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Revenge of the Nerds

13 Mar, 2006 By: Stephanie Prange

Our recent interview with Kevin Tsujihara shows the extent to which studio attitudes are shifting about the video industry. Tsujihara, who cut his teeth on Warner's ambitious but scuttled Internet portal, Entertaindom.com, is ready to break the entertainment mold in his new position as president of Warner Bros. Home Entertainment.

The tech business is coming back with a vengeance.

It wasn't so long ago that brick-and-mortar video stores were in Wall Street's good graces. After the Internet bubble burst a few years ago, traditional video store chains once again enjoyed the praise of Wall Street analysts. In contrast to the ephemeral profits of the Internet boom, Blockbuster Inc. and the rest offered a business one could understand, something concrete.

Now the tables have turned. Movie Gallery and Blockbuster stocks are both taking a beating as video-on-demand begins to rise from the ashes of the Web boom. ITunes broke the mold, offering TV episodes shortly after airing, and a resurrected Moviebeam broke the traditional window between DVD and VOD by offering Disney films on VOD at the same time they were available on DVD. Amazon has long been rumored to be looking at a VOD model, and Apple is making moves to bring iTunes entertainment into the living room.

Meanwhile, the packaged-media business is stumbling badly. Neither the Blu-ray or HD DVD camps seems to be gaining any momentum — and both continually miss launch dates.

There was a time a few years ago when VOD was a joke, a vestige of the stock bubble that promised much more than it could deliver. But the tech nerds may now be having the last laugh.

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