Entertainment on the Move22 Aug, 2005 By: Erik Gruenwedel
More and more, Americans like their entertainment to go. They're watching movies, listening to music and playing games on cell phones, laptops, portable DVD players, in-car DVD players, and media players such as Apple Computer's iPod and Sony's PlayStation Portable (PSP).
Craig Kornblau, president of Universal Studios Home Entertainment, characterized the world of portable entertainment as a “red-hot growth area” for home entertainment. “Whether it's a business traveler with a laptop or kids in the back of the family minivan, people are creating their own personal entertainment environments wherever they go,” he said.
Sony Pictures Home Entertainment president Benjamin Feingold concurred, saying the movie business must migrate with the increasingly mobile lifestyles of consumers.
“If we stay in the living room or bedroom, we're limiting ourselves,” he said. TwinBird, a Japanese manufacturer of water-resistant electronic devices, last month introduced a waterproof portable DVD player with a 7-inch screen that can withstand up to 30 minutes underwater — about the average bath time for a child.
DVDs hit the road
Statistics show that 22 car models offer DVD players as standard features, and another 20 percent offer them as options, according to Autobytel's Automotive Information Center.
Sales of notebook-size portable DVD players are projected to grow exponentially as prices drop. The NPD Group reports sales of portable DVD players rose 50 percent in the 12-month period that ended June 30, from the previous 12-month period. And Steve Koenig, senior manager of industry analysis for the Consumer Electronics Association (CEA), said sales should increase more than 200 percent this year, from 422,000 units to 930,000 units.
The average wholesale price for a portable DVD player is down to $171, from $272 in 2004. Next year, the average price should fall even further, to $155, Koenig said.
The soaring popularity of portable DVD players has prompted some enterprising vendors — including McDonald's, with its DVD rental kiosks — to make packaged media available on the road.
Gary Delfiner, COO of Global Multimedia, a leading supplier of budget DVDs, said he's “very aware” of the spike in mobile DVD players and is soliciting gas stations to sell his budget discs. Global just cut a deal with an oil company to include a promotional DVD offer with monthly credit card statements. “The gas companies feel this is a growing market, and they want to capitalize on it,” Delfiner said.
While portable DVD players allow the mobility of movies, entertainment on the go has expanded to include the telco industry, which is incorporating mobile technologies such as Wi-Fi and WiMax on so-called “smart phone” devices, according to Forrester Research.
Sony Ericsson just released a 4-inch-by-2-inch phone that can store photos and play music, videos and games. In February, Verizon Wireless launched V Cast, a video-on-demand service earmarked for its cellular network.
Europe's Vodafone last year partnered with Twentieth Century Fox Entertainment to produce downloadable “mobisodes” of its real-time TV drama, “24.” Earlier this month, ABC Television announced an agreement with mobile entertainment provider Proteus to begin offering content from the network's daytime soaps, in addition to episodes from “Alias” and “Jimmy Kimmel Live.” Radio Shack has begun offering downloadable video games that can be accessed by cell phone subscribers to Cingular Wireless and Sprint PCS networks.
“People are spending more time with cellular phones and wireless devices, so it's important to have a playback device for films,” Feingold said. “All studios need to look at these devices as potential distribution outlets.”
Cell phone manufacturer Qualcomm, which last week announced it would partner with Boeing Co. to begin testing the use of mobile phones on air flights, reportedly plans to construct a nationwide wireless video network capable of offering up to 100 content channels. Qualcomm and Boeing reportedly hope to begin offering phone service in 2006, pending approval from the Federal Aviation Administration.
“[Smartphones] are already the Swiss Army knife of the consumer electronics world,” said the CEA's Koenig. “They are only going to sprout more blades with MP3 playback, TV and video capabilities.”
Next to iPods and video games, many summer travelers are choosing Sony's PSP platform, which plays movies and TV shows on Universal Media Discs (UMD), as an entertainment option.
Feingold said that from the outset, developers at Sony envisioned the PSP as not merely another handheld game player, but as a true multimedia device. Accordingly, he's not surprised that five of the six major studios, and several leading independents, are releasing movies on UMD.
Led by the iPod, the CEA said, portable digital media player sales, which include the PSP, have increased from 7.1 million units in 2004 to 15.9 million units this year.
Lions Gate Entertainment released six UMD titles in June and plans to release six more in September. It will release up to 60 titles next year.
It is all part of an evolving distribution strategy, Lions Gate CEO Jon Feltheimer said.
“I think there is going to be significant incremental revenue from new buyers of content,” Feltheimer said. “I do not think that is in the future. I think that is now.”