Home Media Magazine - April 6-12, 2008 - (Page 40)

NEWS Blu-ray Still Faces Obstacles With Public Continued from page 1 www.homemediamagazine.com discs). However, the studios were not all producing compatible discs until the format war ended. Two of the six majors, Universal Studios and Paramount, were exclusive with HD DVD and still have yet to release their first Blu-ray Discs. Internationally, Blu-ray Disc still has a lot further to go than it does in the United States. Awareness is at 56% in Great Britain, 49% in Germany, 45% in Japan and just 30% in France. The HDTV household penetration rate, accordingly, is lower in those countries as well. In Great Britain an estimated 26.2 million households have HDTVs, for a penetration rate of 35%. In Japan the rate is just 28%, followed by 21% in France and 18% in Germany. “But we’ve got the digital switchover taking place, which is a good thing because the fact that you are replacing your TV means people will be thinking they might as well get an HDTV,” Kramer said. The high-def player penetration rate in Japan and Great Britain is at 9%, the same as it is in the United States. In France it’s 4% and in Germany, 4%. In contrast, 92% of British households have at least one DVD player, a higher percentage than in the United States. France is next, with 89%, followed by Germany at 84% and Japan at 82%. Since then, the studios and consumer electronics manufacturers supporting Blu-ray Disc have been ratchetting up their own promotional efforts — and encouraging retailers to devote more floor and shelf space to the next-generation format. Among men between the ages of 18 and 34, the critical “early adopter” demographic, Blu-ray awareness is at 76%, the Interpret study found. Yet, Kramer said, Blu-ray supporters “still have a lot to do.” “The format war is over, and they’ve taken Blu-ray from zero to majority awareness, but it doesn’t get easier from here, unfortunately,” he said. Kramer says the biggest impediment to Blu-ray’s mass-market success as the fact that it requires not just a new player, but also a new television. There are now 44.4 million HDTV households in the United States, Interpret research shows, or 39% of all 113.9 million TV households. That’s a significantly smaller pool than the one DVD faced when it was launched 11 years ago. “It’s an intermediate step DVD didn’t have,” Kramer said. “But it’s also a huge opportunity for studios to work with consumer electronics companies to get consumers to [buy] both at the same time.” The 10.3 million U.S. homes with a high-definition disc player represent 9% of all households. DVD penetration, by contrast, is at 91%, which Kramer calls “the saturation point.” The 9% figure includes Sony’s PlayStation 3, with a built-in Blu-ray drive. Disc buys among high-definition disc player owners are fairly evenly split between high-def discs (a mean of 8.7 discs over the last six months) and standard DVDs (7.7 Blockbuster Not Abandoning Online Rental Continued from page 1 New Line in the ‘Sickhouse’ substantially increased subscribers, but hurt the bottom line. Rival Netflix Inc., which saw a firstever decline in subscriber growth due to the meteoric rise of Total Access, characterized Blockbuster’s ad-spend on Total Access at the time as irrational. New CEO Jim Keyes admitted as much, saying Total Access had cost Blockbuster $114 million in gross profits during the first three quarters of fiscal 2007. He vowed a renewed emphasis on the storefront and a return to fiscal normalcy. “The video store still represents the majority of our business,” Keyes said. Blockbuster quadrupled its profit in the last quarter of fiscal 2007 and attention reverted back to online, according to Arvind Bhatia, media analyst with Sterne Agee & Leach in Dallas. He said the ads represented Blockbuster’s renewed desire to remain in the online rental business without mortgaging its future to do so. “Blockbuster views online as one part of their strategy as opposed to all of their strategy,” Bhatia said. “They want to maintain a certain subscriber base due to the investment they already put in.” He said Blockbuster has about 3.1 million subscribers, including 2.7 million online. Bhatia said the company needs 2 million subs to break even on Total Access, which he said necessitated continued investment. The analyst said Blockbuster had also promised to revisit Total Access once it adjusted monthly pricing levels. Blockbuster is now offering onemonth free trials of Total Access that grant users access to one online movie rental at a time and two free in-store rentals. “Considering Netflix has had offthe-chart success lately, Blockbuster had to do something,” Bhatia said. Blockbuster spokesperson Karen Raskopf said the Total Access spots ran through March 30, indicating the rental giant passed up the Final Four April 5, with the winners facing each other in the championship game April 7 in San Antonio, Texas. She said the spots represented cost effective ways to grow the subscription business profitably. Similar marketing efforts Raskopf said involved social networking site Facebook and a Web media deal with Yahoo. “While [TV] broadcast is not a big focus for us at this moment, we are always on the lookout for opportunities to promote Total Access,” Raskopf said. “March Madness was one of those opportunities.” At the Wizard World Los Angeles Convention March 15-16, New Line Home Entertainment promoted the March 18 DVD premiere of The Sickhouse, starring Gina Philips (second from right), who is surrounded by (L-R): New Line’s Nicole Blanchard, Michele Sanchez and Wendy Shimamura Ryan. Gallery Focusing Resources Best Buy Prez Sees Big Future for Mobile Continued from page 1 “While the decision to close stores is never easy, this final consolidation will allow us to further focus our resources on those stores with the strongest operating performance and best prospects for growth after we emerge from bankruptcy,” said Joe Malugen, chairman, president and CEO of Gallery. Following the closures, Gallery will have nearly 3,500 stores in North America under the Movie Gallery, Hollywood Video and Game Crazy brands. Results have been mixed for both the Hollywood Video and Gallery franchises. Hollywood stores posted net income of $4.1 million in the period from Jan. 7 to Feb. 10, and a loss of $36.2 million in the previous period from Dec. 3, 2007, to Jan. 6, 2008, according to regulatory filings. Gallery stores reported a net loss of $4.5 million from Jan. 7 to Feb. 10, versus profit of $48.9 million in the previous period. Gallery, which still faces a $7.5 million administrative expense charge from the Internal Revenue Service, hopes to emerge from bankruptcy protection in the second quarter. A hearing on Gallery’s restructuring is slated for April 9. Continued from page 1 driven by double-digit gains in video games and hardware, partially offset by undisclosed declines in DVD and music CD sales. Entertainment revenue comprised 21% of total sales, compared to 20% the previous year. Entertainment software comp sales increased 8.9% during the same period the year prior. In an investor call, Brian Dunn, president and COO of Best Buy, said the company will continue to ramp up distribution of its mobile phone service, which analysts say represents 2% of the market. The mobile phone division is available in 181 stores with plans to expand nationwide, including 300 Apple store locations, in the next 18 months. Dunn envisions the mobile market as an investment in the future of telecommunications and entertainment distribution. “If you are still not sure what the connected world is, pay attention the next time you land in an airplane,” Dunn said. “The instant the wheels hit the ground, it seems more than half of the people in the cabin are powering up handheld technology and connecting.” The Minneapolis-based No. 1 consumer electronics retailer reported revenue of $13.4 billion in the quarter, compared to $12.9 billion the previous year when the quarter included an additional week. For the fiscal year, profit topped $1.4 billion on revenue of $40 billion, compared to income of $1.37 billion and revenue of nearly $36 billion the previous year. The company opened 98 new stores in the United States during the fiscal year. Online revenue increased 25%, breaking the $1 billion mark. 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. Include $6.50 per order plus $2 per additional copy for U.S. postage and handling. Periodicals postage paid at Duluth MN 55806 and additional mailing offices. POSTMASTER: Please send address changes to HOME MEDIA MAGAZINE, P.O. Box 1270, Skokie, IL 60076-8270. Canadian G.S.T. number: 840033278RT0001, Publications Mail Agreement Number 40017597. Printed in the U.S.A. Copyright, 2008 Questex Media Group, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including by photocopy, recording or information storage and retrieval system, without permission in writing from the publisher. HOME MEDIA MAGAZINE does not verify any claims or other information appearing in any of the advertisements contained in the publication, and cannot take any responsibility for any losses or other damages incurred by readers in reliance on such content HOME MEDIA MAGAZINE welcomes unsolicited articles, manuscripts, photographs, illustrations an http://www.homemediamagazine.com

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Contents News TV DVD Cine Mercado Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - April 6-12, 2008

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