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Chernin Lauds Fox's DVD Retail Status, Eyes Indie Distribution

12 Sep, 2006 By: Erik Gruenwedel

News Corp. president and COO Peter Chernin said 20th Century Fox Home Entertainment remains bullish on the DVD market despite a growth slowdown in the sector.

Speaking Sept. 12 at the Merrill Lynch Media & Entertainment Conference in Pasadena, Calif., Chernin lauded Fox Home Entertainment's recent designation as category management for DVD at Wal-Mart (replacing Warner Home Video) coupled with similar designations at Target and in Europe with French-based Carrefour, which claims to be the largest retailer in Europe.

“Whatever growth there is in the DVD business, [being designated category management] will help us outperform the marketplace,” said Chernin. “We are now the category manager for DVD in the top three DVD sellers in the world. Whatever growth there is, we should get a disproportionate share.”

Chernin said despite Fox's status among the top three global retailers, he deosn't expect to replicate previous years' rates of growth in DVD this year. The COO hinted Fox would expand in the future by targeting independent film distribution with the launch of its Fox Atomic label.

“We look at the kinds of money Lionsgate is producing and we think that should be our money,” said Chernin.

The News Corp. executive added that continued forays into digital distribution, including future movie downloads at MySpace and other third-party sites, would help grow entertainment revenue. He said about 50% of all traffic at competing community sites such as YouTube.com come from MySpace.

News Corp. reported $250 million in revenues from its Internet-based properties in fiscal 2006; a figure Chernin said the company hopes to double in 2007.

Separately, News Corp. announced it paid $187.5 million for a 51% stake in Jamba, a Berlin-based entertainment delivery service specializing in ring tones for mobile phones. The move made News Corp. the largest mobile content company with operations in 30 countries, according to Chernin.

“If there are two billion mobile phones in the world, it represents the largest distribution platform in the world and we ought to be a key player,” he said.

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