Home Media Magazine - June 15, 2008 - (Page 6) NEWS BRIEFS I RESEARCH FIRMS MERGE Research firms Understanding & Solutions and Decision Tree Consulting have merged to create market tracking and consulting organization Futuresource Consulting. Based in the United Kingdom, the new organization will use Decision Tree’s data manipulation and presentation software in conjunction with Understanding & Solutions’ forecasting capabilities. Key executives from both companies will comprise the senior management team, including Jim Bottoms, managing director, corporate development; Sarah Carroll, director, strategy consulting and continuous services; Tony Bicknell, managing director, business development; and Andrew Snoad, director, client services and custom solutions. – Billy Gil www.homemediamagazine.com Warner to Cut Film Production CEO Jeff Bewkes says studio will do more with less By Erik Gruenwedel SUPPLIER Jeff Bewkes, president and CEO of Time Warner Inc., said Warner Bros. Studios by 2009 will bow half the number of films in its theatrical slate from two years ago. In 2006, Warner released 27 theatrical titles in addition to 10 movies from New Line Pictures for a total of 37 releases, according to Home Media Magazine research. Speaking to investors at the Deutsche Bank Media & Telecommunications Conference in New York, Bewkes said pressure to improve revenue and cash flow growth from its $1 billion filmed-entertainment division meant taking a step back and making more out of less. “Our motivation is to improve our return on capital,” Bewkes said. “Doing that we believe we can move profit up.” To accomplish this, the CEO said the studio will focus on building wider consumer adoption of Blu-ray, expanding cable video-on-demand simultaneously with standard DVD (Bewkes said cable VOD generated more than three times the margins of DVD rental) and other electronic distribution. RENTRAK PROFIT GROWS IN Q4 By Erik Gruenwedel I GENIUS INKS DEAL FOR PEACE ARCH FEATURES Genius Products inked a deal with Toronto-based Peace Arch Entertainment Group Inc. to distribute features Chapter 27 and Watching the Detectives on DVD. Santa Monica, Calif.-based Genius is 70% owned by The Weinstein Co. Psychological drama Chapter 27 (streeting Sept. 30) explores Mark David Chapman’s gradual breakdown during the days leading to his murder of music icon John Lennon. It stars Jared Leto, Judah Friedlander and Lindsay Lohan. Watching the Detectives, due Aug. 12, stars Cillian Murphy as a hapless video store owner who falls for a femme fatale customer (Lucy Liu). – Erik Gruenwedel Bewkes said the elimination of New Line Pictures, which he characterized as a redundant infrastructure, would result in ongoing overhead improvements as well. He said DVD has been a reliable revenue generator for all studios the past five years. Bewkes said that for every $100 in box office revenue, Warner Home Video extracted more from DVD. “Our studio still leads in that area because we have scale superiority in worldwide DVD distribution,” he said. Bewkes said expansion of Blu-ray, VOD and related improvements in electronic distribution by moving away from physical DVD would help grow filmed entertainment. “Those kinds of things we think in the long run will bring revenue growth to the total film sector,” he said. When asked why Time Warner wasn’t selling Warner DVDs via newspaper Web sites, Bewkes said it sounded like a great idea. “We will work with anybody to sell DVDs or magazines,” he said. “If that was judged by our people to put offers in front of consumers, maybe that would be a good way to do it.” Investor Urges Amazon, Borders Combination By Erik Gruenwedel RETAIL A billionaire hedge-fund manager who owns 30% of Borders Group Inc. said Internet behemoth Amazon.com should acquire the fiscally challenged bookseller. William Ackerman, founder of Pershing Square Capital Management, said acquiring Borders’ 500 retail locations nationwide would help Amazon diffuse upstart efforts I CINRAM INKS EURO DVD DEAL WITH UNIVERSAL DVD replicator Cinram International Income Fund has signed an agreement with Universal Pictures International BV for the manufacturing and distribution of DVD and Blu-ray Discs in Western Europe. Financial terms of the deal were not disclosed. – Erik Gruenwedel by some cash-strapped states to collect sales tax on e-commerce. The stores would also allow Amazon to offer same-day service in addition to selling non-bookstore product. “Amazon could buy the company for about $400 million to get those locations that would take more than $1 billion to build,” Ackermann told The Associated Press. Barnes & Noble Inc. last month also expressed interest in acquiring the Ann Arbor, Mich.-based parent of Borders Superstores and Walden Books. Borders reported a first-quarter 2008 (ended May 3) loss of $2.2 million, compared to a loss of $1.6 million in the previous-year period. Representatives from Borders and Amazon were not immediately available for comment. I ANIME BOOSTS NAVARRE Anime distribution subsidiary Funimation Entertainment helped Minneapolis-based Navarre Corp. post net income of $686,000 for the fourth quarter (ended March 31), compared to a loss of $2.2 million during the previous-year period. CEO Cary Deacon said niche DVD distributor BCI Eclipse was rebounding in the first quarter after proving to be “a major disappointment” in the second half of fiscal 2008. Navarre shuttered the unit’s Los Angeles operations (except for an acquisitions office) and relocated select management to Minneapolis. Navarre also distributes first and thirdparty DVDs, which when combined with video games and PC software, increased 4.2% to $148.5 million, from $142.6 million last year. Total quarterly revenue increased 1.2% to $160.2 million, from $158.3 million last year. – Erik Gruenwedel Preliminary results for new-to-DVD releases for the first five months of 2008 are off an eye-popping 19.2% when compared to the same period in 2007. However, the big money category of new theatrical releases is exactly where it was last year, posting 263 new titles versus 261 for the same period in 2007. And the other “money” category of multidisc TV DVD sets is also well into the plus zone with an 11.9% gain on a year-over year basis. On the negative side, 73.1% of the slide is centered in the poor performance of special interest, anime, foreign-language feature films and music — four groups that tend to underperform in terms of sales per title count. — Ralph Tribbey NEW-TO-DVD RELEASE TRENDS FIVE-MONTH COMPARISONS: 2007 AND 2008* DVD Title Release Category Documentary TV Series Programming: Multidisc Sets New Theatrical (1997-current) Direct-to-Video Feature Films All Other Categories* TV Series Programming (single disc) Special Interest Children’s Programming, Non-Feature Music, Opera and Stage Performances Anime Theatrical Catalog (pre-1997) Adult-Themed, Non-Feature Foreign-Language Feature Films TV Movies Five-Month New-to-DVD Comparisons 2007 85 219 261 444 126 79 1,624 234 658 217 539 145 624 123 5,378 2008 105 245 263 442 118 71 1,295 182 490 161 372 100 423 79 4,346 +/20 26 2 (2) (8) (8) (329) (52) (168) (56) (167) (45) (201) (44) (1,032) %+/23.5% 11.9% 0.8% -0.5% -6.3% -10.1% -20.3% -22.2% -25.5% -25.8% -31.0% -31.0% -32.2% -35.8% -19.2% * New-release comparisons through May for both 2007 and 2008. Other Categories: Cartoon Collections, Karaoke, Miniseries, Films of the Silent Era, Short Subjects, Silent Short Subjects, Stage, Non-Musical and Theatrical Serials. I RELEASE ACTIVITY FOR DVD Titles in Release Through Week Ended June 6, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Net DVD Titles Announced and/or In Release Through Sept. 30, 2008 . . . . . . . . . . . . . . . . . . . . . . 86,806+208 87,405+214 548 Scheduled 84 I RELEASE ACTIVITY FOR BLU-RAY . . . . . . . . . . . . . . . . . . . . . . As of Week Ended June 6 Released espite a 25% decline in revenue from its pay-per-transaction (PPT) DVD rental division, Rentrak Corp. reported fourth-quarter (ended March 31) income of $1.7 million, compared to income of $1.6 million during the prior-year period. Favorable tax adjustments of $560,000 contributed to the profit. PPT revenue for the Portland, Ore.based media data tracking company totaled $19.5 million, compared to $25.9 million the previous year. EVP and CFO Mark Thoenes said the loss of Rentrak’s fifth-largest (Warner Home Video) and sixth-largest (Walt Disney Studios Home Entertainment) PPT suppliers in fiscal 2007 continued to impact results. He said the loss of these suppliers’ product and associated revenue directly contributed to the decline in PPT revenue from the previous year’s fourth quarter to this year. The CFO said despite Warner’s return to PPT this fiscal year, the financial terms of the deal would not yield revenue or margins comparable to the studio’s prior agreement terms. Rentrak also has PPT agreements with 20th Century Fox Home Entertainment, Sony Pictures Home Entertainment, First Look Studios Home Entertainment and Lionsgate. “Despite that, it is important to note that our PPT division continues to generate the necessary cash flow to support further development of our Essentials Media Measurement Suite, the company’s future growth engine,” Thoenes said. Indeed, revenue for Rentrak’s Advanced Media Information (AMI) division grew 29% to $2.8 million, compared to $2.2 million during the previous-year period. Chairman and CEO Paul Rosenbaum said Rentrak now collects and analyzes VOD data from 54 million set-top boxes representing 28 multiple service operators (cable, Internet and telecommunications) and 100 content providers. “Our tremendous success in the VOD market lays the foundation for Rentrak also becoming a major player in linear TV measurement,” Rosenbaum said. Rentrak is currently testing a TV ratings and usage service (TV Essentials) in more than 2 million set-top boxes — directly targeting Nielsen — and is expected to launch the service in the first quarter http://www.homemediamagazine.com http://Amazon.com
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