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TK's MORNING BUZZ: The Next Studio Whose Revenue-Sharing Deal With Blockbuster Comes Up for Renewal Will Likely Take an Even Bigger Hit Than Universal

15 Feb, 2001 By: Thomas K. Arnold

The furor over Universal's new revenue-sharing deal with Blockbuster -- and the insinuation that Big Blue is holding studios hostage unless they fork over VOD rights as well -- has yet to die down.

And yet Universal got off easy.

Sure, the studio is giving its product to Blockbuster for electronic distribution over its new video-on-demand service, but Universal has never been opposed to testing alternate distribution channels.

Just a few weeks ago, Universal Studios Home Video president Craig Kornblau -- who's not commenting on the current flap -- told me his studio is "talking aggressively to everybody about everything, to all the other companies that are promoting various ideas about distribution alternatives."

As for the VHS element, Blockbuster promises to buy 3% to 4% fewer copies of Universal rental cassettes than it was under the olddeal -- terms that aren't all that bad when you consider that by its own admission, Blockbuster's VHS rental business is down more than 10%.

Still, Antioco's latest stunt shows how determined he is to get his own way, and how aware he is of Blockbuster's formidable clout in the rental market.

Not only did he reportedly instruct store managers to keep Uni rental titlesBring It On and Rocky and Bullwinkle in the back room until he gave the OK, but he broke the news about the Universal deal in a conference call toanalysts, apparently without checking first with his studio "partners."

Talking to other studio heads yesterday, it's apparent that any message he wanted to send has been received, loud and clear.

The next studio whose revenue-sharing deal will come up for renewal will likely take an even bigger hit than Universal -- unless some brave executive decides to just say no.

Comments? Contact TK directly at:TKArnold@aol.com

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