Home Media Magazine - May 25 - 31, 2008 - (Page 40)

NEWS Netflix Streams Show Promise, Analysts Say Continued from page 1 www.homemediamagazine.com room,” said Anthony Wood, founder and CEO of Roku. Los Gatos, Calif.-based Netflix’s portfolio contains more than 10,000 digital movies and TV shows (largely catalog), in addition to 100,000 new and catalog DVDs. The company has spent more than $40 million launching its “Watch Instantly” streaming service as an added feature for monthly subscribers. Richard Doherty, analyst with The Envisioneering Group in New York, said Netflix scored a touchdown with the player, which he said also features Dolby audio and HDMI connectivity. “Simplicity and price are the key,” Doherty said. The analyst said installation of a sample took seconds, and he was able to watch seasons of his favorite show, “Sliders,” without a hitch. He said consumers could buy multiple boxes and not incur additional subscription fees. “You could take it with you to a hotel,” Doherty said. “My cable company charges me this much in six months.” Netflix chairman and CEO Reed Hastings has made no secret his desire to incorporate the company’s streaming technology into 100 entertainment devices. In January, Netflix announced it had partnered with LG Electronics to include its streaming service in a pending set-top box due later this year. Reports now say that device will be a Blu-ray Disc player. Rob Enderle with Enderle Group in San Jose, Calif., said Netflix has Gallery Has ‘Decent Chance,’ Analyst Says Continued from page 1 renaissance hinges on its ability to cater to its core rural markets and shutter underperforming stores. “I think they have a decent chance to turn things around, assuming they close all underperforming stores,” Woo said. Woo said he believes there still exists an active market for in-store video rental, and that Gallery’s video game unit, Game Crazy, has a lot of value. “They should be able to compete particularly with Gallery stores in underserved/rural areas,” he said. “Of course, fundamentals of the business are mixed, but I think they have a decent chance.” Indeed, Gallery lost more than $133 million on revenue exceeding $1 billion during bankruptcy. Hollywood Video stores accounted for $124 million of the loss and $742 million in revenue. Gallery stores lost $8.9 million on revenue of $337 million. The exit from bankruptcy meant elimination of all existing shares of common stock, Gallery’s 11% senior notes and 9.625% senior subordinated notes (bonds). Gallery said it will issue new shares of common stock and warrants. Unsecured claims and $325 million in senior notes (bonds) will be converted into new equity of the reorganized company, with Sopris Capital Advisors investing an additional $50 million in new equity. Sopris holds $72 million of Gallery’s $175 million second-lien debt. The exit — considered a formality following approval April 9 of Gallery’s second amended plan of reorganization by the U.S. Bankruptcy Court in Richmond, Va. — included the closing of a $100 million financing facility. Gallery has an additional $25 million in credit as well. “This is a great day for Movie Gallery and all of our customers, employees and business partners,” Malugen said. “Through this restructuring, we have effectively addressed our financial and operational challenges and laid a strong foundation for the I BARNES & NOBLE EYES BUYING BORDERS Barnes & Noble Inc. CFO Joseph Lombardi confirmed in a financial call May 22 that the company was considering acquiring its main competitor, Borders Group. Lombardi said the company would “study the feasibility of a transaction with — Billy Gil Borders.” I GAMESTOP PROFITS GameStop Corp. earned $62.1 million in the quarter ended May 3 — up 151% from the same period in 2007 — on sales of $1.81 million. “We have been sufficiently happy with the rate of sale on the PS3 at its current recognized that the market is eventually moving toward downloads, and if it doesn’t move aggressively, its business model “is toast.” “It’s very nice to justify as a cable alternative,” Enderle said. Regardless, in the quickly evolving entertainment distribution channel, content as much as price remains key, according to Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles. He said his initial reaction was that the player was another Moviebeam without the extra fees. Upon closer inWalt Disney Studios Home Entertainment celebrated the May 20 DVD release of National spection, Woo said the device is a step Treasure: Book of Secrets with a replica of Mt. Rushmore, made by sand sculptor Todd in the right direction provided Netflix Photo by: Tony DiMaio © WDSHE Vander Pluym, at Venice Beach, Calif. can upgrade its digital offerings. “I’ll have to wait to see if they can greatly expand movie offerings to new releases and if the picture quality is good,” Woo said. Continued from page 1 The sites were created by Harmony showcasing more than 10,000 mov- Digital Media Consortium, which ies (including Blu-ray Discs) and specializes in the development of TV shows from $4.99 that can be fund-raising initiatives for nonprofit purchased with a credit card or gift groups, together with support from the Motion Picture Association of card. future success of Movie Gallery.” Movie titles (restricted to ‘G,’ ‘PG’ America. He said the company emerged with “This program extends our vision a stronger balance sheet, cash to fund and ‘PG-13’ ratings) include Alvin operations and a streamlined store and the Chipmunks, Bee Movie, En- by providing a secure environment portfolio that will allow it to compete chanted, Nancy Drew and National for youth to enjoy entertainment that successfully in a swiftly changing Treasure: Book of Secrets; TV titles is appropriate for them, while raisinclude Avatar: The Last Airbender — ing funds for important programs home entertainment market. “The rapid and successful restruc- Book 3: Fire, SpongeBob SquarePants: that benefit youth in cities across the turing of Gallery is a testament to Pest of the West and Speed Racer: The country,” said Cyndi Court, SVP of our outstanding partners and asso- Next Generation — The Beginning, resource development for BGCA. The sites offer explanations about ciates, and we appreciate their hard among others. For an additional fee ($20 to $30), how movie ratings relate to children. work and dedication throughout this content can be burned to a blank Proceeds from purchases on the process,” Malugen said. The company has operated 3,300 DVD playable only on a PC. Gift sites are earmarked to support childstores under the Movie Gallery, cards can be purchased on the sites focused work undertaken by both Hollywood Video and Game Crazy from $25 and up and are slated to be organizations. “We at PTA want to encourage brands. The chain went public in available at Circuit City and Office families to make informed media Depot, among other locations. 1994. choices and have a dialogue with their children,” said Betsy Landers, L ATE FL ASHES national secretary and treasurer of PTA. “This is a tool to do that.” Willem de Zoete, VP and GM, price points, [and] assuming it continues Networks to enable BitTorrent downloads on digital content services with HP, at that rate, we’d be just fine holding the connected devices. Bundled BitTorrent and said streaming requires installation price,” said GameStop COO Dan DeMat- Orb PC applications would be accessible on of free software and can be viewed teo, hinting at a possible price cut for the such connected devices as smartphones, as it downloads. He said the content, — Chris Tribbey Sony’s PS3, Microsoft’s Xbox 360 and the Xbox 360 this year. which is in a Windows Media file Nintendo Wii. The bundled applications can I CINEMANOW UPS PROFILE be found at www.orb.com/bittorrent or www. format, could also be viewed on a Web-enabled HP television and the CinemaNow’s library of films is now bittorrent.com. — Billy Gil Microsoft Xbox 360. available through the Online Media chanDe Zoete said the HP technology nel in Windows Media Center, adding to I TARTAN VIDEO BEING SOLD supporting the sites is similar to Tartan Video and its 101 titles are being the ease of viewing Internet content on the what Wal-Mart used when it briefly — Kyra Kudick sold, Palisades Media Asset Fund LLC anTV. operated a streaming service. nounced in a notice of public foreclosure “We have always believed in the I BITTORRENT CONNECTED sale last week in the The Los Angeles Times. combination of DVD and downloadP2P media purveyor BitTorrent has part- Calls to Palisades and Tartan were not ing,” he said. “They will be in the — Chris Tribbey nered with streaming media company Orb returned by press time. future.” ‘Treasure’ on the Beach Family Site Has ‘G’ to ‘PG-13’ HOME MEDIA MAGAZINE (ISSN 1934-9882) is published weekly 51 times per year (weekly except for one week at the end of December) 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 informa http://www.homemediamagazine.com http://www.orb.com/bittorrent http://bittorrent.com http://bittorrent.com

Table of Contents Feed for the Digital Edition of Home Media Magazine - May 25 - 31, 2008

Home Media Magazine - May 25 - 31, 2008 Contents News Hardware Commentary TV DVD Reviews Pipeline Research Top 20 DVD Sellers Top 20 Rentals and Top 10 Charts Just Announced

Home Media Magazine - May 25 - 31, 2008

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