Home Media Magazine - July 6-12, 2008 - (Page 20)

NEWS Gallery Is Focusing on In-Store Customers Continued from page 1 www.homemediamagazine.com for us. We clearly see the advantages of comes down to margin mix that difbeing in that area, but we are focused ferent [distribution] channels provide ruptcy protection, it wants to put one foot on a different path to get there. to the studios (rental, retail, catalog forward at a time. I HM: Was it a mistake to acquire Mov- or Blu-ray) … If you can improve the Mityas: At the core, we are a retailer. ieBeam? portfolio of the margin mix rather And folks still want to come to a Mityas: I believe it was premature. But than focus on any one area, such retail store, have a shopping experi- again, [digital] is something we under- as VOD, there are opportunities to ence and peruse the titles. stand the value of. But we have a differ- continue to be solid partners. I HM: What are your core assets? ent plan in mind how to get there. I HM: What is Movie Gallery’s biggest Mityas: Our rural locations in small- I HM: What do you say to the studios asset to studios? er communities catering to relatively that want to circumvent traditional rental Mityas: Our No. 1 strength is remainunderserved consumers. We are al- with same-day cable VOD? Essentially, they ing connected to millions of customso focused on moving forward a very want to put you out of business while at the ers in rural and urban locations … in coordinated event and merchandis- same time provide you with content. markets that are underserved espeing plan for our stores that will create Mityas: We have a lot of respect for cially from a VOD perspective. more of a movie theater-like experi- our studio partners. I know they un- I HM: Was acquiring Hollywood Video ence. This will include the sights, derstand the economics of the movie a mistake? business very well and understand Mityas: At the time there was a great «WE THINK BLU-RAY IS VERY the value of the rental and retail deal of synergy that was viewed by all business to them. We can be joint parties. In hindsight, to go back and IMPORTANT FOR THE partners in helping them achieve review what is good and what is bad WHOLE INDUSTRY.» [profitability]. At the end of the day, is pointless. It is what it is. Now, we SHERIF MITYAS, studios understand the value of the have 3,300 great stores. We are goMOVIE GALLERY COO AND PRESIDENT OF RETAIL OPERATIONS different distribution channels and ing to focus on moving forward. they understand the value and prof- I HM: What changes do you want to smells [of popcorn] and sounds of itability of the release schedules. implement in the first few months? going to the movies. We will create In the foreseeable future, given the Mityas: We need to instill a greater more of that experiential shop for Blu-ray conversion many of them focus on our customers. One of the our customers that they can’t get by are focused on, we will continue to key messages I have been sending sitting at their computer or going to be solid partners with them. out to our 30,000-plus employees a kiosk at the grocery store. I HM: Sounds like you think the studios is that we are going to start caring I HM: Will there be a redesign of stores? need Gallery, Blockbuster and others to get more. … Second, we will be much Mityas: Absolutely. We are going to the word out about Blu-ray? more focused on our events and reformat a number of our stores to be Mityas: I think there are clearly some merchandising in our stores. And much more of a movie experience. synergistic opportunities for the stu- finally, we are going to be focused on I HM: Do games play an important part dios and rental/retail organizations creating more synergies between the in the Gallery renaissance? in Blu-ray and the broader catalog brands (Gallery, Hollywood Video Mityas: We have a great brand in Game business as well. and Game Crazy) to leverage the Crazy, one that we will continue to I HM: Blockbuster CEO Jim Keyes be- power we have across our customer leverage not only alongside our movie lieves rental can offer the studios greater base across all three areas. business but as a standalone concept. margins of a larger pie compared to larger …Unless you create an experience I HM: You had MovieBeam, then shut- margins of a smaller pie via video-on-de- and delight customers every time they tered it and sold it for scrap. Will Gallery re- mand. Do you agree? are in your store, you are going to lose pursue a streaming or download strategy? Mityas: Jim is correct. The issue all them. Mityas: We are going to be cautious how we get into that. MovieBeam was P E O P LE not the right avenue at the right time It’s an opportunity for us as a retail organization to become the destination for movie and game fans in whatever way they want to shop and buy or rent their products. We will be focused on all areas of movie and game products, including game hardware. I HM: Do you see Gallery pursuing consumer electronics retailers similarly to what Blockbuster did with Circuit City? Mityas: No, not all. We believe there is an opportunity to really focus on a singular shopping experience. Folks coming in on the weekend may not I HM: Is the rental option for Blu-ray a want that big screen TV, but we good catalyst for wider adoption? know they want movies. Mityas: Absolutely. We are going to be I HM: Can the traditional rental store very aggressive in getting our customsurvive without pursuing sellthrough of ers to try Blu-ray. In certain markets related products? we are going to be the low-cost Blu-ray Mityas: We think sellthrough of provider from a rental perspective to DVD movies is very important. As generate penetration coming into the you see more consumers building important holiday season. their own home libraries … in light I HM: Will there be any education for of the price of going out, with fuel consumers about what Blu-ray brings to and with everything else … we think the home entertainment experience? it is going to be a very important part Mityas: Yes. What we want to give of our business going forward. our customers in-store is a direct I HM: How important is high-definition comparison between standard DVD Blu-ray Disc to Gallery? and Blu-ray. Mityas: As the migration to Blu-ray I HM: Is Gallery pursuing a rental kiosk occurs, we believe that will even fur- strategy both in-store and/or through third ther increase the sellthrough portion parties such as Redbox? of the business. Mityas: Our strategy right now is reI HM: Are you working with any of the ally focused in-store. We may pursue studios or consumer electronics companies kiosk opportunities that extend the to offer point-of-purchase or educational hours of our stores. But we have 3,300 kiosks for Blu-ray in the stores? stores we need to focus on first. Mityas: Yes, we are, but I would rath- I HM: Is Gallery pursuing an online byer not elaborate at this time. I can as- mail rental strategy? sure you that we will be heavily vested Mityas: We are always looking at ways and have a broad presentation of our to improve our e-commerce capability. Blu-ray bundles and retail packages You will see more to come on that. going forward. And that involves op- I HM: It appears, as Gallery exits bank- portunities with both studios and consumer electronics companies. We think Blu-ray is very important for the whole industry. If you look at the conversion that occurred from VHS to DVD and you look at a similar conversion as the penetration of Bluray players continues to increase, in the upcoming holiday season, we believe it will be a hot gift. As consumers experience the difference [from standard DVD], we believe it will drive in-store rental and sellthrough of Blu-ray that is not possible today from an online perspective. AMPTP: No New DVD Terms Continued from page 1 previously reached between the AMPTP and the Directors Guild of America (DGA), Writers Guild of America (WGA) and American Federation of Television and Radio Artists (AFTRA). Producers say their offer includes “groundbreaking” terms and residuals for all forms of new media, as well as “significant” increases in daily minimums, reruns, guest stars, pension and health care for working actors in TV and feature films. Specifically, the new media proposals would establish undisclosed residuals for streaming TV programs and features, in addition to establishing jurisdiction and residuals for derivative and original new media programs. The agreement would double the current residual rate for permanent downloads and provide performers’ consent over nonpromotional uses of online clips. Revisions to the current DVD residual rate — a source of considerable consternation among SAG leaders — remained unchanged, which is on par with settlements reached with the other guilds. The current DVD residual rate pays 3% for TV and 3.6% (movies) of the distributor’s gross receipts. “This [AMPTP] offer does not appear to address some key issues important to actors,” Doug Allen, SAG national executive director and chief negotiator, said in a statement. “For example, the impact of foregoing residuals for all made-for-new-media productions is incalculable and would mean the beginning of the end of residuals.” The producers responded by alleging that a strike would be due to “the unwillingness” of SAG leadership to make a deal. “SAG members will lose $2.5 million each and every day in wages,” AMPTP said in a statement. “The other guilds and unions would lose $13.5 million each day in wages, and the California economy will be harmed at the rate of $23 million each and every day.” SAG negotiators and staff said they will further analyze the AMPTP’s responses over the next several days to prepare a response to management’s proposal. I SONY UPS DALY TO VP OF SALES RESEARCH Sony Pictures Home Entertainment has upped Eric Daly to VP of sales research. He will report to Jason Spivak, SVP of strategic development. Before Daly working at Sony Pictures, Daly served as senior manager of forecas http://www.homemediamagazine.com

Table of Contents Feed for the Digital Edition of Home Media Magazine - July 6-12, 2008

Home Media Magazine - July 6-12, 2008 Contents News TV DVD Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - July 6-12, 2008

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