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2006 Year in Review: APRIL

1 Jan, 2007 By: Thomas K. Arnold

Major studios bow out of releasing movies on UMD, to be played on Sony's PSP.

  • What one Hollywood executive calls a “transformative moment” occurs when five of the six major studios allow consumers to download their movies over the Internet to own. It's hailed as a revolutionary development, even though these films can be burned to a disc but are not playable on DVD players. In separate deals, download services Movielink and CinemaNow announce slates of big Hollywood movies, including new releases such as Brokeback Mountain and Aeon Flux, that will go on sale the same day they come out on DVD. Between the two services, all the majors but Disney are on board, as are MGM and Lionsgate.

  • On the flipside, movies for Sony's PlayStation Portable (PSP) are on the way out. The portable player falls victim to lackluster sales and the growing belief that despite hype about the PSP being a “multimedia” player, it's being used chiefly to play games. At least two major studios, Universal and Paramount, have stopped releasing movies on the Universal Media Disc (UMD) format, while others have cut way back. “It's awful,” says one studio executive. “Sales are near zilch.”

  • First-quarter results show a continuation of the DVD blues that dogged Hollywood for much of 2005. Overall consumer spending on home video sales and rentals is down 4.3% from the first three months of last year, according to preliminary estimates from Home Media Research.

  • Netflix files a patent infringement suit against Blockbuster Online, seeking a jury trial to shutter its rival. The suit, filed in federal court, claims Blockbuster's 19-month-old Web rental service violates two Netflix patents. The suit, which seeks unspecified financial damages, is seen by analysts as a move to at least ding Blockbuster Online. Even if there's no outright victory, says one, “at the very least they make Blockbuster divert what few resources it has to defend this.”

  • HD DVD does, in fact, launch this month, with two players, both from Toshiba, and a grand total of three titles — Warner Home Video's The Last Samurai and The Phantom of the Opera and Universal Studios Home Entertainment's Serenity. Early adopters seem to like the new format, find several minor glitches and have one common plea: more movies!

  • Meanwhile, in the rival camp, Sony Pictures Home Entertainment president Benjamin Feingold vows to stick to the promised May 23 street date for his studio's first Blu-ray Disc titles, despite reports that the first Blu-ray players have been delayed until June. “We are going to honor our commitment to release movies when we said we would,” he says.

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