2006 Year in Review: AUGUST
1 Jan, 2007
By: Thomas K. Arnold
America Online officially enters the download derby with the launch of its new video portal, which offers users 45 video-on-demand content channels, including TV shows. The announcement attracts a steady migration of studios offering movies and other programming, including Sony Pictures, 20th Century Fox, Universal Studios and Warner Bros. Midyear financials yield mixed results for the two biggest video rental chains. Blockbuster, buoyed by a favorable tax audit and savings related to the closure of 164 stores, reports a second-quarter profit of $68.4 million, compared to a Q2 2005 loss of $57.2 million. But Movie Gallery, stung by a net loss of $14.9 million and a same-store sales slide of 4.6% for the quarter, announces its intent to increase layoffs and shutter 175 stores by year's end. Hot social networking site MySpace.com says that in two months it will begin selling downloads and episodic TV shows from 20th Century Fox and Fox TV. All three parties are owned by News Corp. Initial feature films available on MySpace will include The Omen, Thank You for Smoking and X-Men: The Last Stand. Venerable retail chain Tower Records and Video files for bankruptcy protection for the second time in two years. The filing follows by eight months the bankruptcy filing of another big music retail chain, Musicland, which was subsequently acquired by Trans World. The power of viral video sites continues to grow, with word that Sony Pictures Entertainment has acquired Grouper.com for $65 million. The site will continue as a standalone property. “A large segment of the [movie] audience is spending more and more of its time on user-generated content sites,” Sony's Sean Carey tells Home Media. “And as a content provider, we want to be where the audience is.”
Tower Records and Video files for bankruptcy protection for the second time in two years.