Home Media Magazine - August 31 - September 6, 2008 - (Page 8) NEWS BRIEFS I GALLERY CEO JOINS BOARD Former supermarket executive C.J. “Gabe” Gabriel last week joined the board of Movie Gallery, three months after being named CEO. Gabriel, who was EVP of marketing, merchandising and supply-chain management at Albertsons before joining Dothan, Ala.-based Gallery, fills the board vacancy created July 28 by the resignation of founder and former president/CEO Joe Malugen. – Erik Gruenwedel ter (ended July 31) income of $2.9 million, compared to a loss of $17.7 million during the same period last year. TiVo said gross subscriber additions topped 36,000, compared to 41,000 last year. However, the company acknowledged that competition from generic DVR devices offered by cable operators continued to erode its subscriber base. Total subs at the end of the quarter were 3.6 million, down 600,000 from last year. Revenue fell 5.4% to $53.5 million, compared to $56.5 million last year. Separately, TiVo said it teamed with Entertainment Weekly to incorporate the consumer publication’s “What to Watch” TV programming recommendations into its service. Slated to launch this fall, “Watch” will automatically record the magazine’s suggested programs for broadband-enabled subscribers. In addition, original video content from EW.com, including “Just a Minute,” “Ausiello TV,” “Idolatry” and related behind-the-scenes content will be available. – Erik Gruenwedel www.homemediamagazine.com Netflix: Faulty Hardware Caused Shipping Mishap By Erik Gruenwedel RETAIL Netflix said faulty computer hardware that supported the backend of its distribution network was the cause of a service meltdown Aug. 12 to 14 that cut off DVD shipments to onethird of its 8.4 million subscribers. Media speculation had suggested that a database upgrade went haywire, resulting in a breakdown among Netflix’s 55 distribution centers nationwide. I BORDERS CUTS Q2 LOSS Borders Group reported a secondquarter (ended Aug. 2) loss of $11.3 million, compared to a loss of $18.1 million during the same period last year. At U.S. Borders superstores, comparable store sales decreased 8.9% compared to the same quarter last year. Losses were attributed to the continuing decline of music sales as well as the lack of a “Harry Potter” book — Harry Potter and the Deathly Hollows was released July 21, 2007, during the second quarter last year. – Billy Gil “We’ve taken steps to fortify our shipping system with the acquisition of additional equipment and worked with our vendors to verify we’re in good shape elsewhere,” Mike Osier, chief technology officer, said in a statement on the Los Gatos, Calif.-based service’s Web site. Raghu Srinivasan, who operates Feedflix.com, a third-party site that allows Netflix subscribers to track online rental usage patterns, said he thought the disruption was initially caused by an overload of the Instant Watch streaming service. “But I think the choice of movies on there is fairly low right now,” Srinivasan said. Regardless of the cause, analyst Michael Pachter with Wedbush Morgan Securities in Los Angeles, said the mishap cost the online DVD rental pioneer $6 million in thirdquarter revenue. 3-D Takes Center Stage at Summit By John Gaudiosi AN JOSE, Calif. — Nvidia, which makes the chips that power everything from cell phones to PCs to game consoles, held its first annual NVISION 08 summit Aug.25-27, unveiling its GeForce 3-D Stereoscopic technology. Mitsubishi had its new $3,799 73-inch 3-D-ready home theater DLP TVs set up on the show floor of the San Jose Convention Center with games such as Unreal Tournament 3, Race Driver GRID and Guitar Hero 3 playing in 3-D. Any Mitsubishi DLP that shipped starting May 2007 is compatible with Nvidia’s new technology, which will be released this fall. David Naranjo, director of product development for Mitsubishi Digital Electronics America, said the company has 10 DLP TVs already on the market that will support 3-D. MGM DENIES ‘FOR SALE’ RUMOR By Erik Gruenwedel I GAMEFLY OFFERS CHANCE TO BE IN COMMERCIAL Video game rent-by-mail service GameFly is letting contestants dressed as their favorite video game characters face off for a chance to appear in a GameFly commercial. GameFly Super Fan Casting Call will hold in-person casting events, or contestants can submit videos of themselves at www.gamefly.com/superfan by Sept. 30. The winner will be decided by online viewers and will be announced Nov. 6. Additionally, new members who sign up for GameFly through the contest site will be automatically entered into a weekly cash prize drawing. – Billy Gil I DVD HELPS DRIVE ONLINE NBC OLYMPICS MERCHANDISE DVD sales of the opening ceremonies (Aug. 8) at the Beijing Summer Olympics and Michael Phelps’ recordbreaking eight gold medal performance helped NBC Universal increase online Olympics merchandise sales by 81%, compared to online sales associated with the Winter Olympics in Torino, Italy, in 2006. “People want to own a part of the games, and what better way to remember the excitement than to have a collectible pin, a DVD or a windbreaker as seen on the athletes,” said Jeffrey Rotenberg, director NBC Universal retail operations. – Erik Gruenwedel S “We foresee gaming being the first content for 3-D in the home via the PC, with 3-D movies soon afterward (through pre-packaged media or digital distribution) and then the natural progression to broadcast, cable and satellite,” Naranjo said. The Nvidia Stereoscopic technology will ship with an emitter and clear 3-D glasses. “Our glasses are compatible with pretty much everything,” said Andrew Fear, product manager for Nvidia GeForce 3-D Stereoscopic technology. “Consumers need something that is standardized and easy to use, whether that’s 3-D DVD or 3-D Blu-ray.” Hollywood is interested, Naranjo said. “Many producers and directors have publicly announced that their movies will only be mastered for 3-D,” he said. Metro-Goldwyn-Mayer Studios last week denied media reports it was on the block for $5.2 billion. The studio, which is co-owned by private equity firms TPG, Providence Equity Partners, Sony Corp. of America and Comcast, lost $400 million in its most recent fiscal year, ended March 31, according to BusinessWeek. “There is no ‘asking price’ for the company,” the studio said in a statement. “MGM’s existing financing arrangements are sufficient to meet its needs.” The studio said it had retained Goldman Sachs to “explore enhancements” to its long-term capital structure. MGM DVDs are distributed by 20th Century Fox Home Entertainment under a five-year agreement that expires in 2011. The studio is slated to regain rights to the lucrative James Bond franchise in 2009. Sony currently controls those rights. Fox spokesperson Steve Feldstein said the MGM disc titles are “rolling along” fine. SUPPLIER I BAYVIEW RELEASES BREAST CANCER DOC In recognition of Breast Cancer Awareness Month in October, BayView Entertainment Sept. 30 (prebook Sept. 9) will release for the first time on DVD the breast cancer documentary Climb Against the Odds at $24.99. This film has aired on National TV and PBS and details an annual outdoor challenge for breast cancer survivors and others impacted by the disease. BayView will contribute 75 cents of every DVD sold to breastcancerfund. org, a national organization focused on breast cancer prevention. – Billy Gil I EDC APPROVES REVERSE STOCK SPLIT Shareholders of packaged media distributor Entertainment Distribution Co. have agreed to a fiscal reorganization plan designed to keep the New York company’s stock listed on The NASDAQ Capital Market. Under the plan approved Aug. 22 at EDC’s annual meeting, shareholders exchanged 10 shares of common stock for one share of common stock of EDCI Holdings. The reverse stock split took effect Aug. 26. EDC has until Dec. 29 to maintain a minimum $1 per share stock price for 10 consecutive business days to remain listed with NASDAQ. The distributor lost $5.3 million on revenue of $79.4 million in the second quarter (ended June 30). – Erik Gruenwedel DIRECT-TO-VIDEO, FEATURE FILM RELEASE MIX SINCE INCEPTION: BY PRODUCTION PERIOD* The direct-to-video feature category began with the launch of VHS in roughly 1980. But there have been 836 DTV films released on DVD with production dates prior to that year. For martial arts films and Euro-horror flicks, many suppliers stripped out the original language tracks and supplied dubbed English versions. That’s the major source for these pre-VHS releases. Since the launch of the DVD format in 1997, there have been 10,283 DTV feature releases. Of those, 67.1% (basically two-thirds) have been produced during the lifetime of DVD (1997-2008). — Ralph Tribbey 2,699 1,212 I 1997-2008 67% 6,903 1,332 I Prior to 1980 8% I 1980-1989 12% I 1990-1996 13% * Since inception through Aug. 19, 2008. Includes discontinued titles. I RELEASE ACTIVITY FOR DVD Titles in Release Through Week Ended Aug. 22, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Net DVD Titles Announced and/or In Release Through Dec. 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . I TIVO EYES Q2 PROFIT, ‘ENTERTAINMENT WEEKLY’ PACT Increased margins on its digital video recorders and reduced operating expenses helped TiVo post second-quar- 89,236+358 90,112+348 I RELEASE ACTIVITY FOR BLU-RAY . . . . . . . . . . . . . . . .As of Week Ended Aug. 22, 2008 Released 666 Scheduled 202 Home Media Magazine August 31–September 6, 2008 http://www.homemediamagazine.com http://Feedflix.com http://EW.com http://www.gamefly.com/superfan
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