Home Media Magazine - November 11-17, 2007 - (Page 40) NEWS www.homemediamagazine.com operating income of $362 million, up 51% from $239 million last year. Filmed-entertainment revenue topped $1.5 billion, compared to $1.2 billion last year. Worldwide DVD sales of Eragon and Night at the Museum, in addition to Little Miss Sunshine on pay-perview, contributed to the results. Live Free or Die Hard has grossed more than $375 million in global theatrical revenue since its opening July 1, while The Simpsons Movie grossed more than $524 million since its release July 29. The results did not include ad revenue from “American Idol,” whose juggernaut status among marketers is expected to pay dividends later in the fiscal year. Total revenue, which includes television, cable, satellite, magazines, newspapers, and book publishing, topped $7 billion, compared to $5.9 billion last year. Chernin Says Writers Strike Will Be Good for Fox in Short Term By Erik Gruenwedel SUPPLIER As the writers’ strike ended its first week, News Corp. president and COO Peter Chernin said the work stoppage would be good economically in the short term for the company’s Fox Television properties. In a call with analysts, Chernin said an ongoing strike in fiscal 2008 would save the company in term deals, story costs and lack of TV pilot productions. He said Fox’s sports programming would benefit as well if the competition started airing significant repeat programming. “We save more money [not producing content] … than we lose in potential advertisers,” Chernin said. The COO said a prolonged strike Prepping for Christmas would result in a significant growth in market share for the Fox Broadcasting Network. He said much of Fox’s animation programming was created a year prior to broadcast. Chernin said Fox is better positioned for a strike than rival networks. He said with “American Idol” still to premiere, coupled with an array of reality programming, Fox can broadcast original programming virtually every night of the week for the remainder of this season. “We expect [a strike] would help us win this ratings season by an even greater margin than we expect,” Chernin said. The COO said it was frustrating to learn that “a pretty constructive day of negotiations [Nov. 4]” resulted in writers striking anyway. “I think there is a deal to be done, and I think it is particularly frustrating that we can’t seem to get there,” he said. “A strike longer than eight months would begin to negatively affect all aspects of Fox. I sure hope it doesn’t go that long.” Despite strong TV DVD sales of “Family Guy” and “Prison Break” and global box office returns of The Simpsons Movie and Live Free or Die Hard, News Corp. posted first-quarter (ended Sept. 30) income of $732 million, down 13% from $843 million during the same period last year. Filmed entertainment, which includes 20th Century Fox Home Entertainment, reported consolidated Santa Claus is flanked by Louise Fletcher (left) and Maxwell Perry Cotton, two stars of Warner Premiere’s first holiday title, A Dennis the Menace Christmas, distributed by Warner Home Video. The studio hosted a reception and screening at its lot last week for the film. Photo by: Tiffany Koury/Berliner Studio/BEImages Dennis the Menace is used by permission of Hank Ketcham and copyright North America Syndicate Writers Want to Have New Residuals Rate Continued from page 1 “The [networks and studios] said [Nov. 4], as long as the DVD residuals were still on the table, they wouldn’t talk to us,” Wallace said. “Forty-eight percent of writers [in the guild] are unemployed at any one time. How do you eat when you’re not working? Residuals, buddy.” AMPTP president Nick Counter said producers attempted to meet the WGA demands on Internet streaming and jurisdiction in new media but were rebuffed. He seemed particularly miffed the WGA East began strikes in New York while negotiations were ongoing with the WGA West in Los Angeles. “It is unfortunate they chose to take this irresponsible action,” Counter said in a statement. The WGA responded that despite withdrawing its revamped DVD residual proposal, the AMPTP refused to discuss jurisdiction on new media and insisted that residual compensation for Web downloads be paid at the current DVD rate, which the WGA has long considered antiquated. For more than 20 years, WGA members writing for VHS and DVD have received 1.5% of 20% of the producers’ wholesale price for each unit sold. L AT E F LA SHE S I CINRAM 3Q PROFIT UP DESPITE DVD PRICE CUTS Toronto-based replication company Cinram International Income Fund reported DVD revenue fell 5%, to $226 million, despite a 3% increase in disc production. CD production fell 14%. Revenue from high-definition disc replication increased to $5.2 million, compared to $1.6 million last year. The company posted third-quarter income of $34.8 million, compared to income of $15.3 million during the same period last year. Overall revenue topped $485 million, compared to $477 million last year. — Erik Gruenwedel I PS2 GETS A NEW LOOK Sony Computer Entertainment is releasing a new, redesigned PlayStation 2 Nov. 22 in Japan. The new model will be the same size as the thin PS2, but is lighter and features a built-in AC adaptor. It will retain the $140 price, at least for this year. Sony has said this new PS2 will be released in Europe in early 2008. While there has been no official word, online reports peg Q1 2008 for the new PS2 model to reach North America. A number of reports suggest Sony may reduce the price of its hardware to $99 with the redesign. — John Gaudiosi Citing WGA figures and its own research, the Los Angeles Times reported that writers in 2006 earned 5 cents from the sale of a $19 DVD while the studios took $9; retailers $5; production and shipping $4.55; and other unions, 40 cents. The guild would like to up that to 1.2% of 100% of wholesale, according to a WGA spokesperson. “The rate the guild is looking for is currently in existence [for pay TV], but the producers don’t want to apply it,” said spokesperson Gregg Mitchell. Writers collectively earned $264 million in fees in 2006, which included $70.8 million in domestic cable and foreign TV; $63.3 million in network syndication; $56.6 million in videos and DVD; $38.9 million in pay-TV and $34.8 million in other programming. That’s according to the WGA and the Los Angeles Times. Male and female TV writers earned slightly more than $94,000 in average salaries in 2005. Male film writers earned $90,000, while female film writers earned $50,000. AMPTP president Counter said the WGA demands for increased DVD residuals continue to impede attempts to resolve other labor issues. He said any new agreement regarding residuals for DVD and electronic delivery would have to be paid under the existing home video formula. The AMPTP claims the home video residual formula is “falsely maligned” and does not constitute a discounted formula. The organization claims that a writer earns an additional $64,800 in residual income based on a standard 1 million-unit sale of a movie DVD. It says incremental compensation increases to $324,000 on sales of 5 million units and $648,000 on sales of 10 million units. “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.” The WGA stated producers failed to negotiate further unless its members accepted “the hated DVD formula” and extended it to digital media, including downloads. “Every issue that matters to writers, including Internet reuse, writing for new media, DVDs and jurisdiction, has been ignored,” the WGA said in a statement. “This is completely unacceptable.” Wallace said writers believe that contrary to what producers claim, the Internet has become a huge revenue source for the studios and networks. “I went to ABC.com to see an episode of ‘Grey’s Anatomy’ and saw six commercials,” Wallace said. “They’re saying [Internet video] is just promotional, and it’s not true. If we can’t even get 8 cents [per DVD], that tells us they’re just trying to bust the union. We’ll be here as long as it takes.” Chris Tribbey contributed to this story. October Share Continued from page 1 20th Century Fox Home Entertainment, with a 15.5% share of the DVD sales business, followed by Warner Home Video, which together with HBO Video and New Line Home Entertainment accounted for 14.5% of the business. Fox got the month off to a strong start with Fantastic Four: Rise of the Silver Surfer, which topped the weekly sales chart its first week in stores. The studio also realized strong sales action with season five of “Family Guy” and such titles as 28 Weeks Later and Wrong Turn 2. The three Warner-distributed labels, meanwhile, did well with a variety of non-marquee titles, from the horror sleeper The Reaping to the final installment of “The Sopranos” episodes. Walt Disney Studios Home Entertainment finished fourth in the October market share derby, with 13.6% of the DVD sales business, while Sony Pictures Home Entertainment and Universal Studios Home Entertainment were fifth and sixth with 10.7% and 9.1%, respectively. Lionsgate had 4% of the October DVD sales business, according to raw Nielsen data. Editor’s note: This is the first in a series of monthly breakdowns of DVD sales based on raw Nielsen VideoScan data. HOME MEDIA MAGAZINE (ISSN 1934-9882) is published 51 times per year (weekly except 3 issues in December) by Questex Media Group, Inc., 306 West Michigan Street, Suite 200, Duluth, MN 55802. Subscription rates: $49.99 for one year in the United States and Possessions; $79.99 for one year in Canada and Mexico; all other countries $99.99 for one year (by surface mail). Add $75 annually for air-expedited service. Single copies (prepaid only): $6.99 in the United States, $8.99 in Canada and Mexico, $13.99 all other countries. 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