Home Media Magazine - July 13-19, 2008 - (Page 4)

NEWS By Erik Gruenwedel ollywood got hit with a strike last week that had nothing to do with labor. In a series of research notes, Anthony DiClemente, media analyst with Lehman Brothers in New York, significantly downgraded fiscal earnings per share estimates for CBS Corp., News Corp., The Walt Disney Co. and Time Warner Inc. — citing emerging threats of digital distribution, digital video recorders and falling adrevenue, among other issues. He said “digital is too disruptive for movies/TV.” “We believe the feature film and television content business is on the verge of structural changes that appear destined to have a direct impact on the core revenue and profits of entertainment business models,” DiClemente said. “Content may no longer be king in the entertainment business.” The analyst said legal and illegal downloads that radically altered the music industry could materially disrupt the core economic models of film and TV studios. The report said the apparent rate of decline in DVD sales was outpacing most discernable growth by digital. Edward Woo, media analyst with Wedbush Morgan Securities in Los Angeles, said concerns in Hollywood about following the downward spiral of the music industry are not new. He said the proliferation of pirated www.homemediamagazine.com Study: Young Viewers Analysts Note Digital, Piracy Threat Still Like DVDs By Erik Gruenwedel RESEARCH Despite their reputation for turning to the Internet for entertainment, the vast majority of Generation Y and X consumers still purchase and rent DVDs, according to a new report. Among consumers ages 13 to 29 (Gen Y) and ages 30 to 43 (Gen X), 98% still consider themselves foremost DVD users, according to the online poll conducted by Knowledge Networks, a Menlo Park, Calif.-based research company. The study found that 71% of Gen X respondents bought DVDs monthly, compared to 67% for Gen Y and 51% for baby boomers. Gen Y respondents rented slightly more DVDs monthly (67%) than Gen X (65%) respondents and boomers (44%). Still, the Gen X and Y demos are avid Internet entertainment consumers. The poll found that Gen Y (37%) and Gen X (18%) respondents sought more video downloads from the Web than young baby boomers (ages 44 to 54) at 11%. About 52% of Gen Y respondents streamed video, compared to 37% for Gen X and 21% for young boomers. Nearly 84% of all respondents expect to be able to watch video on the device of their choice. Among all demographics, the monthly amount spent on videorelated content was $31, which included about $13 for TV services, $13 for buying and renting DVDs and less than $5 for electronic distribution. “DVDs [remain] the bread and butter of content providers,” said David Tice, VP and group account director at Knowledge Networks. Gen Y led all demographics regarding monthly cell phone video usage at 10%, compared to 2% for Gen X and boomers. H movies available online poses an even greater threat to revenue. “I think things can get rough if they don’t find a solution to piracy, which should be the bigger threat than the DVR,” Woo said. Rob Enderle, independent media analyst with The Enderle Group in San Jose, Calif., recalled similar concerns when the VCR emerged. “Change brings with it opportunities and risks,” Enderle said. Enderle said the market is expanding and digital distribution eventually will benefit the studios. When this benefit becomes reality will depend mostly on how quickly the studios learn to monetize the increased services they will be providing. Meanwhile, illegal copying of prerecorded DVDs (primarily TV programming) increased 8% in the first six months of 2008, according to a new report. In an online survey of more than 5,000 consumers from the United States and the United Kingdom, 33% of respondents (largely 18- to 24-yearold males) said they had copied DVD movies, according to London-based Futuresource Consulting Ltd. Using either a DVD player to DVD recorder set-up or PC-based burning software, U.S. respondents copied an average of 12 titles across multiple genres in the past six months, compared to 13 titles in the United Kingdom. The report found, not surprisingly, that new-release movies prevailed among copied content. The United Kingdom had an average of 13 new and nine catalog titles, while in the United States the average was seven new releases and six catalog titles. See THREATS, Page 24 CONSUMER HOME PIRACY July 2008 MORE THAN HALF OF ALL DVD COPIERS IN THE U.S. ARE SUCCESSFULLY COPYING BLOCKBUSTER MOVIE TITLES I Successfully copying I Unsuccessfully copying Fox Boosts Catalog With Screenings By Thomas K. Arnold MARKETING In this era of Internet campaigns, 20th Century Fox Home Entertainment is taking things back to the street. The studio this summer has launched an ambitious program to promote upcoming DVD and Blu-ray Disc releases from Fox and MGM, which it distributes, through public screenings. Fox and MGM titles will be featured in the “MaliBlu-ray Screening Room” at the DKNY Jeans Beach House in Malibu, Calif., party central for the likes of Ashley Tisdale, Paul Abdul and Lauren Conrad; W Hotels in Los Angeles and New Orleans; and Tropicana Field in Tampa Bay, Fla., after Tampa Bay Rays baseball games. Fox titles also will be shown as part of Silver Screen Selects, a traveling film festival that this year will showcase mostly classic films from the recent Tyrone Powers and Alice Faye DVD collections. And in New York, the iconic New York films Working Girl, The French Connection and Moonstruck are screening as part of the Park Conservancy’s summer recreational program. “People want to get out of the house and do stuff during the summer, so we’re seizing the opportunity to get a See SCREENINGS, Page 24 U.S. 57% U.K. 34% Lower in the UK at 34% of DVD copiers 43% 66% Base: n = 1,163 U.S., 614 = U.K. Source: FutureSource Consulting MID-YEAR RELEASE TRENDS STUDIO OUTPUTSHARE: 2005-2008 BRIEFS I BLOCKBUSTER BENEFITS Blockbuster Inc.’s decision last week to abandon its $1.3 billion acquisition attempt of Circuit City Stores Inc. reportedly helped the Dallas-based rental giant increase the value of its 9% long term bonds (due in 2012) to 84.25 cents from 82 cents. – Erik Gruenwedel Palisades plans to release titles this winter in the United States starting with a line of Asia Extreme titles. Soon after will be independent ﬁlms, boxed sets, two-packs and Blu-ray Discs. – Lana Chichakly T I PORCHLIGHT PICKS UP PRESCHOOL SHOW PorchLight Home Entertainment has landed DVD rights to “Katakune,” a preschool TV show from Princ Films. Aimed at kids ages 2-5, the show follows a silkworm named Katakune who learns important life lessons traveling around the colorful world of Tazzleland. The ﬁrst DVD streets Oct. 14 at $12.98. – Chris Tribbey I PALISADES GETS MAJORITY OF TARTAN FILMS’ U.K. LIBRARY Palisades Media Corp. has acquired the majority of Tartan Films’ U.K. library of independent ﬁlms. Tartan titles include Black Book, Fast Food Nation, The Death of Mr. Lazarescu, The Proposition, Secretary, Mysterious Skin, Oldboy and Battle Royale. he mid-year snapshot of new-toDVD release trends is not pretty. Overall, the industry is down 23.8% in terms of new DVD releases when compared to the same six-month period last year. If tradition holds — the mid-year title count usually approximates about 50% of the annual output — then we can’t expect to see much in the way of improvement for the year overall. But it’s not all bad news. The studios are down just 8.4% in their combined output, and virtually all that loss can be traced directly to a sharp decline in theatrical catalog releases (library exhaustion). The new-theatrical, direct-to-video and children’s non-feature categories are holding steady. And the summer box office bonanza might even offset the double-digit title loss, with 2008 at least matching last year’s revenue totals. — Ralph Tribbey DVD Title Release Category Anime Cartoon Collections Children’s Programming, Non-Feature Documentary Foreign-Language Feature Films Miniseries TV Movies Music, Opera and Stage Performances Films of the Silent Era Short Subjects Special Interest Stage Productions (Non-Musical) Theatrical Catalog (pre-1997) New Theatrical (1997-current) Theatrical Serials (1930-1956) TV Series Programming (single disc) TV Series Programming: Multi-Disc Sets Direct to Video Feature Films Studio Totals All Releases Studio Share Annual Studio Mid-Year Percentage All Sources Mid-Year Percentage 2005 10 7 62 32 17 48 2006 3 11 83 6 28 7 44 4 2 80 238 241 21 165 108 1,041 7,086 14.7% 1,941 53.6% 13,865 51.1% 1 79 1 321 221 1 42 155 128 1,125 6,645 16.9% 2,297 49.0% 14,027 47.4% 2007 3 4 68 3 25 5 22 2 1 4 38 1 261 201 11 147 83 879 6,634 13.2% 1,772 49.6% 12,864 51.6% 2008 7 4 66 3 45 8 23 3 3 48 1 149 201 24 129 91 805 5,055 15.9% 26-week comparisons, includes titles released and subsequently discontinued. I RELEASE ACTIVITY FOR DVD Titles in Release Through Week Ended July 4, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Net DVD Titles Announced and/or In Release Through Dec. 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . 87,467+284 88,118+351 582 Scheduled 98 I RELEASE ACTIVITY FOR BLU-RAY . . . . . . . . . . . . . . . . . . . . . . .As of Week Ended July 4 Released Home Media Magazine July 13–19, 2008 http://www.homemediamagazine.com

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Home Media Magazine - July 13-19, 2008 Contents News News High-Def News Electronic Delivery News TV DVD Cine Mercado Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced Christian Entertainment Review - July 2008

Home Media Magazine - July 13-19, 2008

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