Home Media Magazine - February 2, 2009 - (Page 28) NEWS www.homemediamagazine.com Separately, Circuit City disclosed in a regulatory filing that it lost more than $413 million on revenue of $700 million from Nov. 10 through Nov. 30, 2008, which included the coveted Black Friday shopping weekend. Cost of merchandise, purchases and warehousing charges exceeded $616 million. In addition, Circuit City Feb. 3 to 4 is hosting a two-day job fair in Richmond for its 34,000 idled employees nationwide. Circuit City Liquidation Sales Approach $500M By Erik Gruenwedel RETAIL Everyone loves a bargain, especially during a recession. After a sluggish sales start to liquidation, Circuit City closed in on $500 million in sales entering Super Bowl weekend — two weeks after the Richmond, Va.-based No. 2 consumer electronics retailer ceased operations. Discounts on a variety of merchandise, including Blu-ray players, movies and DVDs, averaged 30%, up 20% from the opening weekend of the clearance sale Jan. 17. Four liquidators, headed by Woodland Hills, Calif.-based Great American Group, were hired to sell $1.8 billion worth of inventory prior to a March 31 deadline imposed by a bankruptcy court. “We are very pleased with the reception that these clearance sales [have] received,” Scott Carpenter, EVP and operations director for Great American, told Twice magazine. Great American expects the clearance event to conclude ahead of schedule in the next four to five weeks. Edward Woo, research analyst with Wedbush Morgan securities in Los Angeles, said he was surprised by the sales figure, considering the economy and the relatively low discounts early on. “People always complain that the discounts are not large enough, but their actions [or actions by others] show that the discounts were enough to drive sales,” Woo said. Netflix Gains in Bad Economic Environment Continued from page 1 L A T E FL A SH ES I LIEBERFARB LAWYERS ASK COURT TO DISMISS SUIT In the latest round of a legal battle between the widely proclaimed father of DVD Warren Lieberfarb and digital technology company MOD Systems, lawyers representing Lieberfarb have asked a Seattle court to dismiss a MOD countersuit. Lieberfarb first sued MOD in the summer of 2008, claiming MOD owed him at least $749,560 in loans, fees and business expense reimbursements. The loan has been repaid, his lawyers said. MOD countersued in early January, arguing Lieberfarb overstated his connections and expertise, claiming breach of contract, and that Lieberfarb was planning to either “obtain MOD Systems or sell MOD Systems’ confidential technology, business plan and other assets.” — Chris Tribbey on revenue between $387 million and $393 million. Netflix said it would end 2009 with nearly 11.3 subscribers and annual revenue between $1.58 billion and more than $1.6 billion. Profit would range from $88 million to $98 million. “There’s a lot of top- and bottomline growth left in online DVD rental,” said president and CEO Reed Hastings in a call with investors. Independent analyst Rob Enderle said the results underscored the strength of DVD subscriptions during a market downturn. He said consumers generally wouldn’t terminate a relatively inexpensive entertainment service unless their economic position becomes dire. The analyst said that during market downturns, consumers typically rethink where they spend their entertainment dollars. “But folks will still want to watch movies, and Netflix represents one of the best values for doing that,” Enderle said. “This market downturn may actually work for them long term; it really depends on how quickly «THERE’S A LOT OF TOP- AND BOTTOM-LINE GROWTH LEFT IN ONLINE DVD RENTAL.» REED HASTINGS, NETFLIX CEO streaming [becomes mainstream].” Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles, added Netflix’s “guidance indicates they believe their success will continue into 2009, despite the weak economy.” A big proponent of digital delivery, Enderle said Netflix’s streaming service safeguards the company for the future, in addition to being a valueadd to current subscribers. Hastings said streaming would increasingly become a focal point of Netflix’s future strategy. The service doesn’t separately disclose amounts spent procuring licensed content for streaming. According to a regulatory filing, Netflix spent $11.1 million in the quarter acquiring library content, which included streaming. The CEO said increases in streaming costs are offset in part by decreases in DVD shipping costs. Hastings said he didn’t know exactly the impact of streaming on DVD rentals, but he considered it a positive. “Increased streaming content not only helps us with our current subs, it also helps us with CE partnerships,” he said. Netflix pays partnered consumer electronics manufacturers, including LG, Samsung, Microsoft and TiVo, a fee for each new subscriber generated by their devices. Hastings dismissed concerns about increased competition from Amazon’s VOD service, which has been included with a number of CE devices that also support Netflix. He said the competition was “pretty indirect” since the VOD business focused primarily on new releases compared to Netflix’s catalog streams. “No firm or [business] model owns an entertainment customer, and we think there’s room for us to create a large subscriber base while other firms also succeed,” Hastings said. I ANALYST: CHERNIN ‘LIKELY’ TO EXIT NEWS CORP. Citing the downturn in the global media market, including maturing DVD business, Pali Capital analyst Richard Greenfield said it is “increasingly likely” News Corp. president and COO Peter Chernin would not remain on board when his contract expires this summer. Though Chernin, who is chairman and CEO of Fox Entertainment Group and a big supporter of DVD and Blu-ray, has made no mention of departing, Greenfield said that with the passage of time in the current economy, chances for a major contract renewal diminish. The executive reportedly earned more than $30 million in 2008, exceeding even the compensation of News Corp. CEO Rupert Murdoch. — Erik Gruenwedel DTV Switch Still Up in Air Continued from page 1 and be back before Congress for another vote, House Commerce Committee Chairman Henry Waxman (D-Calif.) told The Associated Press. The bill had passed through the U.S. Senate with a unanimous vote Jan. 26, and while it would not have allocated any more funding to a $40 consumer coupon program for digital converter boxes, it would have allowed people with expired coupons to get new ones. The National Telecommunications and Information Administration, which is running the coupon program, announced earlier this month that it had used up the $1.34 billion Congress allocated to it. More than 2.5 million people are on a waiting list for the coupons, and the Nielsen Co. estimates 6.5 million American homes are unprepared for the switch. President Barack Obama has come out in support of a delay. However, House Republicans argued a delay would prove costly to broadcasters who have prepared for all-digital TV Feb. 17. PBS said Jan. 26 WTO Rules for U.S. in Chinese Piracy Case Continued from page 1 America (MPAA) claims U.S. copyright industries lose billions annually in revenue to piracy in China. It said that nine out of every 10 DVDs sold in China are illegal copies. In its findings the WTO said Chinese customs officials routinely allowed seized counterfeit goods to be reintroduced in the market. It said the Beijing government repeatedly ignored foreign claims regarding pirated DVDs and music CDs. The WTO recommended China bring “copyright law and the customs measure into conformity with it obligations” in international trade and commerce. It did not rule that Chinese efforts to curb piracy remain minimal and fail as a deterrent, an action the United States had sought. A Chinese commerce ministry spokesman said in a statement the government “expresses its regret.” “As we continually strengthen domestic intellectual property rights, we will continue to promote international exchanges and co-operation and promote the healthy development of global trade relations,” the spokesperson said. Dan Glickman, chairman and CEO of the MPAA, welcomed the ruling as a positive step toward curbing piracy in the most populous country. “China restricts [theatrical] access to many legitimate titles, but that doesn’t stop the pirated distribution of virtually all U.S. films in China,” Glickman said in a statement. “The WTO has affirmed that these titles rightly deserve copyright protection.” Still, Glickman said, “We are disappointed that [the WTO] did not accept the strength of the U.S. argument that China’s threshold for taking criminal action does not deter rampant piracy, which is evident.” that a delay could cost it more than $20 million, since public broadcasters have already made arrangements to have their current signals expire in February. “In my opinion, we could do nothing worse than to delay this transition date,” Rep. Joe Barton (R-Texas) told the AP. “The bill is a solution mostly in the mind of the Obama administration.” Some businesses, including Verizon Communications, AT&T and the nonprofit Consumers Union, have come out in support of a delay, while the Consumer Electronics Association, the Federal Communications Commission, and trade group CTIA – The Wireless Association have urged Congress to stick to Feb. 17. Peter Fannon, Panasonic technology, government and regulatory policy VP, expressed some caution over any potential delay. “This date was set up years ago, and a lot of people have put a lot of work into this,” he said. “I think most observers agree that no matter what date you set, there are going to be people who are not ready.” 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. 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Table of Contents Feed for the Digital Edition of Home Media Magazine - February 2, 2009 Contents News TV DVD Health/Fitness Reviews Pipeline Research Top 20 Sellers Top 20 Rentals and Top 10 Charts Just Announced Home Media Magazine - February 2, 2009 Home Media Magazine - February 2, 2009 - (Page Cover1) Home Media Magazine - February 2, 2009 - (Page Cover2) Home Media Magazine - February 2, 2009 - (Page 1) Home Media Magazine - February 2, 2009 - (Page 2) Home Media Magazine - February 2, 2009 - (Page 3) Home Media Magazine - February 2, 2009 - (Page 4) Home Media Magazine - February 2, 2009 - Contents (Page 5) Home Media Magazine - February 2, 2009 - News (Page 6) Home Media Magazine - February 2, 2009 - News (Page 7) Home Media Magazine - February 2, 2009 - News (Page 8) Home Media Magazine - February 2, 2009 - News (Page 9) Home Media Magazine - February 2, 2009 - News (Page 10) Home Media Magazine - February 2, 2009 - News (Page 11) Home Media Magazine - February 2, 2009 - TV DVD (Page 12) Home Media Magazine - February 2, 2009 - TV DVD (Page 13) Home Media Magazine - February 2, 2009 - Health/Fitness (Page 14) Home Media Magazine - February 2, 2009 - Health/Fitness (Page 15) Home Media Magazine - February 2, 2009 - Reviews (Page 16) Home Media Magazine - February 2, 2009 - Reviews (Page 17) Home Media Magazine - February 2, 2009 - Reviews (Page 18) Home Media Magazine - February 2, 2009 - Reviews (Page 19) Home Media Magazine - February 2, 2009 - Pipeline (Page 20) Home Media Magazine - February 2, 2009 - Pipeline (Page 21) Home Media Magazine - February 2, 2009 - Top 20 Sellers (Page 22) Home Media Magazine - February 2, 2009 - Top 20 Sellers (Page 23) Home Media Magazine - February 2, 2009 - Top 20 Rentals and Top 10 Charts (Page 24) Home Media Magazine - February 2, 2009 - Top 20 Rentals and Top 10 Charts (Page 25) Home Media Magazine - February 2, 2009 - Just Announced (Page 26) Home Media Magazine - February 2, 2009 - Just Announced (Page 27) Home Media Magazine - February 2, 2009 - Just Announced (Page 28) Home Media Magazine - February 2, 2009 - Just Announced (Page Cover3) Home Media Magazine - February 2, 2009 - Just Announced (Page Cover4)
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