producing, money that except for broadband costs, drops right to the bottom line.” Cinequest Honors Keaton Cinequest bestowed its Maverick Spirit Award to actor Michael Keaton (right) during the Cinequest Film Festival in San Jose, Calif. Pictured with Keaton is actress and producer Jennifer Siebel, who presented the awards. Photo by: Dane Andrew DVD Rental Keeps on Ticking Continued from page 1 Finally, Gallery, which said it would exit bankruptcy protection in the second quarter, posted monthly income of $48.9 million, offsetting a $36.2 million loss at subsidiary Hollywood Video. Collectively, the three companies generated revenue exceeding $1.8 billion. “It would indicate the rumors of [DVD rental’s] death are premature,” said Arvind Bhatia, media analyst with Sterne Agee Group in Dallas. Phil Leigh, media analyst with Inside Digital Media in Tampa, Fla., said ongoing concerns about a recession help fuel home entertainment as consumers scale back discretionary spending and stay home. “The consumer during a recession watches more movies at home and is more inclined to rent than buy,” Leigh said. Alden Mahabir, analyst with Utendahl Capital Partners, said Blockbuster’s turnaround is the result of CEO Jim Keyes’ ability to refocus the company on its core assets: brand and stores. “We view the relatively new management team’s ability to cut cost, reduce debt and improve sales trends, as a compelling story in the near-term,” Mahabir wrote in a research note. Last October, Michael Pachter with Wedbush Morgan Securities in Los Angeles said Movie Gallery’s plan to eliminate 1,000 stores could generate $400 million to $500 million in incremental revenue for Blockbuster. Finally, Andy Marken with Jon Peddie Research in Tiburon, Calif., said DVD rentals and Netflix would prosper for the next five years, as standard DVD remained a major profit driver. “We don’t see Blu-ray becoming more than a rounding error for Netflix for a couple of years, with major traction [15% to 20% of total volume] four to five years out and solid numbers seven to nine years out,” Marken said. Bewkes: Indies in Catch 22 Continued from page 1 Why give that up?” Richard Parsons’ position Jan. 1, Bewkes last The CEO said with Warner possessing month folded New Line — known for theatri- the largest distribution (theatrical, TV, cal and home video franchises “Nightmare VOD, DVD) channel in the world, the on Elm Street,” “Austin Powers,” “Rush studio was able to take on distribution and Hour” and “The Lord of the Rings,” among marketing of titles they no longer had to others, into Warner Bros. Entertainment. finance themselves. A majority of the independent’s 600 New Line, by comparison, had transiemployees at offices in New York tioned from a reliable indepenand Los Angeles are expected to dent subsidiary to a studio in lose their jobs. need of reducing its film operatThe future of New Line Home ing expenses, he said. Entertainment and president “So we were going to cut the Stephen Einhorn remains unNew Line slate,” Bewkes said. “It known. is far more profitable to put that Speaking March 11 at the Bear Bewkes through one theatrical distribuStearns 21st annual media confertion system.” ence in New York, Bewkes said New Line He said that made New Line’s corporate had fallen victim to an independent studio’s infrastructure unnecessary. Warner Bros. catch-22 predicament: mortgaging foreign last year integrated theatrical and home rights to finance new productions. video marketing, he added. He said overseas box office receipts “You really don’t want or need to have have become the economic majority of a a separate corporation of all the different film. New Line was pre-selling the foreign functions,” Bewkes said. rights to finance (or reduce the financial He said New Line will remain as a label risk to) their production slate, he said. with a reduced staff on par with what “We wanted to keep [more of] the the studio did with HBO and New Line’s overseas’ returns,” Bewkes said. “You can Picturehouse label. Published reports say name a number of films — 300, Golden the studio is in discussions with Toby EmCompass, etc. — you make a lot more merich, New Line’s president of producmoney outside the country than inside. tions, to oversee operations. L ATE FL ASHES I SONY DIGITAL VET DEPARTS Yair Landau, president of Sony Pictures Entertainment’s digital division, is leaving the studio in April after 17 years to start a video game and animation venture. Landau, who helped create Sony’s digital animation and effects business, reportedly secured the rights to Marvel Comics’ Spider-Man, which became one of the studio’s most lucrative film franchises, generating revenue of $900 million. Separately, Sony Computer Entertainment will oversee operations of Sony Online Entertainment in an effort to maximize online content development for the PlayStation 3. – Erik Gruenwedel I SONY PICTURES UPS JEAN, HIRES GARTLAND Sony Pictures Home Entertainment has promoted Lisa Jean to executive director, marketing, reporting to Suzanne White, VP, marketing. The company also has hired Brian Gartland as director of retail merchandising, reporting to Noam Meppen, VP, retail promotions and merchandising. Jean will add faith content to her previous duties overseeing family and special interest releases. Gartland will manage the company’s U.S. retail merchandising team and expand the company’s presence in non-traditional retailers. He previously worked at Skechers USA. – Billy Gil 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 State http://www.homemediamagazine.com
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