Home Media Magazine - November 23-29, 2008 - (Page 24) NEWS DVD Resilient, Trans World Financials Not By Erik Gruenwedel RETAIL Steady DVD sales coupled with the emerging Blu-ray Disc format couldn’t counter a macroeconomic reality that continues to batter retailers including Trans World Entertainment Corp. The Albany, N.Y.-based parent to 786 f.y.e. (For Your Entertainment), Suncoast and Second Spin stores said third-quarter (ended Nov. 1) DVD sales slipped 5% due largely to a 24% decline in new releases rather than economic conditions. “DVD did outperform the industry in the quarter as strong promotion and better depth of catalog helped counter the steep decline in new releases,” Jim Litwak, president and COO, said in a call with investors. “We also saw Blu-ray begin to emerge as a potential meaningful growth opportunity.” www.homemediamagazine.com Video now represents 41% of Trans World’s business, up from 38% last year. Despite video’s buoyancy, economic woes continued to impact the bottom line as Trans World reported a net loss of $28.4 million —nearly double the loss of $14.3 million during the prior-year period. Gross revenue dropped 25%, to $195.2 million, from $260.6 million in the same quarter last year, when it operated 962 stores, compared to 786 stores this quarter. Same-store sales (open at least 12 months) fell 14% from last year. “As you know, we are operating in a difficult retail environment with consumer spending down,” said Robert Higgins, chairman and CEO of Trans World. “Our performance was well below expectations.” Same-store music CD sales dropped 22% (representing 38% of the business), which was a 1% improvement from the first two quarters. “The decline is in line with the industry (new releases were down 29%) and an improvement in our performance during the first half of the year,” Litwak said. Trans World lowered its inventory levels (and related expenses) $100 million from a year ago. It also closed three stores during the quarter. Edward Woo, who covers Trans World for Wedbush Morgan Securities in Los Angeles, said the retailer’s balance sheet remained relatively solid in the short term. “I think they have at a decent chance to turn things around, but in this environment, it’s a tough challenge,” Woo said. “The silver lining is that they aren’t in bankruptcy, yet.” ‘Alphabet Killer’ Q&A (L-R): Eliza Dushku (star, associate producer) and Tom Malloy (co-star, writer, producer) participated in a Q&A session following the Nov. 14 Los Angeles screening of The Alphabet Killer. The film has limited theatrical engagements in New York and Los Angeles and will be available on DVD Jan. 6, 2009, from Anchor Bay Entertainment. Photo by: Kathy Hutchins Image Bought by Q Black Media Subsidiary Continued from page 1 L A T E FL A SH ES I GAMESTOP PROFITS DROP IN THE THIRD QUARTER Third-quarter sales for video game retailer GameStop were up, but profits were down, the company reported Nov. 20. During the three-month period ended Nov. 1, GameStop reported sales of $1.69 billion, up from $1.61 billion during the same period in 2007. Profits were at $46.7 million, down from $52 million during the same period in 2007. Video game sales increased by 10% during the quarter, the company reported, though hardware sales — Microsoft’s Xbox 360, the Sony’s PlayStation 3, Nintendo’s Wii and portable gaming devices — were down more than $45 million, compared to the same period in 2007. GameStop CEO Dan DeMatteo said video game sales over the holidays should still deliver a nice profit for the company and its shareholders. “With the economic conditions like they are, almost a headwind with flying nails … we’re both cautious and appropriately aggressive,” added executive chairman Richard Fontaine during the conference call. GameStop executives did note that while other retailers were closing stores these past few months, GameStop opened 191, 94 of those in the United States, and had acquired Micromania, France’s largest video game retailer. — Chris Tribbey vote in favor as well. At deadline, 38% of shareholders had agreed to the deal, which is expected to close in the first quarter of 2009. Nyx is a subsidiary of Q Black Media, based in San Francisco and headed by co-founder and CEO Joe Bretz. Q Black is no stranger to the film business, having partnered separately with actor Rob Schneider and Deviant Films to produce independent feature films, Image said. The company’s business portfolio also includes nightclub development, real estate and technology development units. Image, which this year began aggressively marketing cast-driven feature films, has seen its business and bottom line rise appreciably. “We have been successfully executing the business plan we put in place about a year ago and by doing so developed a strong and healthy business, which obviously kept potential suitors interested,” David Borshell, president of Image, said in a statement. Image CFO Jeffrey Framer said he believed the distributor’s management, DVD and digital distribution businesses were part of the attraction to Q Black. “The buyer likes the fact he can leverage our complete infrastructure and own the distribution waterfall,” Framer said. “It sounds like a terrific marriage.” He said Q Black would incorporate its technology expertise into Image’s Egami Media digital unit. The CFO, however, remained mindful of a previous failed $130 million merger attempt by BTP Acquisition Co. in 2007 that resulted in litigation. “We still have two months to go, but we are very thrilled,” Framer said. I MACBOOK COPY PROTECTION MIFFS CONSUMERS Software meant to discourage piracy included on new Macbooks may actually hurt sales of iTunes movies, several news outlets are reporting. The software, High-bandwidth Digital Content Protection, is included in the external display ports on the new laptops, and is meant to keep downloaded iTunes content from being illegally copied via external DVD burners or DVRs. However, numerous Macbook owners are reporting receiving a “not authorized” message when they attempt to play iTunes videos on an external display, such as a TV or desktop monitors bigger than the Macbook screens. Apple has made no statement regarding the blocking of iTunes content on larger displays. However, the response from owners of the new laptops has — Chris Tribbey been harsh. Sony Titles Not Streaming to Xbox 360 Continued from page 1 Spider-Man 2, among others, were excluded solely from the Xbox and not any other digital channels Netflix had created with LG Electronics, Samsung, TiVo and its proprietary Roku-manufactured set-top box, according to an online report by The Motley Fool. The reason, according to the report: Sony didn’t want to give consumers and gamers a reason to purchase the Xbox instead of its PlayStation 3 console heading into the pivotal holiday shopping season. A Sony Pictures Entertainment spokesperson denied that the studio was targeting Xbox. “This issue is not specific to Spider-Man 2 Xbox or any other individual platform,” said the spokesperson. “Sony Pictures is currently in discussions with the relevant parties to resolve certain licensing matters related to the distribution of its motion pictures. Given the ongoing nature of these discussions, we don’t think it is appropriate to comment further at this time.” A Microsoft representative was not available for comment. Netflix spokesperson Steve Swasey admitted there was “some truth” to the report without identifying Sony or impacted movies. He said a few hundred titles had been made temporarily unavailable for streaming on the 360 Experience, but were still available on the other devices and Netflix.com. “These titles regularly come in and out of license, and there is a natural ebb and flow to what we have licensed at any point in time,” Swasey said. “We hope [these titles] will be available for the 360 shortly.” I BLU-RAY BOOSTS DTS Q3 Entertainment technology company DTS’s third-quarter revenue was up to $13.9 million, compared to $10.7 million during the same period last year, with profits up to $2 million, compared to $840,000 during the same period in 2007. DTS CFO Melvin Flanigan said the profits were a direct result of “an impressive 67% jump” in revenue from Blu-ray during the quarter (compared to the third quarter of 2007). — Chris Tribbey HOME MEDIA MAGAZINE (ISSN 1934-9882) is published weekly 52 times per year 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. Back issues, if available: $9.99 in the U.S.; $15.99 in Canada and Mexico; $26.99 for all other countries. Include $6.50 per order plus $2 per additional copy for U.S. postage and handling. Periodicals postage paid at Duluth MN 55806 and additional mailing offices. POSTMASTER: Please send address changes to HOME MEDIA MAGAZINE, P.O. Box 1270, Skokie, IL 60076-8270. Canadian G.S.T. number: 840033278RT0001, Publications Mail Agreement Number 40017597. Printed in the U.S.A. Copyright, 2008 Questex Media Group, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including by photocopy, recording or information storage and retrieval system, without permission in writing from the publisher. HOME MEDIA MAGAZINE does not verify any claims or other information appearing in any of the advertisements contained in the publication, and cannot take any responsibility for any losses or other damages incurred by readers in reliance on such content HOME MEDIA MAGAZINE welcomes unsolicited articles, manuscripts, photographs, illustrations and other materials but cannot be held responsible for their safekeeping or return. 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Table of Contents Feed for the Digital Edition of Home Media Magazine - November 23-29, 2008 Home Media Magazine - November 23-29, 2008 Contents News High-Def News Electronic Delivery News Commentary Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced Home Media Magazine - November 23-29, 2008 Home Media Magazine - November 23-29, 2008 - Home Media Magazine - November 23-29, 2008 (Page Cover1) Home Media Magazine - November 23-29, 2008 - Home Media Magazine - November 23-29, 2008 (Page Cover2) Home Media Magazine - November 23-29, 2008 - Home Media Magazine - November 23-29, 2008 (Page 1) Home Media Magazine - November 23-29, 2008 - Home Media Magazine - November 23-29, 2008 (Page 2) Home Media Magazine - November 23-29, 2008 - Home Media Magazine - November 23-29, 2008 (Page 3) Home Media Magazine - November 23-29, 2008 - Home Media Magazine - November 23-29, 2008 (Page 4) Home Media Magazine - November 23-29, 2008 - Contents (Page 5) Home Media Magazine - November 23-29, 2008 - Contents (Page 6) Home Media Magazine - November 23-29, 2008 - Contents (Page 7) Home Media Magazine - November 23-29, 2008 - News (Page 8) Home Media Magazine - November 23-29, 2008 - News (Page 9) Home Media Magazine - November 23-29, 2008 - High-Def News (Page 10) Home Media Magazine - November 23-29, 2008 - High-Def News (Page 11) Home Media Magazine - November 23-29, 2008 - Electronic Delivery News (Page 12) Home Media Magazine - November 23-29, 2008 - Electronic Delivery News (Page 13) Home Media Magazine - November 23-29, 2008 - Commentary (Page 14) Home Media Magazine - November 23-29, 2008 - Commentary (Page 15) Home Media Magazine - November 23-29, 2008 - Reviews (Page 16) Home Media Magazine - November 23-29, 2008 - Reviews (Page 17) Home Media Magazine - November 23-29, 2008 - Pipeline (Page 18) Home Media Magazine - November 23-29, 2008 - Pipeline (Page 19) Home Media Magazine - November 23-29, 2008 - Top 20 DVD Sellers (Page 20) Home Media Magazine - November 23-29, 2008 - Top 20 Rentals and Top 10 Charts (Page 21) Home Media Magazine - November 23-29, 2008 - Just Announced (Page 22) Home Media Magazine - November 23-29, 2008 - Just Announced (Page 23) Home Media Magazine - November 23-29, 2008 - Just Announced (Page 24) Home Media Magazine - November 23-29, 2008 - Just Announced (Page Cover3) Home Media Magazine - November 23-29, 2008 - Just Announced (Page Cover4)
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