Home Media Magazine - April 27 - May 3, 2008 - (Page 1) APRIL 27–MAY 3, 2008 New Line Honored at 7th Summit By John Latchem teve Einhorn, the president and founder of New Line Home Entertainment, and his team will be honored as this year’s DVD Visionaries at the Seventh Annual Home Entertainment Summit: TransFORMATions. The two-day event, produced by Home Media Magazine, is expected to draw a who’s who of Hollywood home entertainment leaders to S the Hyatt Regency Century Plaza in Century City, Calif. June 16-17. New Line is being absorbed into Time Warner, and most of the home entertainment team will be laid off. The last day for many of them is just 10 days after the conference, and they and their rich history will be honored June 16 at the dinner immediately following See HOME ENTERTAINMENT, Page 26 Netflix in the Hot Seat BRINGING DIGITAL ENTERTAINMENT TO YOU THE BIG PICTURE Online retailer punished for streaming costs, Blu-ray rental hike By Erik Gruenwedel RETAIL Wall Street last week showed little compassion for perennial investor favorite Netflix despite the online rental pioneer posting strong quarterly results, including record subscriber growth. Analysts reacted negatively when the Los Gatos, Calif.-based service lowered full-year earnings-per-share projections due to ongoing efforts to stream movies to the PC. Shares of the DVD-by-mail service plummeted nearly 24% to $30 per share April 22 before rebounding slightly — less than a week after they GROCERS GONE KIOSK The supermarket rental is increasingly a kiosk transaction By Erik Gruenwedel RETAIL A recent evening at a Ralphs supermarket in Foothill Ranch, Calif., found a group of shoppers milling around a movie rental kiosk from The New Release despite the presence of a Blockbuster across the parking lot. “You and mom will really like it,” a girl told her dad as she pointed to Walt Disney Studios’ Enchanted. The father later commented that it was convenience and the $1 daily rental fee that persuaded him try the kiosk rather than walk across the lot. At Albertson’s, one of the few national supermarket chains that offered movie rentals, shelf space has given way to RedSee KIOSKS, Page 28 «PROVIDING FREE ACCESS TO CONTENT IS NOT A LONG-TERM FORMULA FOR PROFITABLE GROWTH.» REED HASTINGS reached record highs. Netflix, which said it has 9,000 titles available for streaming, has not revealed exact costs, including license rights, associated with its Instant Watch service. CFO Barry McCarthy suggested that streaming costs had exceeded analyst projections, which some said rivaled earnings. Co-founder and CEO Reed Hastings said as much when he told analysts, “Providing free access to content is not a long-term formula for profitable growth.” See NETFLIX, Page 26 >> ELECTRO N IC DELIVERY Studios to Bow VOD Venture cable, satellite and online, with By Erik Gruenwedel ionsgate, Paramount Pic- some in high definition. The as yet unnamed venture tures and MGM last week announced their plans to will be based out of the New York bow joint video-on-demand offer- headquarters of Paramount owner ings across multiple distribution Viacom Inc., with backend support and affiliate services provided by channels by fall 2009. The offerings will appear on See VOD, Page 28 INSIDE >> Int’l Downloads Carrefour going digital. >> Clean Image Free Earth Day download. PAGE 14 L Blockbuster Rolling Out New Test Stores By Erik Gruenwedel RETAIL Blockbuster Inc. is getting a makeover. The chain has quietly transformed 13 stores in the Dallas area into research zones aimed at gauging consumer response to a variety of changes, including offering 6 a.m. store openings, beverage bars, consumer electronics, kids’ areas, Wi-Fi access and new signage, among other changes. The Dallas-based No. 1 DVD rental >> HIGH-DEF MAR KET S HAR E Blu-ray vs. HD DVD Sales Comparison as of 4/20/08 Blu-ray vs. DVD Sales Comparison* INSIDE >> Game for Video Sony expanding PS3 role. company last week began installing Blu-ray displays at its 4,800 company stores, featuring a 42-inch HDTV playing movies via a Sony PlayStation 3 game console. Sony and studios reportedly are underwriting many of the costs associated with the $5,000 kiosks. Since becoming CEO, Jim Keyes — former chief executive at 7-Eleven — said he is determined to transition See BLOCKBUSTER, Page 26 Week Ended 4/20 9% Since Inception Week Ended 4/20 6% 32% 91% 68% 94% >> Not So Mandatory Managed Copy off AACS specs. PAGE 12 I Blu-ray I HD DVD I DVD Source: Nielsen VideoScan First Alert * Top 20 BD unit volume vs. Top 20 DVD unit volume NEWS A new survey from The NPD Group suggests consumers are preparing to spend less on entertainment. SUPPLIER Summit Entertainment plans an aggressive distribution slate over the next year, starting with P2. RESEARCH Fox dominates the charts, with Juno topping sales and rentals and Aliens vs. Predator: Requiem at No. 2. Page 7 Page 10 Page 24
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