Home Media Magazine - February 9-15, 2009 - (Page 6) NEWS BRIEFS I RENTRAK DOUBLES Q1 PROFIT Favorable tax benefits and returns helped Rentrak Corp. report first-quarter (ended Dec. 31, 2008) net income of $1.2 million, compared to net income of $547,000 during the prior-year period. The Portland, Ore.-based datatracking company said its Advanced Media Information division revenue grew 20.1%, to $3.2 million, from $2.7 million the previous year. Highlights included signing Rentrak’s first satellite provider, Dish Network, and a mobile data tracking agreement with NBC Universal for the studio/ network’s video, downloads, text messaging, and game content for cell phones and other handheld devices. Rentrak’s pay-per-transaction DVD rental revenue fell 7.1%, to $19.7 million from $21.2 million, due to fewer revenue-sharing rental transactions. Total revenue topped $22.9 million, compared to $23.8 million the previous year. – Erik Gruenwedel www.homemediamagazine.com Netflix Considers Weekend Delivery Meanwhile, Post Office contemplates eliminating one delivery day By Erik Gruenwedel RENTAL Netflix has begun shipping DVD rentals from distribution centers on Saturdays in select regions despite warnings from the U.S. Postal Service that it may suspend weekend mail delivery to cut costs. CEO Reed Hastings, in a recent financial call, said the Los Gatos, Calif.-based online DVD rental pioneer would begin testing weekend shipments from its 58 distribution centers in an effort to reduce delivery times in some areas to less than one business day. MAGAZINE DUBS NETFLIX TOP DVD RENTAL SERVICE By Erik Gruenwedel MORE SUITS FILED AGAINST NETFLIX AND WAL-MART FOR ‘CONSPIRACY’ By Chris Tribbey I KOCH RENAMED E1 Koch Entertainment has been renamed E1 Entertainment Distribution. The move comes as part of a rebranding effort by the distributor’s parent company, Entertainment One, which changed its name to E1 Entertainment and adopted a new corporate logo and structure. As part of the transition, Koch’s inhouse label Koch Vision has been pulled into the E1 banner. — John Latchem Two more lawsuits have been filed against Wal-Mart and Netflix, alleging their 2005 agreement in which Wal-Mart turned over its online DVD rental business to Netflix was a “conspiracy” that aimed to build a monopoly for online DVD rentals. One suit was filed Jan. 26 in U.S. District Court in the Western District of Arkansas, on behalf of Chicago resident Marci Badgerow. Another was filed Feb. 2 in U.S. District Court for the Middle District of Louisiana, on behalf of Salvadore Christina Jr. of Baton Rouge. Both are similar to the initial suit filed Jan. 5. The suits point to a January 2005 dinner between Netflix CEO Reed Hastings and John Fleming, then-CEO of Walmart.com, in which they allegedly discussed the DVD rental business. See CONSPIRACY, Page 22 LEGAL A Consumer Reports magazine online survey released last week said Netflix’s shipment time was one reason it rated the DVD rental service No. 1. (See story at right.) “[This] will provide even faster service both for those new subscribers who sign up over the weekend and for those subscribers returning movies at the end of the week,” Hastings said. Postmaster General John Potter recently told a Senate subcommittee the nation’s mail carrier was considering eliminating a day (including possibly Tuesday) from its six-day delivery schedule after posting a $2.8 billion deficit in 2008. Potter said steady declines in mail shipments coupled with rising costs could balloon the deficit to $6 billion in the current fiscal year without the delivery reduction. If the United States Postal Service decides to go forward with five-day mail delivery, Netflix is ready, said chief content officer Ted Sarandos. Speaking at the Future of Packaged Media conference in Los Angeles, Sarandos said the company has more than 100 distribution centers, and would be prepared should mail service be reduced by one day. “If you look back in history, [the postal service talks] about these things a lot, but then they get their budget allocation and everything works out,” Sarandos said. “It’s one of those things you have to follow, that you can’t control.” Senior Reporter Chris Tribbey contributed to this report. Less than a week after posting recession-proof financials, Netflix Inc. received more kudos when Consumer Reports magazine Feb. 2 rated the online DVD rental pioneer No. 1 among home video viewing options. In a survey of its online subscribers to be published in its March issue, Consumer Reports said Netflix had the highest-rated consumer satisfaction for price, selection and service. The DVD service beat rival Blockbuster’s in-store and online rental options, in addition to third-party in-store kiosks, walkin-stores and chain stores. Netflix was also considered a superior rental option over video-on-demand, including cable VOD. Survey respondents considered Blockbuster Online and Total Access (online rental, in-store return) more-costly options, despite the Dallas-based DVD rental service’s offer of $3.99 per month plan, which is cheaper than Netflix’s lowestpriced plan. Respondents apparently ignored that Netflix charges Blu-ray Disc subscribers a $1 premium per month, compared to Blockbuster, which does not charge extra for Blu-ray. When it came to rental kiosks, respondents said the attractive $1 per night rental See NETFLIX, Page 22 RENTAL Image Ups Guidance, Merger in Doubt By Erik Gruenwedel SUPPLIER Image Entertainment projects third-quarter (ended Dec. 30, 2008) revenue will exceed $38 million, up 39% from the prior-year period, as its merger is in doubt. The distributor also made a scheduled $4 million principal bond payment on its senior convertible note, lowering the outstanding balance from $17 million to $13 million. Image revised upward its annual net revenue guidance for fiscal 2009 to a range of $128 million to $131 million, compared to previous guidance of $120 million to $130 million. 30 YEARS OF NEWS I THE BOSS CALLS WALMART EXCLUSIVE ‘MISTAKE’ Bruce Springsteen told The New York Times that he made a mistake agreeing to have his greatest hits album distributed exclusively through Wal-Mart. “It was a mistake. Our batting average is usually very good, but we missed that one. Fans will call you on that stuff, as it should be,” he told the Times. According to the Times story, the “mistake” didn’t deal with sales, but with Wal-Mart’s labor practices. “Millions of Springsteen fans have counted on Wal-Mart over the years to deliver his music into their lives, and we will continue to offer those fans this ‘Greatest Hits’ exclusive and his other popular albums at unbeatable prices,” Wal-Mart said in a statement. “We are proud of the good jobs, benefits and career opportunities we provide to more than 1.4 million U.S. associates who choose to work at Wal-Mart and serve our customers every day.” – Chris Tribbey The distributor announced its pending purchase by Nyx Acquisitions appeared in doubt after the private equity group failed to deliver the remainder of a $1.8 million business interruption fee by the Jan. 20 deadline. Nyx last November entered into a $100 million cash merger agreement with Image. Nyx is a subsidiary of Q Black Media based in San Francisco. Upon entering into the agreement, Nyx made an initial deposit of $500,000 into a trust account as a down payment of the business interruption fee. Image formally notified Nyx Jan. 29 that it was in non-compliance with the merger agreement. “We are very disappointed that Nyx has not complied with its obligation under the merger agreement and what this reflects regarding Nyx’s ability to close the deal,” said an Image spokesperson. Should Nyx deliver the outstanding $1.3 million and prove it could finance the acquisition, Image said it would no longer consider the equity group in breach of the merger agreement. Representatives from Nyx and Q Black Media were not immediately available for comment. FEBRUARY I 1982 VSDA Board Holds First Meeting Back in 1982 video rental was on the rise, with two competing formats, VHS and Betamax, vying for consumer attention and sellthrough on the cusp of taking off. On the heels of such development, a group of video retailer representatives first decided to meet in November 1981 in Niles, Ill., to discuss the formation of a permanent national video software dealers trade association. They indeed decided to form a group, the Video Software Dealers Association, or VSDA, which later became the Entertainment Merchants Association. The VSDA was officially formed in January 1982 and in February, the VSDA held its first board meeting in Los Angeles. The VSDA “arose because of the need for video retailers to work together to protect and advance the nascent video rental industry,” Bo Andersen, president and CEO of EMA, recently said. “As business models, retailers, policy issues and even formats changed, VSDA evolved with them.” – Billy Gil Ruling: SAG Dissidents Can’t Reinstate Allen By Erik Gruenwedel os Angeles Superior Court Judge James Chalfant Feb. 5 denied a request by dissident board members from the Screen Actors Guild (SAG) headed by president Alan Rosenberg for a temporary restraining order seeking to reinstate chief L negotiator Doug Allen. The order would have invalidated the SAG national board majority’s written assent of Jan. 26 that resulted in the termination of Allen. Judge James Chalfant denied the order on the grounds that the plaintiffs had no probability of success on the merits of their claims, according to a statement released by SAG. As a result, the SAG national board of directors Feb. 7 will meet jointly with representatives from the Alliance of Motion Picture and Television Producers, the union representing studios, to discuss a new contract. “I’m pleased that we can put this See SAG, Page 22 Home Media Magazine February 9–15, 2009 http://www.homemediamagazine.com http://www.Walmart.com
Table of Contents Feed for the Digital Edition of Home Media Magazine - February 9-15, 2009 Home Media Magazine - February 9-15, 2009 Contents News Family Cine Mercado Reviews Pipeline Research Top 20 Sellers Top 20 Rentals and Top 10 Charts Just Announced Home Media Magazine - February 9-15, 2009 Home Media Magazine - February 9-15, 2009 - Home Media Magazine - February 9-15, 2009 (Page Cover1) Home Media Magazine - February 9-15, 2009 - Home Media Magazine - February 9-15, 2009 (Page Cover2) Home Media Magazine - February 9-15, 2009 - Home Media Magazine - February 9-15, 2009 (Page 1) Home Media Magazine - February 9-15, 2009 - Home Media Magazine - February 9-15, 2009 (Page 2) Home Media Magazine - February 9-15, 2009 - Home Media Magazine - February 9-15, 2009 (Page 3) Home Media Magazine - February 9-15, 2009 - Home Media Magazine - February 9-15, 2009 (Page 4) Home Media Magazine - February 9-15, 2009 - Contents (Page 5) Home Media Magazine - February 9-15, 2009 - News (Page 6) Home Media Magazine - February 9-15, 2009 - News (Page 7) Home Media Magazine - February 9-15, 2009 - News (Page 8) Home Media Magazine - February 9-15, 2009 - News (Page 9) Home Media Magazine - February 9-15, 2009 - Family (Page 10) Home Media Magazine - February 9-15, 2009 - Family (Page 11) Home Media Magazine - February 9-15, 2009 - Cine Mercado (Page 12) Home Media Magazine - February 9-15, 2009 - Cine Mercado (Page 13) Home Media Magazine - February 9-15, 2009 - Reviews (Page 14) Home Media Magazine - February 9-15, 2009 - Reviews (Page 15) Home Media Magazine - February 9-15, 2009 - Reviews (Page 16) Home Media Magazine - February 9-15, 2009 - Reviews (Page 17) Home Media Magazine - February 9-15, 2009 - Pipeline (Page 18) Home Media Magazine - February 9-15, 2009 - Pipeline (Page 19) Home Media Magazine - February 9-15, 2009 - Top 20 Sellers (Page 20) Home Media Magazine - February 9-15, 2009 - Top 20 Rentals and Top 10 Charts (Page 21) Home Media Magazine - February 9-15, 2009 - Top 20 Rentals and Top 10 Charts (Page 22) Home Media Magazine - February 9-15, 2009 - Just Announced (Page 23) Home Media Magazine - February 9-15, 2009 - Just Announced (Page 24) Home Media Magazine - February 9-15, 2009 - Just Announced (Page Cover3) Home Media Magazine - February 9-15, 2009 - Just Announced (Page Cover4)
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