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Mood Swings in Hollywood

28 Oct, 2005 By: Thomas K. Arnold

The changing mood at the studios is becoming quite apparent. For the better part of this year, there's been frustration at the slowing growth of the DVD market and uncertainty — bordering on bewilderment — about the high-definition future.

Now, we're starting to see some action. Top executives have accepted the fact that the DVD business no longer is growing in the double digits and are instructing their staffs to deal with it.

At the same time, while publicly there's still division in Hollywood between the two rival next-gen camps, the overall sense is that Blu-ray Disc will win, even among the fence-straddlers and at the lone HD DVD holdout.

As I write this, launch plans already are being formulated, while the existing DVD business is being dealt with through increasingly precise dating, strategic positioning and smarter marketing.

Take a few steps back, and everything's connected: You have to get your house in order before moving on. And moving on to a new format isn't done with tunnel vision but, rather, with a far greater perception, and perspective, than anyone probably thought the studios were capable of.

Case in point: the big restructuring that just occurred at Warner Bros. Everything under the corporate sun involved in delivering entertainment to consumers was collected and pushed into a new division, the Warner Bros. Home Entertainment Group. The “cornerstone” of the new group, according to a press release, is Warner Home Video, but the new division also includes online, wireless, games and emerging technologies — along with the beat cop of home entertainment: antipiracy.

The big-picture strategy here, according to Kevin Tsujihara, the new group's president, is to coordinate every aspect of reaching audiences with content, regardless of what that content is or how it gets into the consumer's home. Tsujihara said Warner executives considered it imperative “to address that in a nimble fashion and not be stuck in the way we've been organized for 50 years.”

I'd bet similar talk is going on, privately, at all the other studios. Warner may have been the first to act, but it won't be the last.

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