Home Media Magazine - July 29-August 4, 2007 - (Page 1)

JULY 29–AUGUST 4, 2007 >> H I G H-D E F H I G H-D E F MAR KE T S HAR E Blu-ray Disc and HD DVD Sales Comparison as of 7/22/07 Week Ended 7/22 Year-to-Date I Blu-ray I HD DVD Since Inception 26% 74% 67% 33% 60% 40% Source: Nielsen VideoScan First Alert data B R I N G I N G D I G I TA L E N T E R TA I N M E N T TO YO U Rental Report Blockbuster CEO Netflix Posts Its Promises Profit First Drop in Subs By Erik Gruenwedel R E TA I L New Blockbuster Inc. chairman and CEO Jim Keyes didn’t waste time outlining his desire to reverse the financial fortunes of the Dallas-based No. 1 rental chain. Speaking to investors after Blockbuster posted a second-quarter (ended July 1) loss of $35.3 million, he said stores must become more relevant to consumers and more profitable for shareholders. Blockbuster reported profit of $68.4 million during the same period last year. “Clearly the rental industry is in transition,” Keyes said. “Our challenge is to successfully change the business concept and business model from comparable-store sales declines to achieving sustainable growth.” Worldwide same-store rental revenue fell 1.3%, See BLOCKBUSTER, Page 26 By Erik Gruenwedel R E TA I L Online DVD rental pioneer Netflix Inc. reported its first drop in subscribers, for the second quarter of fiscal 2007 (ended June 30). The results, combined with revised downward revenue and profit forecasts and a separate announcement to cut $1 from two of its monthly subscription programs, sent Netflix shares tumbling last week. Los Gatos, Calif.-based Netflix, which is in a protracted battle with Blockbuster Inc.’s Total Access for Web-based movie rentals, saw a net decrease of 55,000 subscribers in the quarter. During the same period last year, Netflix reported a net subscriber gain of 303,000. The service gained 481,000 net subscribers during the previous quarter (ended March 31). Netflix reported more than 6.7 million total See NETFLIX, Page 26 Target Turning Blu Will offer Sony Blu-ray Disc Player on endcap By Thomas K. Arnold R E TA I L Target Stores said it will carry Sony’s $499 Blu-ray Disc player as its exclusive high-definition home video system during the critical holiday selling season and bring in more Blu-ray Disc software. The Sony BDP-S300 will arrive in Target stores in October as part of a holiday season endcap that also will feature an expanded inventory of Blu-ray Disc movies from Sony Pictures Home Entertainment, Walt Disney Studios Home Entertainment and Warner Home Video. David Bishop, president of Sony Pictures Home Entertainment and an ardent Blu-ray Disc supporter, said the move delivers another blow to rival next-generation format HD DVD. About a month ago Blockbuster Inc. announced it will carry only Blu-ray Disc software in 1,700 of its company-owned rental stores. “I think what you’re seeing is that retailers are deciding,” Bishop said. “This is the begin- Sony BDP-S300 ning of a trend. Retailers are very impatient now. It’s not like DVD sales are in rapid growth mode the way they were three or four years ago. They are flat or in a state of decline, See TARGET, Page 26 MICROSOFT CUTS HD DVD PRICE By John Gaudiosi AN DIEGO — Microsoft will cut its Xbox 360 HD DVD drive from $200 to $180 starting Aug. 1, the company announced at ComicCon International. In addition, gamers who pick up the HD DVD drive will now get five free HD DVDs from a list of 15 titles through Toshiba’s Perfect Offer program. Other Xbox 360-related Comic-Con news See MICROSOFT, Page 26 S INSIDE >> Tivo’s New HD DVR Unit will cost $299, $500 less than the last model. >> Props for 1080p The higher resolution HDTVs are driving sales. >> Razor Digital Blu Indie supplier will offer nature titles on Blu-ray. >> E LE C T R O N I C D E LI V E RY I N S I D E Vongo Promo Vongo and FYE offer a $5 DVD coupon with a Hellboy Animated: Sword of Storms download. Comic-Con a Growing Push for Home Video Staff Reports AN DIEGO — Comic-Con International has become a high-profile staging ground for new Hollywood movies, but it’s also become increasingly important to the studios’ home entertainment divisions. This year, one of the most visible fixtures on the massive show floor was a life-size replica of the Flying Dutchman, the pirate ship featured in Pirates of the Caribbean: At Genius/Weinstein brought a Cherry Darling look-alike for See COMIC-CON, Page 26 Death Proof (L) and Disney a ship for Pirates 3 (see page 24). A New Tune CinemaNow beefs up its music offerings. S PAGE 10 NEWS New Line’s Stephen Einhorn is named president of DEG: The Digital Entertainment Group; Bob Chapek is chairman. RESEARCH Sony Pictures Home Entertainment has Premonition on the top of the sellers and rental charts for the week. Page 4 Page 20

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

Home Media Magazine - July 29-August 4, 2007

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