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2011 Year in Review

26 Dec, 2011 By: Erik Gruenwedel

Strong sales of 'Star Wars: The Complete Saga,' among other titles, contributed to a Blu-ray surge late in the year.

The debut of UltraViolet and streaming on sites from Amazon to Facebook in 2011 boosted digital delivery. Meanwhile, Blu-ray saw a surge in sales as well as its profile in the ubiquitous Redbox kiosks. The industry maneuvered through a year of evolution, laying the groundwork for what many hope is future growth in both digital and packaged media.


» Consumer spending on packaged media and digital delivery in 2010 reached $18.8 billion, just 3% less than the revised $19.4 billion total reported for 2009, DEG: The Digital Entertainment Group announces.

» Underperforming fourth-quarter titles and imbalances in available titles at kiosks hurt Redbox’s fourth-quarter results, causing the company to lower its full-year financial expectations.

» Netflix says its streaming service will become a standalone feature (red button) on a series of remote controls accompanying new Internet-connected televisions, Blu-ray Disc players and related media devices.

» Liberty Media CEO Greg Maffei says executives are in no hurry to finalize a new licensing deal between subsidiary Starz Entertainment and Netflix.

» Ralph Schackart with William Blair & Co. in Chicago says Blu-ray player sales will top 32 million units in 2011.

» Dell bows transactional VOD movie service VideoStage as part of the computer manufacturer’s updated user interface on new tablet computers. 

» Kiosk vendors for the first time generated more disc rental transactions than traditional video stores, according to new data from The NPD Group.

» Amazon reaches an agreement to acquire the remaining shares of LoveFilm, the United Kingdom-based online disc rental and streaming service.

» The Federal Communications Commission and Department of Justice approve Comcast Corp.’s $30 billion majority acquisition of NBC Universal, set to close by the end of the month.


» Blockbuster Express says it will deploy 3,000 new kiosks in 2011, bringing its installed base to about 10,000 units by the end of the year.

» Executives at Time Warner, Viacom and News Corp. say they will consider licensing content to subscription video-on-demand platforms (Netflix), in addition to tweaking release windows and pricing.

» Bankrupt Blockbuster puts itself up for auction with an opening bid of $290 million from its debt holders. It expects the sale to close by April.

» BTIG Research analyst Richard Greenfield says studios must cut the theatrical window by 50%, with Netflix subscribers topping 20 million, Amazon on the cusp of launching a streaming service and January box office revenue significantly down from the previous year.

» Summit Home Entertainment files a complaint seeking payment of more than $9.5 million from Blockbuster for disc shipments of The Twilight Saga: Eclipse, among other titles.

» Hulu generated 323 million hours (19.4 billion minutes) of viewing in 2010 — more than twice the combined viewing hours (162 million) of all the major network websites, a new report says.

» Walt Disney Studios Home Entertainment ups the unit disc price it charges rental kiosk vendors, notably Redbox and Netflix. The studio announces the All Access digital platform, enabling consumers to buy content directly and watch it on myriad connected devices.

» Netflix tests its streaming service in South America.

» Movie rentals downloaded from the Internet (transactional video-on-demand) will overtake digital movie sales by 2013, according to an IHS Screen Digest report.

» Amazon bows a streaming VOD service offering more than 5,000 TV shows and movies to annual subscribers.

» Redbox accounts for about 35% of the physical DVD rental market in the United States in January, the first time the kiosk operator has taken the overall lead in physical media rentals, according to The NPD Group.


» Warner Home Video’s windows on new-release movies offered to Netflix and kiosks help the studio realize a 15% margin lift, compared with titles not embargoed at least 28 days from street date, says Time Warner CFO John Martin.

» DirecTV is set to become the first to offer theatrical releases in the home in an early window via premium video-on-demand.

» A U.S. Bankruptcy Court judge rules Blockbuster can proceed with an auction process — thereby avoiding what many observers believed would be Chapter 7 liquidation.

» An increase of studio new-release combo packs that incorporate Blu-ray Disc, DVD and digital copy is “dangerously” taxing global Blu-ray production facilities, according to a new research report.

» Redbox ups the profile of Blu-ray Disc titles in kiosks, in addition to incorporating user interfaces that enable consumers to view either high-definition or standard-definition rentals.

» Warner becomes the first studio to offer movie rentals on its Facebook movie page, with 2-year-old release The Dark Knight.

» Walt Disney Co. CEO Bob Iger tells “The Charlie Rose Show” that packaged media isn’t dead — just challenged by alternative home entertainment options.

» Time Warner CEO Jeffrey Bewkes says subscription-based video-on-demand services such as Netflix and Amazon could challenge Hollywood’s ability to make movies and TV shows.

» Netflix subscribers are streaming more than six out of 10 movies watched online, topping digital sellthrough and transactional video-on-demand, according to a new report from The NPD Group.

» Netflix spends upwards of $100 million to outbid pay-TV networks for remake series “House of Cards,” starring Kevin Spacey and directed by Oscar-nominated David Fincher (The Social Network).

» Samsung unveils seven new wireless Blu-ray Disc player models that enable easier access to Internet-based content through upgraded user menus.

» Netflix’s streaming service takes a major body shot when pay-TV channels Starz Entertainment and Showtime Networks separately announced plans to delay or remove select content from the popular service.


» Blockbuster Express kiosks begin offering select titles, including Black Swan, on street date at premium prices.

» Netflix signs an agreement with Paramount to stream all of the studio’s first-run theatrical releases in Canada. It also secures U.S. streaming rights to all four seasons of the drama “Mad Men.”

» Dish Network wins the bidding for bankrupt Blockbuster with a $320 million ($228 million in cash) offer and announced it initially will keep 575 stores operating.

» Redbox says it is on track to introduce a digital offering in 2011.

» Dish Network says subscribers who include pay-TV channel Epix in their monthly plan can access 3,000 movies for free at DishOnline.com.

» Issues surrounding the cost of 3DTVs and required eyewear continue to negatively impact sales, according to a new report.

» Apple readies a cloud-based subscription digital storage system that would focus on video content, including movies and TV shows, an analyst says.

» Combined spending on 3D Blu-ray Disc will reach nearly $214 million worldwide this year, a rise of more than 530% over 2010, according to a report from IHS Screen Digest.

» Arco-based ampm convenience stores begin offering $1-per-day DVD movie rentals at branded kiosks throughout Central and Southern California.

» Mobile entertainment company mSpot.com launches a loyalty program, allowing members to rent new-release movies at discounted prices on portable devices, including the iPad, iPhone, Android, tablets, connected TVs, PCs, Macs and related smartphones.


» Redbox begins offering $2-a-day video game rentals, expanding on limited market tests the company launched in mid-2009.

» Blockbuster Express reports a first-quarter operating loss of $15 million, widened from an operating loss of $12 million during the prior-year period.

» Dish Network formally closes its $320 million acquisition of Blockbuster and delays a final decision on the fate of more than 1,100 video store leases.

» DirecTV is considering launching a fee-based Netflix-type streaming service, according to a detailed survey sent to select subscribers.

» A drop in the box office revenue of movies released on disc is being blamed for a nearly 10% drop in consumer spending on home entertainment in the first quarter of 2011, according to numbers from DEG: The Digital Entertainment Group.

» Warner Bros. Home Entertainment Group acquires movie recommendation website Flixster.com and its popular Rotten Tomatoes movie ratings service. Time Warner CFO John Martin says the deals are geared toward setting up consumer apps for the soon-to-be-activated cloud-based UltraViolet service.

» CBS negotiates streaming deals with Netflix for the online disc rental pioneer’s pending foray into Latin America, according to CEO Les Moonves.

» Time Warner CEO Jeff Bewkes says he remains bullish on physical media, notably Blu-ray Disc and 3D movies.

» Dish Network asks NCR Corp. to stop using the Blockbuster trademark on its 9,000 Blockbuster Express rental kiosks. The request is declined.

» Google announces a deal with three major studios that adds more than 3,000 films for rent on YouTube, with some titles available day-and-date with DVD.

» A Canadian judge orders Blockbuster Canada to be put into receivership after major Hollywood studios call for payment of more than $67 million owed them by the chain’s U.S. parent.

» Netflix signs a multiyear distribution deal with Miramax that will allow its subscribers to stream hundreds of movies from the studio founded by Bob and Harvey Weinstein.

» Dish Network includes three months of free access to Blockbuster By Mail movie rentals to new satellite TV subscribers.

» The dormant 3DTV market is poised for a dramatic comeback, with growth topping 500% in 2011, driven by unit sales in Europe, according to a new report.


» NCR Corp. files a lawsuit against Dish Network, saying the new owner of Blockbuster does not have the right to halt a license agreement NCR holds to operate more than 9,000 Blockbuster Express kiosks.

» Blockbuster LLC, which is owned by Dish Network, cuts the single-day rental price on most movie titles to 99 cents — the same fee charged by many kiosks.

» Miramax and Hulu sign a multiyear agreement that gives the studio’s catalog to the online content aggregator co-owned by The Walt Disney Co., News Corp. and NBC Universal.

» Lionsgate licenses episodes from its “Mad Men” franchise to a Latin American digital buyer — a move it expects to generate $10 million in incremental revenue.

» The Walt Disney Co. terminates about 200 positions in its studio operations, including home entertainment positions. Lionsgate downsizes its workforce 2% from a total workforce of 500.

» The Walt Disney Co. revamps its namesake website (Disney.com) to include access to video games and movies via subscription video-on-demand (SVOD), transactional VOD and ad-supported streaming.

» Warner says it will begin offering new-release and catalog titles on demand to consumers’ TVs in China, making it the first studio to do so.

» Amazon ups video offerings on its Prime Instant Video membership loyalty program with the addition of more than 1,000 new movies and TV programs.

» Hulu’s owners — The Walt Disney Co., News Corp. and NBC Universal — put the online repurposed-content aggregator up for sale.

» Redbox tests $1.15-a-night rentals in the Portland, Ore., area, the latest pricing test by the DVD kiosk chain to see whether consumers are willing to pay more than $1 a night. Blu-ray Disc rentals remain $1.50 and video games $2 a day.

» Sony Pictures Home Entertainment pulls its movies from Netflix’s streaming queue due to contract issues with aggregator Starz Entertainment.


» A new In-Stat study projects that CE products incorporating wireless connectivity will top 419 million units by 2015 — including 54 million HDTVs by 2013. But stationary devices, such as Blu-ray players, are just getting beginning to take advantage of wireless technology.

» Blockbuster LLC unveils new summer discounted movie rental pricing, which includes DVD/Blu-ray Disc titles available for $1.99 for the first night.

» Netflix says it will launch a new streaming service in 43 countries in Latin America and the Caribbean.

» Blu-ray Disc movies and related content will represent more than 50% of packaged-media sales in 2014, according to a new report.

» Studios’ attempts to sell premium VOD access to movies in the home for $29.99 months before their disc release may be doomed, according to a new report.

» Netflix separates subscriber plans into DVD-only and streaming-only offerings for $7.99 each, raising the base price for the hybrid disc and streaming plan 60% to $15.98.

» The Digital Entertainment Content Ecosystem, or DECE, launches its UltraViolet licensing program for content, technology and service providers.

» NCR Corp. CEO Bill Nuti says the company is looking at partnerships for its Blockbuster Express-branded kiosk business, or possibly to put the business up for sale.

» Mitch Lowe, who co-founded Netflix before joining Coinstar Inc.-owned Redbox in 2003, leaves the kiosk company to pursue “entrepreneurial and other interests,” according to a company statement.

» Blockbuster says it will continue operating 1,500 stores and employing 15,000 employees nationwide.

» CBS and Amazon enter into a multiyear agreement that allows Amazon Prime loyalty members to stream upwards of 2,000 episodes from the network’s TV library.

» Borders Group agrees to sell its assets to a group of liquidators led by Hilco Merchant Resources and Gordon Brothers Group.


» The f.y.e. (For Your Entertainment) retail chain begins offering proprietary in-store automated movie rental kiosks at select locations in Southern California.

» Walmart-owned Vudu begins offering 99-cent movie rentals.

» Amazon inks a license agreement with NBC Universal Domestic TV Distribution that allows its Prime loyalty members free streaming access to select Universal movies.

» Warner announces the launch of its first home entertainment discs to include cloud-based digital locker UltraViolet with the fourth-quarter releases of Green Lantern and Horrible Bosses.

» Three weeks after Netflix’s price hike, consumer perception of the company remains negative, according to YouGov BrandIndex, which tracks public perception of brands.

» “Seinfeld” star Jason Alexander releases an online video as a faux public service announcement asking viewers to donate $6 a month to the “Netflix Relief Fund” for subscribers facing a 60% price increase to stream and rent movies.

» Veteran home entertainment publicist Maria LaMagra dies Aug. 7 following a long battle with lung cancer.

» The NPD Group says more people buy DVD movies — especially box office new releases — than stream content on Netflix.

» Total consumer spending on home entertainment stabilizes, with a second-quarter decline of just 3.6% to $3.99 billion, from $4.14 billion in the same period in 2010, according to numbers compiled by DEG: The Digital Entertainment Group.

» Lionsgate announces that in December it will bow yet-unreleased theatrical title Abduction, starring “Twilight” actor Taylor Lautner, digitally for a two-week period priced at $6.99. The action film would open in theaters  Sept. 23 and is slated to debut on disc Jan. 17, 2012.

» Netflix reaches 1 million subscribers in Canada — 10 months after launching its first international operations in the country.

» Warner launches a beta test of a social media application that allows users to organize, display and buy movies online.

» Trans World Entertainment says it would consider opening new f.y.e. stores in 2012 and 2013, given the shrinking entertainment retail landscape and accompanying opportunities in select regions.

» Redbox begins charging a 15% to 20% premium for nightly $1 DVD movie rentals at kiosks in Austin, Texas.

» Miramax partners with Facebook to launch an app that gives users access to about 20 movies for streaming rental.

» Netflix and Telemundo sign a streaming deal covering more than 1,200 hours of Spanish-language TV programming annually.


» Starz Entertainment ends content license renegotiations with Netflix. As a result, Netflix will lose access to movies from Sony Pictures and Walt Disney Studios, among others, when the agreement expires Feb. 28, 2012.

» Apple stops offering 99-cent rentals of TV programs on its signature iTunes content store and Apple TV.

» Bankrupt Blockbuster Canada ceases operations after prospective buyers of the chain fall through, according to a filing with an Ontario court.

» The Walt Disney Co. names Bob Chapek president of Disney Consumer Products, reporting directly to CEO Bob Iger.

» Netflix reports revised third-quarter guidance (ending Sept. 30), saying it will lose 1 million more subscribers than previously thought. It also formally bows a streaming service in Latin America.

» Dish Network bows a Blockbuster Movie Pass streaming service that is available to new satellite TV subscribers for an additional $10 monthly fee.

» Netflix separates its disc rental business and names it Qwikster; subscriber defections soar.

» Warner Home Video is set to expand the 28-day delay of new releases from kiosks to video stores, beginning early next year, according to sources.


» Dish Network launches a Blockbuster-branded subscription streaming service called Movie Pass that includes movies from cable aggregator Starz Entertainment.

» Paramount Pictures combines its worldwide home entertainment, digital licensing and television licensing activities under one division, called Worldwide Home Media Distribution.

» Apple innovator Steve Jobs dies Oct. 5 after a bout with pancreatic cancer.

» Shipments of Blu-ray Disc players are set to reach 105 million units by 2015, with BD recorders replacing DVD recorders, according to new research by In-Stat.

» Failure to attract consumer interest in the cloud-based digital locker could spell doom for the home entertainment industry and movie production going forward, says Miramax CEO Mike Lang.

» Microsoft announces it is launching a repurposed TV streaming platform via Xbox Live that will offer content from more than 50 media companies globally, beginning in the fourth quarter.

» Netflix cancels the planned rollout of by-mail disc rental unit Qwikster as critics howl and the stock plummets.

» Strong sales of Thor, X-Men: First Class and Star Wars: The Complete Saga, among others, help create a renaissance for Blu-ray Disc and packaged media, according to a new report.

» Universal Studios Home Entertainment cancels plans to release action comedy Tower Heist in the premium video-on-demand window just 21 days after its Nov. 4 theatrical launch.

» Blu-ray Disc enjoys its best week ever compared with DVD in the week ended Oct. 8, kicking off the fourth quarter by contributing more than 40% of total disc revenue, according to Home Media Research.

» Redbox raises the price of DVD rentals to $1.20 from its traditional $1-per-day rate.

» Netflix loses 810,000 net subscribers in the United States in the third quarter (ended Sept. 30) — a 145% downturn from the comparable quarter a year earlier.

» Blockbuster LLC rolls out a new in-store subscription program, Movie Combo, that rewards frequent visits to its 1,500 stores.


» Blockbuster Express implements new pricing across its base of 10,000 kiosks nationwide, enabling consumers to rent new releases on street date.

» Consumer spending on home entertainment increased 5% in the third quarter (ended Sept. 30) — the first quarterly increase of home entertainment spending since the first quarter of 2008, according to the latest data from DEG: The Digital Entertainment Group.

» Netflix lets go more than 100 employees in the human resources and customer service departments — the latter involved with the recently canceled Qwikster disc rental service.

» BTIG analyst Richard Greenfield says studios should withhold new releases to all physical rental chains for 60 to 90 days.

» Blockbuster LLC reports net income of $3.3 million on revenue of $601 million — the first income since its acquisition out of bankruptcy by Dish Network.

» A proposed settlement of a class-action lawsuit alleging price fixing filed against Walmart and Netflix seeks judicial approval.

» 20th Century Fox Home Entertainment launches the first-ever virtual disc store in the United Kingdom — capable of selling new-release Blu-ray Disc and DVD movies via a smartphone.

» Apple names Bob Iger, CEO of The Walt Disney Co., to its board of directors.

» Best Buy begins rolling out branded disc rental kiosks in Canada — filling a void left when Blockbuster Canada ceased operations.

» Netflix, in a regulatory filing, says it expects to generate a net loss for the full calendar year 2012 — a downward revision from the company’s Oct. 24 earnings call.


» Wedbush Securities analyst Michael Pachter issues a report undermining Netflix, calling the SVOD service a “broken” business model.

» J.P. Morgan analyst Paul Coster, in a note, says the domestic kiosk disc rental business is approaching saturation, with more than 50,000 units in operation.

» Media reports suggest Lionsgate and Summit Entertainment have renewed merger talks. Both studios decline comment.

» Two websites accused of selling and distributing counterfeit DVDs are shut down by the federal government as part of a large-scale crackdown on illegal domains undertaken on Cyber Monday (Nov. 28).

» British supermarket giant Tesco rolls out a cloud-based program that allows consumers online access to in-store DVD and Blu-ray Disc movie purchases via media devices, including the PC, tablets, PlayStation 3, and LG and Samsung connected TVs.

» Cable operators are expected to implement incremental fees to subscribers who exceed monthly limits on data accessed from the Internet, including video streams from services such as Netflix and Hulu Plus, beginning next year, an analyst said.

» Blu-ray Disc sales in the United States will reach about 115 million units in 2011, compared with 85 million units in 2010 — spearheaded by the Star Wars: The Complete Saga boxed set release, according to Futuresource Consulting.

» The U.S. Postal Service takes further steps to eliminate first-class, next-day delivery of letters, postcards and related items — such as Blu-ray Disc and DVD mailers — in an effort to save money, which could adversely affect by-mail rental services such as Netflix.

» The U.S. House of Representatives votes to make it easier for companies to share consumers’ video rental history online.

» Xbox 360 owners now have access to more content and an updated user interface, thanks to a series of new updates made available Dec. 6, Microsoft announces.

» A mere 5% of the 134 million Americans with devices capable of Internet video-on-demand are actually using them to rent movies, according to a new report from The NPD Group.

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