Home Media Magazine - October 19-25, 2008 - (Page 24) NEWS Continued from page 1 Continued from page 1 www.homemediamagazine.com Redbox Claims Uni Is Forcing Unfair Terms Target Drops BD Player Prices would prohibit Universal from limiting the number of its DVDs in Redbox kiosks. The kiosk company also is asking for damages and a declaration of copyright misuse, as well as a declaration that the revenue-sharing agreement violates antitrust law. The suit stems from an Aug. 26, 2008, visit to Redbox’s Oakbrook Terrace, Ill., headquarters by Universal VPs Jamie Guzzaldo and Dick Longwell. Redbox COO Mitch Lowe and other Redbox staff were shown a copy of Universal’s revenue-sharing agreement and were told Redbox had until the end of the following day to sign the agreement, the suit reads. “During the meeting, [Universal Studios Home Entertainment] said that if Redbox refused to sign the revenue-sharing agreement and the distributors continued to supply Universal DVDs to Redbox, USHE would stop selling any Universal DVDs to VPD and Ingram,” the suit reads. Redbox purchases nearly all of its Universal product from VPD and Ingram, accounting for 15% of the total product the two supply to the kiosk operator, Redbox said. Redbox also has DVD buy-back clauses with both distributors. Redbox said Universal will “compel Ingram and VPD to stop shipping Universal DVDs to Redbox effective Dec. 1 …” if the kiosk operator doesn’t sign the agreement. The agreement, if Redbox signs it, would limit the number of copies of a new Universal DVD to eight, with the amount tied to the gross box office revenue of the film. Redbox kiosks currently hold as many as 45 copies of a new release, and the company said that more than 60% of rental demand for a title occurs within 45 days of the original street date. The agreement would also call for Redbox to “destroy 100% of the units removed from an active rental machine,” instead of selling them used. Redbox currently sells used DVDs for $7 beginning a dozen days after the street date. “The revenue-sharing agreement will have the effect of restricting output, eliminating competition in the rental and sales markets and raising prices to consumers,” the suit contends. A spokesperson for Universal said he had not seen the suit and that the studio will not comment on pending litigation. Representatives from Ingram were not available at press time, and a spokesperson for VPD said she was not aware of the suit. A spokesperson for Redbox said the company had no additional comment. However, she did say that Redbox “has not been contacted by other studios looking to change their distribution terms similar to Universal.” “Redbox is taking action against Universal Studios Home Entertainment to protect its business model and to continue to offer consumers the latest new releases — when they are released — for just $1 per night,” she said. which reportedly sells 25% of all packaged media, is exclusively offering the Olevia BD-110 Profile 1.1 (Bonus View) player for $229 — a price that rivals the proprietary Insignia brand Profile 1.1 player from Best Buy. Target also is selling the Philips BD-P7200 Profile 1.1 player for $249.99 — $100 below the suggested retail price. It also sells the Sony BD-PS350 and Samsung BDP1500 players for $299.99 each. Target spokesperson Sonia Paulson said the company earmarked Blu-ray players at separate prices to attract a wide spectrum of consumers entering the holidays. “Our vision is to provide our guests with the ultimate high-definition experience,” Paulson said. She said it was not company policy to disclose sales data for individual products. The price reductions could be a reflection of the lack of available credit due to the global economic crisis. Lower monthly limits and higher interest rates discourage consumption, which is not a good thing for consumer electronics retail entering the holiday season, analysts say. Target, which generated $460 million in Target credit card finance charges and late fees in the most recent quarter, also reported $260 million in card write-offs — up from $95 million Universal Is DreamWorks’ New Partner Continued from page 1 superb team,” said Jeff Zucker, president and CEO of NBC Universal. The deal ends a two-year relationship with Paramount, and brings DreamWorks’ properties to a familiar place (Snider was once chairwoman for Universal Pictures). Both Disney and Fox were also in the running to be DreamWorks’ new partner for distribution. A Universal spokesperson confirmed the studio’s home entertainment and digital delivery support for DreamWorks’ projects, the first of which should be released by 2010. DreamWorks will pay Universal an 8% distribution fee under the agreement. “We couldn’t be more pleased to welcome the DreamWorks team back to Universal and our long history of success together will continue,” said Ron Meyer, president and COO of Universal Studios. “As always it is an honor to do business with Steven Spielberg, one of the most prolific directors of our generation, and our longtime friend and colleague Stacey Snider, who is one of the finest film executives in our business.” David Geffen, one of the co-founders of DreamWorks SKG in 1994, helped negotiate the deal, but will not be joining Spielberg and Snider in the new venture, which is launching with the help of more than $500 million from Reliance Big Entertainment in India. “Universal has always been my home base, so this agreement starts a new chapter in what has been a long and successful association,” Spielberg said. “While it feels great to come home again, it feels like I never left, and Stacey and I look forward to working once again with our friends and colleagues, old and new.” during the previous-year period. Target reported a 3% decline in same-store sales in September. “Challenges in the current environment, including weak top-line growth in our retail segment and higher net write-off rates in our credit card segment, have increased the likelihood that our third-quarter [earnings] may be slightly lower,” Target CEO Gregg Steinhafel said in a statement. Stacey Widlitz, with Pali Research in New York, said she estimates 80% of all TVs and related consumer electronics purchases are on credit, and any pullback in monthly credit limits by card companies could spell trouble for consumer electronics retailers. Widlitz said in meetings with Best Buy that the No. 1 CE retailer told her increasing numbers of more affluent consumers were charging purchases than previously. “Maybe consumers still have an appetite for goods they cannot afford right now but are hoping by the time they have to pay off the free financing purchases, the environment [will] change,” Widlitz said. Independent analyst Rob Enderle said bleak economic headlines underscore consumers’ cautious approach to big-ticket purchases, including Bluray, and retail’s desire to cut prices. “We are likely to see several vendors purge inventory before the quarter is done,” Enderle said. L ATE FL ASHES I CHERNIN: SAG TALKS ARE GOING ‘HORRIBLY’ Peter Chernin, president and COO of News Corp., said contract negotiations between the Screen Actors Guild and Alliance of Motion Picture and Television Producers were proceeding “horribly,” and said a work stoppage by actors during the current economic climate would be more than a bad idea. Chernin, who helped broker a deal during the writers strike earlier this year, said in the keynote at TVWeek magazine’s media conference in New York that the contract offered to SAG found middle ground. “Obviously, I have a bias here, but a strike would be devastating to the creative community,” he said. SAG is seeking greater compensation from Internet distribution in addition to revamping the 20-year-old DVD residual agreement. — Erik Gruenwedel I GENIUS TO RESTATE FISCAL RESULTS Genius Products Inc., 70% owned by The Weinstein Co., said it would restate consolidated financial statements for six quarters and two fiscal-year periods. Genius said the restatements relate to financial accounting of costs associated with subsidiary DVD distributor Genius Products LLC. Heretofore, Genius limited recognition of costs to its 30% stake, excluding possible cost overruns with The Weinstein’s stake, said Anne Rakunas with financial consulting firm ICR, which handles Genius. “Just because Genius has 30% ownership of the LLC doesn’t mean its costs are limited to 30%,” Rakunas said. — Erik Gruenwedel among other cuts. The Los Angeles-based media company said the restructuring will result in the layoffs of 55 employees, according to a regulatory filing. Playboy said it would transfer the bulk of its DVD adult content, including Jenna Jameson’s “Club Jenna” brand, online. — Erik Gruenwedel Looking Up to Tim I MICROSOFT’S XBOX 360 GAINS ON PRICE CUT September sales of the Xbox 360 took off on a Microsoft price cut, according to new data from The NPD Group. The console sold 347,200 units in the month, versus 232,400 for Sony’s competing PlayStation 3. “The price reduction on the Xbox 360 helped deliver a month-over-month unit sales increase for that platform of 78%,” said NPD analyst Anita Frazier. The low-priced Wii was still the overall winner in the next-gen console war, selling 687,000 units. — Stephanie Prange I PLAYBOY OUT OF DVD Playboy Enterprises will discontinue its $2.9 million DVD production business, Warner Home Video’s Ronnee Sass joined Tim Robbins Oct. 10 on his 50th birthday when the actor was honored with a star on the Hollywood Walk of Fame. Robbins, appearing in City of Ember, stars in Warner’s The Shawshank Redemption, coming to Blu-ray Disc Dec. 2. HOME MEDIA MAGAZINE (ISSN 1934-9882) is published weekly 51 times per year (weekly except for one week at the end of 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). http://www.homemediamagazine.com
Table of Contents Feed for the Digital Edition of Home Media Magazine - October 19-25, 2008 Home Media Magazine - October 19-25, 2008 Contents News Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced Home Media Magazine - October 19-25, 2008 Home Media Magazine - October 19-25, 2008 - Home Media Magazine - October 19-25, 2008 (Page Cover1) Home Media Magazine - October 19-25, 2008 - Home Media Magazine - October 19-25, 2008 (Page Cover2) Home Media Magazine - October 19-25, 2008 - Home Media Magazine - October 19-25, 2008 (Page 1) Home Media Magazine - October 19-25, 2008 - Home Media Magazine - October 19-25, 2008 (Page 2) Home Media Magazine - October 19-25, 2008 - Contents (Page 3) Home Media Magazine - October 19-25, 2008 - News (Page 4) Home Media Magazine - October 19-25, 2008 - News (Page 5) Home Media Magazine - October 19-25, 2008 - News (Page 6) Home Media Magazine - October 19-25, 2008 - News (Page 7) Home Media Magazine - October 19-25, 2008 - News (Page 8) Home Media Magazine - October 19-25, 2008 - News (Page 9) Home Media Magazine - October 19-25, 2008 - Reviews (Page 10) Home Media Magazine - October 19-25, 2008 - Reviews (Page 11) Home Media Magazine - October 19-25, 2008 - Reviews (Page 12) Home Media Magazine - October 19-25, 2008 - Reviews (Page 13) Home Media Magazine - October 19-25, 2008 - Reviews (Page 14) Home Media Magazine - October 19-25, 2008 - Pipeline (Page 15) Home Media Magazine - October 19-25, 2008 - Pipeline (Page 16) Home Media Magazine - October 19-25, 2008 - Pipeline (Page 17) Home Media Magazine - October 19-25, 2008 - Top 20 DVD Sellers (Page 18) Home Media Magazine - October 19-25, 2008 - Top 20 Rentals and Top 10 Charts (Page 19) Home Media Magazine - October 19-25, 2008 - Top 20 Rentals and Top 10 Charts (Page 20) Home Media Magazine - October 19-25, 2008 - Top 20 Rentals and Top 10 Charts (Page 21) Home Media Magazine - October 19-25, 2008 - Just Announced (Page 22) Home Media Magazine - October 19-25, 2008 - Just Announced (Page 23) Home Media Magazine - October 19-25, 2008 - Just Announced (Page 24) Home Media Magazine - October 19-25, 2008 - Just Announced (Page Cover3) Home Media Magazine - October 19-25, 2008 - Just Announced (Page Cover4)
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