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Feingold Says Size Counts Sometimes

10 Jun, 2006 By: Erik Gruenwedel

Benjamin Feingold

Benjamin Feingold, president of worldwide home entertainment, digital distribution and acquisitions for Sony Pictures Home Entertainment, is no stranger to the changing dynamics of home entertainment. A longtime advocate of Blu-ray Disc, one of packaged media's two avowed high-def white knights, Feingold recently assumed responsibility for Sony's burgeoning digital aspirations.

Home Media Retailing asked Feingold, as we have Warner Bros. Home Entertainment Group president Kevin Tsujihara and Universal Studios Home Entertainment president Craig Kornblau, about the digital revolution and how the studios seem to be in a hurry to repurpose content across multiple distribution channels — from theater screens and big-screen TVs to small portables.

HMR: Will Sony be offering movies for download beyond Movielink and CinemaNow?

Feingold: I expect at least two more services will be added by the end of the summer.

HMR: Do the burgeoning download and digital on-demand distribution models threaten packaged media, including Blu-ray Disc?

Feingold: It's an alternative. The digital file will be — under any circumstance — lower resolution. But because it is low resolution, it is potentially more portable and takes less [storage] space than a Blu-ray Disc, where a whole movie could take 25GB.

HMR: Is portability of entertainment with lower resolution a trade-off consumers are willing to make?

Feingold: I think there are many consumers of multiple products. Clearly, if you want the best quality and the absolute best experience, you are going to watch [entertainment] on a big TV in your house in Blu-ray high-definition with the best audio. All the portable media, from the iPod to the Zen, are fairly early stage resolution. So there is a trade off: portability versus quality.

HMR: How legitimate is the download business, considering the devices' screen size, storage capacity and battery life?

Feingold: You have to look at portable as a sub-set or as an auxiliary product to laptops. A laptop is a better viewing experience, and obviously you have a battery shelf-life issue. And with the portable experience, the screen by definition is smaller, and for a video product you generally need enough size.

But for certain types of programming it could be fine, and for secondary use it could be fine. As a primary use for TV product, it may be OK. But as a primary use for movies, it doesn't seem to have the [required] resolution at this moment in time.

HMR: Are portable devices then limited to shorter programming? It seems resolution on the PSP is actually quite good.

Feingold: Yes, PSP is quite good. But if you have a choice between watching it on a PSP versus a bigger screen and it is an hour-and-a-half of your time, your choice is probably on a larger screen. You never know with the consumer.

HMR: Are you continuing to roll out major title releases in the UMD format?

Feingold: We have become a bit more selective, but we are continuing to.

HMR: How has the response been to movies on PSP?

Feingold: We would like it to have been stronger. We were hoping the business was going to be bigger than it is, which tells me that the portable medium [for movies] — versus music, where it is a perfect product — is still a work in progress.

HMR: How does Blu-ray fit into a download world?

Feingold: I think Blu-ray will be the primary viewing [format], and over time it will eclipse DVD. But it is also possible that with Blu-ray, with managed copy [DRM], either for a small or no charge, we could add additional files that people could have. For example, buying a Blu-ray Disc, they might get [an extra] file in Windows Media or PSP file format. So it can be one purchase and multiple uses.

HMR: Do you see it happening this year?

Feingold: It is a possibility.

HMR: Did the success of The Da Vinci Code and X-Men: The Last Stand reaffirm theatrical's top billing in the distribution food chain, or could those films' success have been replicated via digital distribution?

Feingold: I don't believe so. I think the hype associated with a new release and the group [theatrical] setting is unique. Once you take away the exclusivity that theaters have, I think people will think they can wait.

HMR: Will the theatrical release always be a forerunner to digital?

Feingold: There may be products that go directly to DVD like we have now, or there is the business of TV product, which is TV first and then DVD. There are direct-to-DVD products. We had one recently: Hollow Man 2. But to get to the kind of grosses you are talking about, you need a theatrical experience. Retail would not support the kind of mass quantities [of DVD units] they allow us to put in as a function of a successful theatrical release.

HMR: So you don't see digital distribution altering the current day-and-date release with packaged media?

Feingold: I don't for the foreseeable future.

HMR: Is sellthrough still the most economically successful channel for studios, even with the recent theatrical successes?

Feingold: For movies, there is no video market, technical market or TV market. When you greenlight a picture, you look at all the revenue and all the costs. They are meant to add up to some number, which hopefully ends up with a profit for the corporation on that particular title.

So in terms of profitability, there is no real single P&L [profit and loss] like sellthrough vs. rental vs. whatever. But, on a per-unit basis, DVD sellthrough is the highest.

HMR: Do you see Sony-branded kiosks at the retail level, where consumers could download movies and music?

Feingold: It is a possibility. But the thing that makes retail work is that there is lots of it. So I don't believe it would be the principal service. We would like all key retail to get into the digital business at some point.

HMR: Are you working with retailers to achieve this?

Feingold: We are working, [but] it is the early years. We are meeting with a large retailer. It is in early implementation or late implementation stages with certain retailers.

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