Home Media Magazine - August 19-25, 2007 - (Page 36)

ADVERTISEMENT PRODUCT SPOTLIGHTS Victory Multimedia presents NEWS Genius Reports First Company Profit Continued from page 8 www.homemediamagazine.com PUNISH ME MSRP: $26.95 A juvenile delinquent pulls his 49-year-old probation officer into a sado-masochistic affair. Street Date: 9/11/07 why our attention has now been turned to coproductions and content ownership.” The CEO said that in 2005 the average revenue per DVD unit was $2.50, compared to $10 in the first half of this year. About 40,000 units sold per new release in 2005, compared to about 130,000 units this year. He said Genius earns a $130,000 distribution fee on an average title release (130,000 units times $10 per unit average times a 10% fee). If Genius had licensed that same title, it would have earned about $320,000. And if it had been the producer, revenue would have risen to $650,000. “The amount of work needed to sell and distribute the release is exactly the same, and the return for our investors is significantly different,” Drinkwater said. For the second quarter, Genius reported total gross revenue of $145 million, up $30 million from the previous quarter, and net income of $2.1 million. Based on these results, the company adjusted upwards its full-year 2007 gross revenue guidance range, now $750 million to $800 million, up from $700 million to $800 million. Erik Gruenwedel contributed to this report. Drinkwater Continued from page 1 Contact Wolfe Video, Baker and Taylor, AEC, or your distributor today VACATIONLAND MSRP: $29.95 Cult film maker Todd Verow's semi-auto biographical growing up and coming out. Set in luscious Maine, two hot and hunky best friends discover there is more to their life than just football and beer. Especially after that first kiss! Available: NOW [as though] we are [mirroring] what happens in the video game business every time there is a console change. You begin to get consumer stagnation where they sit on the sidelines and wait [ for a resolution]. I think that has helped the rental business, and I think that has hurt the sellthrough business. Until we, as an industry, get more aggressive in satisfying consumer demand and making our product and category more interesting, things will stay stagnant. I HM: Is resolving the format war just a matter of getting the players below $200? ness, [and] this is another service we can offer. We are focused on connecting our retail partners to our content partners and allowing them to monetize the rights. So we are not actively going after the consumer directly. I HM: Is packaged media still the primary business? Drinkwater: Absolutely. And I think it will be for a long time. We are positioning ourselves for the future, but packaged media is still the lion’s share of the business. I HM: How are the HD DVD releases coming? Drinkwater: It takes more than that. That is one component. Price is obviously important to get the consumer involved. However, what made DVD such an interesting proposition for the consumer was that it came with better picture quality and sound quality than VHS. And it was hip and cool. We haven’t necessarily made high-def hip and cool over DVD yet. We really need to focus … so we can compete with exciting technologies like the new video game formats and the perceived exciting technology of digital distribution. I HM: Will Genius try to tackle that? Drinkwater: We are supporting it. It comes back to our philosophy to support what our content providers would like us to support. Some are supporting Blu-ray and others, HD DVD. The primary issue for us right now is that as a small independent, [high-def packaged media] is not a cheap business. We are taking a little bit of a wait-and-see approach. I don’t want to be stuck with a lot of inventory of other formats. We would like to see what happens in the industry over the next six months. I HM: Do you see high-def superseding electronic sellthrough? CLASSIFIED SHOWCASE CLASSIFIED ADVERTISING MAKES DOLLARS AND SENSE! Drinkwater: I wish we had the power. But we don’t. We have some pretty strong content partners, and we hope to advise them and help navigate them through this dynamic environment. However, we don’t have the clout within the industry to drive that strategy. I HM: Has Blockbuster Inc.’s new CEO or its acquisition of Movielink changed the relationship regarding their exclusive rentals of TWC titles distributed by Genius? Drinkwater: HD will become more of a commercial business faster than digital at least in the short term. The industry has a long way to provide a meaningful incentive for the consumer to move to the next-generation format. P E O P LE I REDBOX HIRES TWO DVD rental kiosk operator Redbox has announced two new appointments to its team. Scott Goldberg comes on as VP of purchasing, and Trina Graham-Hodo is the director of customer service. Previously Goldberg was an analyst and merchandise planner for the Zale Corp. in Dallas. Before that he worked as director of merchandising, planning and analysis for Blockbuster. Graham-Hodo has worked in customer service, operations, sales and marketing for U.S. Cellular, Comcast and SBC/Ameritech. – Chris Tribbey Drinkwater: Everything is going as it was before. I HM: Will there be an increase in TWC titles and Genius fare available on the Movielink download service? Drinkwater: We were already dealing with Movielink. We hope this will enhance that relationship. We have a strong relationship with Blockbuster, and we’re working with them on a lot of initiatives. I HM: In the analyst call, you mentioned a greater push to electronic distribution. Will you also distribute content through third-party sites or a proprietary system? I ANIME EXPO GETS NEW CEO The Society for the Promotion of Japanese Animation (SPJA), the organization that puts on the annual Anime Expo confab in Anaheim, has a new CEO. Current SPJA CFO Trulee Karahashi has accepted the CEO role. Karahashi is a University of California, Berkeley graduate and has worked in both the domestic and Japanese anime businesses for many years. – Chris Tribbey FOR ADDITIONAL INFORMATION CONTACT: Kurt Wohlman (714) 338-6749 kwohlman@questex.com www.homemediamagazine.com Drinkwater: No, we are very retail-centric. Whenever possible we will partner with retailers. We are not looking necessarily to go direct-to-consumer. We just recently bought Castalian, which is a direct-response company. That is mainly because some of our content providers are in the direct-response busi- 36 Home Media Magazine August 19–25, 2007 http://www.homemediamagazine.com http://www.homemediamagazine.com

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Contents News News/Box Office News TV DVD Q4 Preview Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - August 19-25, 2007

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