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THE MORNING BUZZ: Here's Hoping Home Video Doesn't Get Sacrificed to Synergy

18 Dec, 2001 By: Stephanie Prange

Vivendi Universal, in its quest to compete on Wall Street with the likes of AOL Time Warner and Disney/ABC, made some big moves last week to increase its U.S. presence.

In addition to what it calls a "strategic alliance" with satellite company Echostar, Vivendi says it will acquire the entertainment assets of USA Networks in a deal valued at approximately $10.3 billion. USA's Barry Diller will serve as chairman and c.e.o. of Vivendi Universal Entertainment, including the film and video arms.

The name of the game in these sorts of deals is "synergy"—USA's cable networks will get Universal product and Universal product will get better TV distribution.

But let's hope in the move toward synergy, the strengths of both USA Home Entertainment and Universal Studios Home Video aren't sacrificed in the shuffle.

Universal Studios Home Video, under the leadership of Craig Kornblau, has had a couple of stellar years. Hits have included The Nutty Professor, American Pie and The Mummy franchises and, most recently, Dr. Seuss' How the Grinch Stole Christmas. Universal also distributes DreamWorks Home Entertainment titles, which have included Chicken Run, Shrek and Gladiator. But it's not just the titles that have afforded Universal such a strong home video presence, it's also the company's skill in marketing them. Most recently, Universal pulled out all the stops for The Grinch, bringing out director Ron Howard for a tree-lighting ceremony to kick off the title on video, mounting a Toys for Tots drive and advertising the title through tie-ins with various food items from green Heinz ketchup to oranges in the produce section.

USA Home Entertainment, for its part, has landed such hits as the Oscar-winning Traffic under the stewardship of chief Joe Amodei. Meanwhile, the company has shown its skill at marketing the specialty sports genre through distribution of titles from three of the major professional sports leagues. The company recently launched the Ultimate Jordan DVD set.

While big conglomerates will always strive to get bigger, let's hope Vivendi Universal doesn't lose sight of the contributions of both USA's and Universal's home video departments. They may be cogs in a big machine, but they've worked swimmingly.

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