Home Media Magazine - November 4-10, 2007 - (Page 26)

NEWS Blockbuster Cuts Spending Continued from page 1 www.homemediamagazine.com same time attracted a slew of pricesensitive, heavy renting customers. “Our aggressive growth proved the competitive strength of Total Access, but it also demonstrated the cost,” he said. Keyes said Blockbuster’s goal of obtaining profitable growth includes significantly scaling back advertising and in-store marketing of Total Access. The CEO said the restructuring of Total Access includes eliminating customers who he said were not willing to pay a higher monthly price for unlimited exchanges. Total Access lost about 500,000 subscribers in the quarter, many of whom Keyes said he was happy to see go. He said the tally included about 300,000 non-paying trial subscribers. Total Access had 3.1 million subscribers at the end of the quarter. “We feel the [subscriber] moves were timely as well as prudent,” he said. Keyes said the changes don’t indicate abandoning online rental but instead allow the company “a break in the action” while assessing Total Access. The CEO said Blockbuster is attempting to shift from being purely a rental store to providing consumers with “convenient access” to entertainment, including Movielink downloads and sellthrough. He said new objectives include greater availability of new releases in stores, simplified pricing and better customer service. Stores have begun to showcase sellthrough copies of new releases along with rentals. Paramount’s Transformers sold 200,000 copies in the first week, possibly a record for the chain’s retail channel, Keyes said. “We could sell movie soundtracks, posters, as well as improving impulse snacks and beverage assortments,” he said. Finally, the CEO said Blockbuster will continue to enhance the digital channel underscored by the acquisition of Movielink. He said the site will be integrated into Blockbuster’s site with an improved user interface by the first quarter of next year. “Total Access proved to be a valuable competitive advantage for the bymail space and will be even more of an advantage as we move into a true digital-delivery concept,” Keyes said. Blockbuster plans new stores in which consumers can experiment with formats, get video games, visit a children’s area and access interactive options, among other changes. The prototypes will begin rolling out next year. Keyes said Blockbuster will focus on satisfying the needs of its 2 million daily customers who shop at physical locations and online. “That existing customer base represents one of our most valuable assets,” he said. The company has shuttered 526 stores worldwide since September 2006. Closures are on hold while management further assesses the business model, said CFO Tom Casey. Same-store rentals in the United States increased 2.3% while declining 2.8% globally. Worldwide samestores sales increased 3.5%, as online rental and game sales offset declines in domestic in-store movie rentals. Online rental revenue grew 122.4%, from $64.7 million to $143.9 million, representing 11.6% of Blockbuster’s total revenue. Global retail comps increased 28.2% due to strong game sales, particularly of Halo 3. Wal-Mart Price on HD DVD Continued from page 1 recently retailed for $300. The HD-A2 offers 720p/1080i resolution, unlike Toshiba’s third-generation players the HD-A30 ($399.99) and the HD-A35 ($499.99), which feature 1080p output. The Bentonville, Ark.-based retailer also sold HD DVD movies for $14.96 each. The special pricing was available only at retail stores and valid through the close of business Nov. 4, according to a Wal-Mart spokesperson. She didn’t believe the pricing affected the separate mail-in offer from the HD DVD Promotions Group of five free HD DVD titles with the purchase of an HD DVD player. The spokesperson said the player was among secret price reductions on five se- lect consumer electronics items. Other items included an electric FisherPrice NASCAR toy car for $144.72, a Sanyo 50-inch plasma HDTV for $998 and an Acer laptop computer for $348. Wal-Mart ignited mass consumer frenzy for standard DVD in 2003 when it bowed a sub-$40 player on Black Friday. Amazon and Circuit City last week cut their HD-A2 price to $197.99. Through last week the HD-A2 ranked in the top 25 among Amazon’s most popular consumer electronics products. Amazon sells Samsung’s BD-P1400 for $389.00, Blu-ray’s most inexpensive player on the market. Craig Kornblau, president of Universal Studios Home Entertainment and Uni- versal Pictures Digital Platforms, has stated that he believed a sub-$200 player price could be a catalyst in mass consumer adoption of high-def packaged media. Toshiba spokesperson Jodi Sally said the price cuts were retail-driven — not manufacturer-driven — and signaled an early start of a high-definition holiday shopping season. “There was no official move on our MSRP, but I’m happy to see the strong sales momentum on our players,” Sally said. “We experienced a great lift in player sales when Transformers (Paramount Home Entertainment) was released, and the strong momentum continues.” Paramount, which previously released titles on both HD DVD and Blu-ray Disc, now distributes exclusively on HD DVD. Writers in Residual Fight Continued from page 1 existing DVD rates, which the WGA has long considered antiquated. Contract talks, which included a federal mediator, broke down just hours before the midnight expiration Oct. 31, leaving the WGA open to call for a strike. A meeting on the issue was taking place at press time. A strike could result in the shutdown or delays of prime-time television programming, talk shows and related events. For more than 20 years, WGA members writing for VHS and DVD product received 1.5% of 20% of the producers’ wholesale price for each unit sold. The guild would like to up that to 1.2% of 100% of wholesale, according to the WGA. “The rate the guild is looking for is currently in existence [ for pay TV], but the producers don’t want to apply it,” said WGA spokesperson Gregg Mitchell. AMPTP president Nick Counter said in a statement to the WGA that WGA demands for increased DVD residuals continue to impede attempts to resolve multiple labor issues. Counter said pending claims regarding electronic sellthrough could be resolved through arbitration. He said a new agreement regarding residuals for DVD, including electronic sellthrough, must be paid under the existing home video formula. “We cannot move further as long as that issue remains on the table,” Counter said. “In short, the DVD issue is a complete roadblock to any further progress.” In response, the WGA said producers failed to negotiate further unless it accepted that “the hated DVD formula” be extended to digital media, including downloads. “Every issue that matters to writers, including Internet reuse, original writing for new media, DVDs and jurisdiction, has been ignored,” the WGA said in a statement. “This is completely unacceptable.” JUST ANNOUNCED A Weekly Product Update * TITLE STREET DATE PREBOOK BOX OFFICE (MILLIONS) GENRE PRICE Walgreens Ready to Burn Continued from page 1 DVDs for playback on standard DVD players. Most major studio movie DVDs are CSSprotected. Walgreens currently sells a smattering of new release movie DVDs in select markets. It subleases Redbox DVD rental kiosks in stores in Atlanta, Phoenix and Columbus, Ohio, among other areas. A Walgreens spokesperson said the Deerfield, Ill.-based company is working with Sonic Solutions, YesVideo and Polar Frog Digital, among others, to make the kiosks a reality. “This is an exciting development for us,” said spokesperson Tiffani Bruce. “This will allow us to have a virtual inventory.” Sonic recently updated its Qflix DVDburning software based on the DVD CCA changes. Polar Frog, which cut its teeth marketing DVD-burning kiosks featuring adult 3:10 To Yuma 1/8/08 12/12 $53.3 Western DVD $29.95, BD $39.99 entertainment, is reportedly responsible for securing content and assuaging studio concerns about existing retail partners. Parks Associates has reported that ondemand movie DVD revenue is expected to reach $1.3 billion by 2011. Parks Associates analyst Kurt Scherf told Reuters he expects the studios will initially offer mostly catalog titles and not new releases to the kiosks. Bruce said the kiosks will allow Walgreens to offer titles appealing to its diverse customer base. She said consumers will be able to print out box art at Walgreens’ digital photo lab. The chain hopes to bow the first kiosk in the next two months. “We can package the movie the same way we would a standard DVD,” she said. “And we can have an inventory that appeals to everybody.” Lionsgate. 2007. Russell Crowe, Christian Bale, Peter Fonda. A re-make of the 1957 Western by the same name, in which a rancher takes a captured outlaw to a neighboring town to put him on a train to prison. Death Sentence 1/8/08 12/12 $9.5 Drama DVD $29.98 Fox. 2007. Kevin Bacon, Kelly Preston, Aisha Tyler, Garrett Hedlund, John Goodman. A mild-mannered executive wages war against a violent street gang after his son is killed in a gas station robbery. Includes two “Fox Movie Channel Presents” shows and a series of webisodes. 2 Days in Paris 2/5/08 1/9/08 $4.3 Comedy DVD $27.98 Fox. 2007. Julie Delpy, Adam Goldberg. An anxious New Yorker visits his girlfriend’s home in France, and their love is tested by culture shock. Includes extended scenes and an interview with Delpy, who also wrote and directed the film.Ï Sunshine 1/8/08 12/12 $3.7 Sci-fi DVD $29.98, BD $39.98 Fox. 2007. Cillian Murphy, Chris Evans, Michelle Yeoh, Rose Byrne. In the year 2057, a crew of men and women hope to save Earth by igniting the dying sun with a nuclear weapon. Includes audio commentaries, deleted scenes, two short films and Web production diaries. Joshua 1/8/08 12/12 $0.5 Thriller DVD $27.98 Fox. 2007. Sam Rockwell, Vera Farmiga, Celia Weston, Dallas Roberts, Michael McKean, Jacob Kogan. A young Manhattan couple, expecting a second baby, beg http://www.homemediamagazine.com

Table of Contents Feed for the Digital Edition of Home Media Magazine - November 4-10, 2007

Home Media Magazine - November 4-10, 2007 Contents News In Focus News News TV DVD Indie Film Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - November 4-10, 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.