Home Media Magazine - April 6 - April 12, 2009 - (Page 18) NEWS Continued from page 6 www.homemediamagazine.com E1 Relaunches Clips Site Blockbuster CEO Makes $8.4M With Scavenger Hunt By John Latchem 1 Entertainment is hoping the lure of a cash reward will drive traffic to its relaunched clips Web site. The company, formerly known as Koch Entertainment, has rebranded www.kochclips.com as www.E1clips.com and is running a scavenger hunt to promote awareness and usage of the site among the home entertainment industry. The site offers information, including clips and trailers, about 20 upcoming E1 releases, ranging from feature films to documentaries to TV DVD product. E1 describes the site as a “Super Tool” — an array of material designed to assist buyers and merchandisers in their purchasing and promotion decisions. To participate in the contest, visitors to www.E1clips.com should search among the clips accessible from the home page. One of the clips has the hidden message “You’ve Found the Qualifying Clip.” Windows Media Player is required to view the clips. Those interested in playing need only send an e-mail with “E1 Clips Scavenger Hunt” in the subject line to videosales@ kochent.com no later than Friday, April 10. The entry should include the participant’s name, company, street address, city, state, ZIP code, telephone number, e-mail address and the name of the clip with the qualifying message. Five winning entries will each receive a $100 American Express gift card. The contest is open to all members of the home video trade except employees of E1 Entertainment and distributed label personnel. The scavenger hunt kicked off April 1 with an ad on Home Media Magazine’s daily enewsletter. It is the first in a series of ongoing one-week-long campaigns, timed to the week prior to each month’s E1 Entertainment preorder date. Vivendi Ups Acquisitions By Thomas K. Arnold here’s been a flurry of acquisition activity at Vivendi Entertainment. The company is partnering with Event Films to bring three of controversial director Uwe Boll’s films to North America. Vivendi has acquired U.S. and Canadian home video, TV, digital and mobile distribution rights to two of the German filmmaker’s latest features, with Tunnel Rats coming to DVD June 30 and Far Cry following in November. A third film, Stoic, will be distributed by Vivendi in the United States only, with a DVD release pegged for early 2010. Vivendi Entertainment also has acquired $8.4 million in compensation, up more than 49% from fiscal 2007. Keyes was paid a base salary of $750,000 in addition to a bonus of more than $402,000 in the form of fully vested shares of Blockbuster Class A common stock, according to a regulatory filing. Keyes received an additional $1 million in stock awards on top of $6.26 million in stock options, among other compensation benefits. The CEO was rewarded for helping generate a 6.4% increase in domestic same-store sales (open at least 12 months), compared to a decrease of 6.9% in 2007. Keyes said the movie rental business remained an “incredibly fragmented landscape” of many players doing little pieces of the puzzle. He said Netflix gets a lot of attention despite operating a very segmented operation. “They are in the subscription business only,” he said. “It is a very good channel that Blockbuster also participates in, but it is one small segment of this industry.” Keyes said the “shiny new toy” in distribution remained the electronic download. He said Blockbuster is well-positioned in that market, with an excellent library of digital content. “But the reality is that it is a very small piece of the market,” Keyes said. “It is the fastest-growing segment. The brand lends itself to digital offering domestically and abroad, but it is still a sliver of the industry.” In the interim Blockbuster continues to divest itself from a physical presence in foreign markets, opting instead to sell and license the brand and return at a later date with a digital offering. “Through 2012 the bulk of the $22 billion rental market remains with physical distribution in stores,” Keyes said. Separately, Blockbuster will hold its annual shareholder meeting May 28 in Dallas. Agenda items include re-election of nine board members, including the company’s largest individual shareholder, rebel investor Carl Icahn, and changes to executive long-term compensation programs. T U.S. rights to four Biblical musical performances from Lightstone Pictures’ Liken Series. Esther and the King and Daniel and the Lions will be released on DVD in August, with two other titles, David and Goliath and The First Christmas, to follow on a still-to-be-determined date. On the other end of the spectrum, Vivendi in October 2009 will release Deep in the Valley, a sex comedy directed and written by Christian Forte, in both ‘R’-rated and unrated versions. The Persistent Entertainment production stars Denise Richards, Tracy Morgan and Kim Kardashian, along with Chris Pratt, Brendan Hines, Rachael Specter and Scott Caan. Rental Rival Fortunes Set by Debt Continued from page 6 billion in fiscal-2008 revenue, nearly 74% less than Blockbuster. It posted net income of $83 million. When Netflix announced it would soon up monthly Blu-ray rental prices by $1 to $9, depending on the plan, Wall Street rejoiced, sending shares up near a 52-week high of $44.42 per share. Luke Shagets, research associate with Sterne Agee in Dallas, which covers Blockbuster, said Netflix continues to favor acclaim because it operates a “completely different” business model without the substantial overhead with which Blockbuster contends, operating more than 7,400 stores globally. “Obviously the margins are a lot higher with Netflix, and thus it generates a lot more interest from the Street,” Shagets said. “It doesn’t really matter high much revenue you generate. It depends how much it costs to generate that CLASSIFIED SHOWCASE B U Y I N G G A M E S & B L U - R AY PA C K A G I N G revenue.” Perception aside, Blockbuster’s albatross involves about $854 million in debt (accrued when it was spun off by Viacom in 2004), including a $200 million credit revolver that comes due in August. It had $95 million in cash at the end of the year. Netflix, which ended the fiscal year with about $300 million in cash, including $117 million in free cash, has just $39 million in debt — largely due to the rollout of its streaming service. Michael Pachter, analyst with Wedbush Morgan Securities in Los Angeles, which covers Blockbuster, said the company’s debt was close to $4 per share, which made its enterprise value (an economic measure reflecting the market value of the whole business) actually reasonable. “But [Blockbuster’s] equity has very low market value at present,” Pachter said. “It is pounded because of the debt.” B RIEFS I FIRST RUN SPONSORS FILM FESTIVAL AWARD USED TAPES & DVDS First Run Features is sponsoring the 2009 Sarasota Film Festival Best Documentary Feature Award April 5. Seven films are in the running, and the winner receives a distribution offer from First Run and a screening during the fall 2009 Stranger Than Fiction series, held at the IFC Center in New York. First Run, which is celebrating its 30th anniversary as an independent film distributor, also has announced new acquisitions: acclaimed Turkish film Bliss, to open theatrically in Summer 2009; and home video acquisitions The Top Secret Trial of the Third Reich (which details the true story behind the Tom Cruise-starring film Valkyrie); James Castle: Portrait of an Artist; American Outrage; Full Battle Rattle; Inside the Koran; and Albert Schweitzer: Called to Africa, all to release on disc and digitally in 2009. Top Secret Trial (DVD $24.95) will street May 19, the same day as Valkyrie (Fox/MGM, DVD $29.98, two-DVD set $34.98, Blu-ray Disc $39.99). — Billy Gil REDUCING YOUR INVENTORY? FOR ADDITIONAL INFORMATION CONTACT: Kurt Wohlman (714) 338-6749 kwohlman@questex.com www.homemediamagazine.com We Buy VHS, and also DVD & Video Games xtreme deo E 733-7370 (203) Vi Home Media Magazine April 6–12, 2009 http://www.homemediamagazine.com http://www.kochclips.com http://www.E1clips.com http://www.E1clips.com http://www.homemediamagazine.com
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