Home Media Magazine - April 20-26, 2008 - (Page 28)

NEWS PEVE: Sanders Sees Promise Continued from page 1 Entertainment Conference, held here April 17-18, said that the opportunity offered by the high installed base of HD televisions was yet to be fully exploited, especially in Europe where he described the number of HD channels offered as “paltry.” “We are going from 39 million homes with HDTVs in Europe last year to 139 million by 2012,” he said. “That is an enormous opportunity if we can convert those home into buyers of high-def DVDs.” Quoting conference organizer Screen Digest’s latest numbers on Blu-ray player penetration following the end of the format war, Sanders suggested that total Blu-ray households in Europe would grow dramatically from 9 million in 2008 to 67.1 million by 2012. The key opportunity in the short term, Sanders added, lay with PS3 owners. He praised efforts by Sony to market the PS3 as a movie player, revealing that advertising in the United States had caused a healthy spike in Blu-ray disc sales and that the campaign was now rolling out around the world. “Software sales are ready to explode,” he said, warning that, “This also creates a challenge for the industry because the replication capacity has to catch up with the demand if we are going to fulfill this opportunity.” Paraphrasing Field of Dreams, he suggested that investment in new replication lines was a pretty safe bet. “If we build it, they will come,” he said. He also suggested that the home video industry should view digital distribution as an opportunity to augment the packaged-goods industry, not as a threat to its existence. “We need to use digital media to increase www.homemediamagazine.com crease from its original DVD sales projections in Belgium, the Netherlands and the Nordic regions. But he did admit that, “DVD rental was down slightly but our rental business is down in the non-test markets also.” “The important thing is that it growing consumers interest, and we are generating more consumer dollars from these films than we would have done otherwise,” he said. At the same time, Sanders said the home entertainment sector had to look after standard-definition DVD on which the vast majority of its revenue is based. He also called on the business to find other ways of stimulating sales other than cutting price. Pointing to added-value products such as Ultimate Collector’s Editions and complete TV series on disc, he said Warner had found “real consumer interest in stepping up to these more expensive gifts.” “It is not just about growing standard-def by reducing price and multi-buys, there are other ways to be doing that,” he said. Blockbuster Move Criticized Continued from page 1 interest in new product,” he said. “We need to explore how to use it to add value to the packaged goods. We don’t see it as either/or — digital or packaged goods — we see them going hand in hand.” He also believes that the digital copy or “second session” now being tested around the world on the DVD release of movies such as I Am Legend was key to adding value to consumer transactions and to increasing sales. “The buy rates increase annually by 1.5 buys over standard-def DVD if you make this offer to consumers,” Sanders explained. He also warned the industry not “to make the same mistake the music industry made by not making digital product available legitimately.” Trials of the simultaneous release of VOD with DVD were showing a benefit for the market, Sanders said. Both VOD and sellthrough increased he said — Warner has seen 33% in- PEVE: SONY’S BROWN URGES EXCITING MARKETING By Sam Andrews P ARIS — Inviting his audience to snooze or blackberry if they weren’t engaged by his speech, Matt Brown, EVP, international, at Sony Pictures Home Entertainment, called on retailers and DVD distributors to put the excitement back into selling movies to prevent losing the consumer to other entertainment platforms. Brown, delivering the afternoon keynote at the PEVE Digital Entertainment Conference, said YouTube, cell phones, computer games and other entertainment options were diverting young consumers away from the packaged-media business. Claiming that Blu-ray Disc has the capacity “to really bring the movie-watching and game-playing experience together,” Brown said it was up to retailers and distributors to excite the consumer about movies again. Brown said the industry needed to re-energize the business. “I absolutely believe we’ve gotten away from exciting consumers in the retail space,” he said. “Whether it is physical space or onscreen, there are ways you can merchandise and market that excite people rather than having stagnant displays.” JUST ANNOUNCED A Weekly Product Update* TITLE STREET DATE PREBOOK BOX OFFICE (MILLIONS) GENRE PRICE 10,000 B.C. 6/24 5/20 $91.9 Action DVD $28.98, BD $35.99 Warner. 2008. Camilla Belle, Steven Strait, Omar Sharif, Cliff Curtis. A prehistoric action-adventure that follows a young warrior’s perilous journey to save his tribe from raiding warlords. The Spiderwick Chronicles 6/24 5/13 $70.3 Fantasy DVD $29.99 Paramount. 2008. Freddie Highmore, Mary Louise Parker, Sarah Bolger, David Strathairn, Nick Nolte. Based on the best-selling book series, the Grace children investigate the bizarre happenings in their new home, Spiderwick Estate. Also available as a two-DVD special edition at $36.99. Fool’s Gold 6/17 5/13 $69 Adventure DVD $28.98, BD $35.99 Warner. 2008. Matthew McConaughey, Kate Hudson, Donald Sutherland, Ewen Bremner. A divorced couple searches for the Queen’s Dowry, a treasure that disappeared in the Caribbean in 1715, with gangsters hot on their trail. The Bank Job 7/15 6/18 $28.6 Thriller DVD $29.95, BD $39.99 Lionsgate. 2008. Jason Statham, Saffron Burrows, Stephen Campbell Moore, Daniel Mays, James Faulkner. A group of criminals pulls a bank heist in London and ends up with different loot than expected. Also available in a two-DVD special edition at $34.98. Grace is Gone 5/27 Now $0.05 Drama DVD $28.95 Genius/Weinstein. 2007. John Cusack, Alessandro Nivola, Marisa Tomei. A man learns his wife has been killed in Iraq and takes his two daughters on a road trip while he tries to figure out how to tell them the news. The Onion Movie 6/3 5/7 DTV Comedy DVD $26.98 Fox. 2007. From the editors of the popular satirical newspaper The Onion comes an unrated look at world events, cultural fads and curious human behavior. Includes deleted scenes and outtakes. * In order of box office, then prebook date Combining Blockbuster and Circuit City would realize an $18 billion global retail enterprise, Blockbuster stated in making its case. Blockbuster operates nearly 8,000 stores worldwide while Circuit City operates 693 stores domestically and 779 locations abroad. “Our proposal offers Circuit City a significant premium to its existing stock price and creates a gamechanging retail concept with a sustainable competitive advantage,” said Blockbuster CEO Jim Keyes. Richmond, Va.-based Circuit City has been under pressure to resurrect itself as revenue and earnings results continue to disappoint. Adding to the tumult, dissident Circuit City shareholder Mark Wattles, who co-founded longtime Blockbuster rival Hollywood Video, recently submitted a slate of board nominees and called for new management, including the firing of Schoonover. Circuit City said it would not cooperate with Blockbuster after it said it failed to receive proper financial assurances from the rental chain. The electronics retailer advised its shareholders to reserve judgment. “While willing to engage in discussions to further understand Blockbuster’s proposal, Circuit City is unwilling to provide additional detailed due-diligence information and embark on a highly conditional undertaking until these questions are answered satisfactorily,” a Circuit City release stated. Speaking to investors, Keyes said Blockbuster’s offer was compelling and at $6 per share represented a 54% premium on Circuit City’s closing price April 11. He said that despite initial negativity by the market toward the offer, Blockbuster remained committed and believed the upside for shareholders of both companies was “simply too attractive to ignore.” The CEO said the rental company had the cash to complete the deal but was willing to issue additional shares to existing shareholders to make it happen. Keyes said the move did not reflect a retraction of efforts toward distributing movie rentals via kiosks and electronically. Bolstering his enthusiasm was the fact Blockbuster expects to report a profit of $30 million for first-quarter fiscal 2008 (which ended March 31), compared to a loss of $49 million during the same period in 2007. Keyes said combining Blockbuster’s entertainment content with Circuit City’s consumer electronics capability would result in a financially stronger company “our peers simply could not match.” The CEO envisioned Blockbuster rental kiosks in Circuit City stores and Circuit City video game terminals in Blockbuster locations. Analysts remained nonplussed. Henry Blodget and Aaron Task, analysts with Yahoo’s Tech Ticker, belittled the proposal, calling it one of the worst mergers & acquisition offers ever. The two said they first assumed Best Buy Co. had made the offer and couldn’t believe it was Blockbuster, which they said doesn’t have the available cash or mojo to pull off the deal. “It’s just hard to fathom how these two companies are going to come together that makes any sense,” Task said. “It’s really ridiculous.” Blodget said that conceptually combining Blockbuster with a major CE retailer would work only by ignoring the evolution of entertainment distribution, which he said has transitioned to DVD rental pioneer Netflix, digital video recorders and video-on-demand. He said both companies are in trouble financially. “If you put two bricks together, they’re still not going to float,” Task said. “It just screams trouble,” Blodget said. J.P. Morgan analyst Barton Crockett downgraded Blockbuster’s stock from “overweigh http://www.homemediamagazine.com

Table of Contents Feed for the Digital Edition of Home Media Magazine - April 20-26, 2008

Home Media Magazine - April 20-26, 2008 Contents News Commentary TV DVD Horror Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - April 20-26, 2008

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