Home Media Magazine - March 23-29, 2008 - (Page 10)

NEWS www.homemediamagazine.com Missed Guidance Sends Genius Stock Tumbling By Erik Gruenwedel SUPPLIER A 15% drop below projected DVD sales in the last weeks of 2007, coupled with the cancellation of a significant new retail partner, resulted in Genius Products LLC posting a fourth-quarter (which ended Dec. 31) loss of $12.2 million. The news sent shares of the Santa Monica, Calif.-based distributor — 70% owned by The Weinstein Co. — plummeting nearly 45% to close March 19 at 56 cents per share. In an investor call, Genius executives refused to name the lost retail partner after multiple questions. Genius CEO Trevor Drinkwater said the company distributed 60 million DVDs among 350 titles in 2007. The majority he said generated just 2% of overall revenue. By comparison, the CEO said Genius generated the bulk of its DVD revenue from the distribution of about 70 Weinstein titles. “This move necessitated an aggressive write-off of the remaining portion of our non-branded DVD business,” Drinkwater said. “We had to make the hard decision to move away from those businesses. It had proven not to be an effective use of our time.” Wall Street showed little sympathy. David Bank, research analyst with RBC Capital Markets Corp. in New York, said Genius continued to fail Gallery Back in the Red By Erik Gruenwedel RETAIL One month after reporting monthly profit, bankrupt Movie Gallery Inc. posted a net loss of $469,000 on consolidated revenue of nearly $200 million for the period from Jan. 7 to Feb. 10. Dothan, Ala.-based Gallery posted profit of $4.1 million on revenue of $131.2 million at its Hollywood Video subsidiary for the period, compared to a net loss of $36.2 million and revenue of $182 million in the previous period from Dec. 3, 2007, to Jan. 6, 2008. The No. 2 video rental chain reported a net loss of $4.5 million on revenue of $68.6 million at Gallery stores for the period versus a profit of $48.9 million and revenue of $71.5 million during the last period. Consolidated rental revenue at Gallery approached nearly $150 «WE HAD TO MAKE THE HARD DECISION TO MOVE AWAY FROM [THE NON-BRANDED DVD BUSINESSES]. IT HAD PROVEN NOT TO BE AN EFFECTIVE USE OF OUR TIME.» TREVOR DRINKWATER, GENIUS CEO in meeting the market’s and its own revenue and profitability targets. “We need two to three clean quarters before getting more constructive,” Bank wrote in a research note. “We’re somewhat surprised to see such a material [fourth-quarter] miss given that guidance was given Nov. 14.” The analyst said Genius’ relationship with Weinstien Co. remained an albatross around its neck due to operating inefficiencies between the two companies. Bank called on Weinstein Co. to increase its distribution fee to Genius See GENIUS, Page 26 BLOCKBUSTER ONLINE HAS FREE GAME By Erik Gruenwedel To help jumpstart DVD rental interest in The Weinstein Co.’s The Mist, from author Stephen King, Blockbuster Inc. is launching a free online game based on the movie. The movie, which is part of the Weinstein’s exclusive rental program with Blockbuster, will be released March 25 and is distributed by Genius Products Inc. Through April 8, The Mist game gives users an opportunity to defeat a series of predators battling their way through three RETAIL skill levels based on scenes in the movie. The game is accessible through Blockbuster.com, which features a home page, movie trailer, online rental option and ability to receive a $1.99 coupon redeemable at Blockbuster stores. Recent Weinstein The Mist rental exclusives included King’s 1408, The Nanny Diaries, Michael Moore’s Sicko and the Grindhouse double feature of Death Proof from Quentin Tarantino and Robert Rodriguez’s Planet Terror. million for the period, compared to more than $160 million during the previous period. DVD and related product sales fell to nearly $50 million, compared to $92.7 million in the comparable period the year before. Despite store closures and streamlining, operation expenses remained nearly identical, with $53.5 million (versus $55.5 million) for Hollywood and $31 million (versus $28.9 million) for Gallery. Since filing for bankruptcy protection last October, Gallery has generated $521 million and $228 million in revenue at Hollywood and Gallery locations, respectively. In that time, Hollywood posted a net loss of $98.5 million, compared to profit of $8.2 million at Gallery. Gallery is slated to exit bankruptcy protection in the second quarter. BRIEFS I LIONSGATE PACKAGES GREEN ‘WEEDS’ With the lead character a pot-selling single mom and the studio renowned for its eclectic leanings, it makes sense Lionsgate June 3 would release Weeds: Season Three on DVD and Blu-ray with the smallest carbon footprint possible. The acclaimed Showtime series marks the Santa Monica, Calif.-based mini-major’s ﬁrst “green initiative” release. In addition to using 100% recycled ﬁbers for the packaging, the DVD trays are made of recycled plastic water bottles. The initial DVD production run is expected to keep 500,000 bottles from ending up in a landﬁll, according to Lionsgate. Recycled DVD trays require less than 10% of the energy required to make a new Amaray case. – Erik Gruenwedel I NETFLIX’s HASTINGS EXERCISES OPTIONS Reed Hastings, co-founder and CEO of online DVD rental pioneer Netﬂix, March 19 exercised a pre-arranged stock option purchase of 2,500 shares for $1.50 each. Hastings He then sold 10,000 shares the same day for $33.56 each, realizing a net gain of $331,850. – Erik Gruenwedel YEAR TO DATE NEW DVD RELEASE COMPARISONS TWO MONTHS: 2007 AND 2008 BY CATEGORY If you were to look at new-to-DVD release trends for the first two months of 2008, and compare them to the same period in 2007, it is likely that you wouldn’t have a clue as to where the entire year might be heading. The reason? There are mixed messages from the various sectors of the DVD market. The overall market for new-to-DVD releases is down 9.7%, but all of that (and more) is centered in the low-volume special interest and music categories. The Hollywood studios are collectively up 2% in title count — which sounds great, but they’ve cut their output of theatrical catalog in half (28 titles this year versus 57 during the same period in 2007). That’s their bread and butter. — Ralph Tribbey DVD Title Release Category Documentary TV Series Programming: Multidisc Sets TV Movies Theatrical Catalog (pre-1997) Children’s Programming, Non-Feature New Theatrical (1997-current) Direct-to-Video Feature Films Adult-Themed, Non-Feature Anime TV Series Programming (single-disc) Special Interest Foreign Language Feature Films Music, Opera and Stage Performances All Other Categories Two Month New-To-DVD Totals Studio Totals All Other Sources 2007 26 71 34 160 92 114 176 48 79 30 800 188 269 57 2,144 254 1,890 2008 47 105 44 175 94 116 179 41 66 25 656 151 197 40 1,936 259 1,677 +/21 34 10 15 2 2 3 (7) (13) (5) (144) (37) (72) (17) (208) 5 (213) %+/80.8% 47.9% 29.4% 9.4% 2.2% 1.8% 1.7% -14.6% -16.5% -16.7% -18.0% -19.7% -26.8% -29.8% -9.7% 2.0% -11.3% PEOPLE I SONY UPS TWO Sony Pictures Home Entertainment (SPHE) has promoted Emma Pemberton to executive director of international marketing, reporting to Alison Biggers, SVP of Pemberton international marketing; and Marcela Bailey to VP of information technology, reporting to divisional CIO David Cortese. Pemberton will conBailey tinue to oversee the international marketing group. She previously served as director of international marketing. Bailey will now oversee U.S. and Canadian information technology projects, applications and support. I PORCHLIGHT UPS JONES PorchLight Entertainment, a producer of family product, has promoted Gary Jones to president of PorchLight Home Entertainment. Jones has been with PorchLight in a SVP role since early 2007, overseeing the launch and growth of the company’s home entertainment label. Prior to working at PorchLight, Jones held executive positions at New Concorde, Trimark and Republic Pictures. – Billy Gil * New-to-DVD releases through Feb. 29, 2008 Studios: DreamWorks, Lionsgate, MGM, New Line, Paramount, Sony Pictures, 20th Century Fox, Universal, Walt Disney Studios and Warner Bros. I THIS WEEK’S RELEASE ACTIVITY FOR DVD Titles in Release Through Week Ended March 14, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . Total Net DVD Titles Announced and/or In Release Through June 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . 84,395+334 85,000+401 406 Scheduled 26 I THIS WEEK’S RELEASE ACTIVITY FOR BLU-RAY As of Week Ended March 14 . . .Released I THIS WEEK’S RELEASE ACTIVITY FOR HD DVD Scheduled As of Week Ended March 14 . . .Released Home Media Magazine March 23–29, 2008 http://www.homemediamagazine.com

Table of Contents Feed for the Digital Edition of Home Media Magazine - March 23-29, 2008

Home Media Magazine - March 23-29, 2008 Contents News TV DVD Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - March 23-29, 2008

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.