Insights from home entertainment industry experts. Home Media blogs give you the inside scoop on entertainment news, DVD and Blu-ray Disc releases, and the happenings at key studios and entertainment retailers. “TK's Take” analyzes and comments on home entertainment news and trends, “Agent DVD Insider” talks fanboy entertainment, “IndieFile” delivers independent film news, “Steph Sums It Up” offers pithy opinions on the state of the industry, and “Mike’s Picks” offers bite-sized recommendations of the latest DVD and Blu-ray releases.
Built-in obsolescence is a hallmark of American industry. Technology exists to create lightbulbs that would last practically forever, but then the lightbulb industry wouldn't sell many lightbulbs — hence, the thin filament that burns out after a few months.
The same is true of car parts, refrigerators (the shelves on my Whirlpool have been glued and reglued myriad times, and the dang thing's only five years old), you name it.
In the pre-digital era, home entertainment had the perfect excuse for built-in obsolescence — moving parts and wear and tear. The mechanisms on audiocassettes and videocassettes have so many tiny parts, it's inevitable that something will go wrong — and even if it doesn't, the wear and tear to the tape eventually damages the magnetic field, meaning the sound or image start to disintegrate, say, after 10 or 15 years.
The vinyl LP was even worse. There were no moving parts, but the sharp diamond needle tore the bejesus out of those poor vinyl grooves, and with each play it got worse. Diehard rock fans like myself frequently “wore out” albums that had to be replaced; I remember buying two copies, at the onset, of Bruce Springsteen's Darkness on the Edge of Town back in the late 1970s because I knew what would happen.
DVDs and audio CDs don't wear out. It's been said they last about 300 years, although no one's been around long enough to find out. Now, I don't have exact replacement figures, but I believe a fair amount of income, in years past, came from people replacing worn-out software. With those five-inch optical discs, with no moving parts and nothing touching the surface except a beam of light, the record companies and studios stand to lose a small but nevertheless lucrative stream of incremental income.
If you look at what's happening in our industry, certain things start to make sense. Why are studios so against coating their DVDs with something to minimize damage from scratches? The technology exists — I remember the VSDA as far back as the middle 1990s lobbying for this, on behalf of rental dealers who were already dealing with scratched and otherwise field-damaged game discs, and who were fearful of the same thing happening once DVD really got going.
Well, DVD really has gotten going, and the rental dealers I've spoken with tend to dismiss field-damaged discs as a fact of life. Could it be that the studios simply don't want to coat their discs? You can't really blame their reasoning — they'd be spending more money and taking in less, since there would be fewer replacement sales.
I also find it interesting that the studios most concerned about driving down the price of DVDs use flimsy cardboard boxes rather than those nice, handsome, sturdy all-plastic “keepcases”. All right, so it's not the software, but collectors want things in mint condition, so if the box goes, they're likely going to buy a new one, especially if buying another copy will only set them back $10 or $12.
I'm not saying the studios are deliberately trying to thwart DVD's archival nature, or are consciously trying to make a product that somewhere down the road will break down, like a car, and need to be replaced.
It's just that built-in obsolescence is so ingrained in our culture that doing so would be second nature. They probably haven't given it much thought; it's just the way things are done.
I don't buy much stuff branded “collectible.” Even DVDs, because often the “collectible” element is packaging. I admit, I'm oodles more interested in titles that are collectible because of content than packaging. This makes me wonder what all the efforts at collectible packaging will really amount to.
I had some time off last week and spent a bit of it maintaining auctions on eBay. Some of what I am selling is old dolls and, as I searched the Web for information about some of them, I found a lot of validation for an idea I've held for quite a while: There are two kinds of collectibles.
One kind is what I call the “contrived collectible.” That's anything that's collectible because the marketing department stamped it on the package. The market is flooded with them – everything from kids meal toys to sports cards to handpainted state quarters.
There is quite a market for contrived collectibles – just ask the Ty company, which makes Beanie Babies, or companies like the Franklin Mint, which seem to make any event (or even nonevent) as an excuse to issue a commemorative snow globe, coin, figurine or toilet paper roller. The labeling and promotion of these special, limited edition, genuine synthetic collectibles (just check the coupon flyer in your Sunday newspaper) is enough to send me running in the opposite direction.
Then there are the real collectibles – stuff that's collectible now either because it was a goof, like a mis-struck coin, or because it was popular some time ago, because then it really was cool – so cool that most of that item was used and then lost, discarded or damaged.
Dolls are a great illustration. As I surfed for information and price comparisons, it was quite obvious the dolls I had received as gifts (most of which were immediately snatched from my preteen hands and stashed away because they were collectible and too “nice” to let a child play with) are worth no more – and in some cases less – than the orignal selling price. The stuff I chose for myself and played with is what rakes in the big bucks from collectors.
I think the same will ultimately be true for DVD. Some of those “collectible” packages make a nice impression as a gift, but they mess up the symmetry of your media shelf and I don't believe they increase the value of the product.
I'll be watching sales trends for collectible-packaged DVDs. Although they may do well at retail around the holidays, I'll bet that over time that fancy package is just a distraction.
But that won't hurt the bottom line, at least for quite a while. Because just as with other collectibles, only time will tell.
I've never been a big fan of anime -- Japanese animation -- even though I've been aware of it for some time. I actually like some of it, and animation in general, but I just couldn't get into anime as a regular course on my entertainment diet. I'm taking another look, though.
If I learned anything as I interviewed a passel of anime sales and marketing executives last week for a story in Video Store Magazine, it was that anime is on the cutting edge of video. Not because it's a hip, cool, fly sort of style that captures college-age youth culture, but because its consumers force the suppliers to push the technical limits of delivery as well as content.
The marketing folks are an incredibly savvy bunch who know what their audience wants and how to give it to them. They've realized that for their audience, VHS is so yesterday. They're bailing out faster than you can push "rewind" and putting all their video chips in DVD.
I think DVD will be around for a while, but you can bet the anime crowd that has embraced it will be the first to abandon it for IP delivery. These people are all about mobility and traveling light. I read them as true hunter-gatherers, people who will watch hundreds of streams or downloads and only collect their particular favorites on hard storage media. Some anime is already available by stream and download.
Some days I think our world is looking more and more like Blade Runner (a world where, I expect, most anime fans would be in heaven). There are networks of wireless "hot spots," places where you can mosey by with a laptop that's set up for wireless protocols and tap into the Internet while you're sitting in your car or on a park bench. Why not watch a movie? Or a ball game? Major League Baseball drew 30,000 viewers with its first live streaming Webcast a week or so ago. I think eventually most consumers will gobble down Webcasts and store only favorites, but not until the systems are more unified and user friendly.
Anime consumers are ahead of the curve. They understand gadgets and how to make them play together, or at least how to use them in complimentary ways. (I'd love to see data on what the home entertainment gear looks like in homes sampled by favorite genre.) And they're passionate about their content -- they won't let a little technology stand between them and their prize.
That's luring me into looking into the wider selection of anime content that's become available as the genre's popularity has grown in the United States. So many people just can't get enough of it. I guess I'll have to pop in a few discs and see what all the fuss is about.
Yes, discs. I won't go selling off all my DVD yet, but I certainly plan to keep my eyes on the anime market as a herald of things to come in our industry.
DVD has become the ultimate director's medium for feature films. Buena Vista Home Entertainment positions its special edition Vista series DVDs as “definitive” versions of those films, and New Line Home Entertainment ‘s extended edition DVD of The Lord of the Rings: The Fellowship of the Ring could likely become the definitive version of that film, as the alternate ending laserdisc of The Abyss became the preferred edition of that James Cameron film for many fans.
But, unlike laserdisc or VHS, DVD is also a handy and preferred storage medium for episodic television, which is becoming less episodic — with a beginning, middle and end in each installment — and more like a serial novel. The perfect example of this is the new series “24,” which hits DVD Sept. 17. The concept of that series – a collection of one hour periods told in real time in the life of a counterterrorist agent (Kiefer Sutherland) – lends itself to DVD unlike any other. It's almost easier to watch the series on DVD, in its proper order, than it is on television. If you miss an episode on TV, you can fall behind despite the quick rehash of past events that occurs at the beginning of each show. In an apparent nod to this phenomenon, 20th Century Fox Home Entertainment is releasing the season one DVD collection before the new season starts on television, allowing viewers to catch up on disc.
“24” isn't the only TV series like this. “The Sopranos” is also best watched in episode order. Indeed, my husband, an avid fan of the show, said he would not watch the third season DVD set before he's seen the first two seasons in their entirety. Retailer Best Buy has picked up on this and is offering big discounts of up to $40 when consumers purchase previous seasons in addition to the third season collection. I've had to recount many an episode of “Buffy the Vampire Slayer” to friends who were puzzled by a development in the weekly series after missing an earlier episode. With DVD, they need only watch the series in order to understand.
It almost seems as if studios are making television with DVD in mind, and if they weren't up to this point, they certainly will in the future. Fox exec Peter Chernin noted in a recent earnings call that the studio earned $100 million from TV shows on DVD in the last year. One can envision a TV series made to reap DVD millions with less emphasis on its advertising take.
Yet again, DVD is proving its stripes as an improvement over VHS, not just in picture and sound quality, but in other ways as well.
By: Stephanie Prange
Some funny things happened this week.
For starters, Sony announced it was giving finally giving up on Beta, stopping production some 20 years after it lost the battle for supremacy with VHS. I guess Sony kept on producing limited quantities of the machine for the diehards who refused to join the VHS herd (I wonder if there are still tapeheads out there who are stubbornly clinging to eight-track, swearing the sound is better than cassette). But by now, the numbers have dwindled to the point where it no longer makes sense.
A belated “good for you,” Sony – it's tough to concede defeat, particularly when the better format didn't win, but you made the right decision. In fact, you probably should have thrown in the towel, oh, back in 1982. This is sort of like Ford continuing to produce the Edsel well into the ‘70s…
I also got a chuckle about the announcement that Universal Studios Home Video was entering the increasingly lucrative TV-on-DVD market with a couple of “Baretta” packages. Gee, what a coincidence – Robert Blake, the star of the vintage detective series, is awaiting trial for the murder of his wife, and his preliminary hearing is just two weeks after the videos are coming out.
I mentioned this to another studio executive and instead of blasting Uni for exploitation, he said his studio, too, hopes to cash in on the publicity surrounding the aging actor's legal woes by releasing on video one of his forgotten ‘B' movies.
I guess any publicity is good publicity when it comes to selling videos. I'm waiting for Paramount to release a boxed DVD set of “Naked Gun” movies, starring another celebrity killer, O.J. Simpson. (Oh, he was never convicted, right? And I called him a killer! So sue me, O.J.)
And then there's the lawsuit by a squeaky clean video rental chain against 16 famous directors, in which it wants a judge to sanction its practice of editing profanity, violence and sex from films on video.
If the suit is successful and sets a precedent, allowing others to muck up intellectual property, I've got some edits of my own I'd like to make – there are some nasty scenes in Shakespeare I think could be toned down a little, and then there's all that plague and pestilence in the Old Testament. In fact, I'm thinking condensed version here – God made man, and everything man does pisses God off.
Have a great Labor Day weekend!
As if the Walt Disney Co. wasn't having enough trouble trying to hang onto its license for Winnie-the-Pooh products and stay afloat in the stock market, the two issues have at last converged.
At least two law firms have announced shareholder class action lawsuits against Disney, CEO Michael Eisner and CFO Thomas Staggs, complaining they hid a lawsuit over the hunny pot of money Pooh rakes in (estimated to be as high as $6 billion a year) from shareholders, who lost money when the case came to light.
The case was filed in 1991 but Disney didn't disclose it in filings with the Securities and Exchange Commission until May 15 of this year. A Disney spokeswoman said at the time that the company didn't think it was important to disclose until a judge set a trial date, which didn't happen until early this year.
But Disney's share price has skidded down 46 percent since the disclosure and the shareholders are blaming the dispute. They contend the loss of Pooh's income, which some sources say is as much as a quarter of the company's annual bottom line, would just be too much to bear. They also contend they might have made different choices if Disney had told the truth earlier on.
That seems to be a common theme in a case in which a judge fined Disney's lawyers $90,000 a year ago for shredding dozens of boxes of documents that might have helped sort out how much Pooh is due.
The case is scheduled for trial – no doubt one Disney execs would prefer to avoid –- in February. So far it's looking like the script for a Celebrity Death Match episode feature a chubby bear and a mouse that is looking scrawnier by the day.
In the wake of the shareholder filings, one of my friends, a Disney shareholder, has been complaining that it's time for a change in the big offices at the Mouse House. Observers have been speculating as much since the company held its annual meeting in the frozen wastelands of Connecticut in January, a choice my vested friend blasted then as a way to hide from the bulk of investors. The problem, he said, is that paying out executives would cost more than keeping them. Pooh, my friend observed, may change that.
Funny, I seem to remember Pooh being afraid of the dark.
I don't have stock in Disney. I still like the animation that took the company to top, even if some of its more recent efforts have left me nonplussed. But from what we can see in the numbers the company's overall performance has been slipping for some time and, that may not be the worst of it. If recent litigation is any indicator, investors should me much more worried about what they can't see.
THE MORNING BUZZ: Rental Stores Aren't the Only Ones That Think Movies and Games Are a Match Made in Heaven
Video stores have long rented movies on video alongside video games. While not always a hit with the game suppliers (scuttlebutt is one tried to take out an ad in the video trades warning retailers to cease and desist renting their product several years ago), the practice certainly has been a hit with consumers. Now game companies seem to be getting on the video bandwagon.
Acknowledging the rise of DVD and the fact that games now play on digital discs as well, game hardware manufacturers have built DVD playability into their machines. It's always been included on the Playstation 2; Microsoft's Xbox acts as a DVD player with the right add-on. In fact, the Xbox supplier this week gave an extra push to sell its game consoles over the holidays by offering full-price rebates for the console's DVD Movie Playback Kit through Nov. 2 to those who purchase an Xbox console.
Game companies are recognizing that the DVD movie fan is often a game player as well. Our recent Consumer Survey bears this out. According to the exclusive survey of 900 U.S. households conducted by Video Store Magazine market research, 64 percent of DVD households also have games, while only 35 percent of VHS-only households also have games.
Indications are game companies are warming to rental. Blockbuster in the last year crafted an exclusive 30-day video game rental window for the Playstation 2 game Maximo: Ghosts to Glory. Following the trend forged by major retailers, Pay-Per-Transaction firm Rentrak Corp. is actively soliciting revenue-sharing agreements with game companies and seems determined that now is the time to do such deals.
And, while game companies have long cross-promoted titles with videos, the practice seems to have ratcheted up. Such hit videos as Monsters, Inc., The Lord of the Rings: The Fellowship of the Ring and The Scorpion King and even Veggie Tales sport game tie-ins for the fourth quarter.
With fierce competition among the game consoles, video rental stores are playing an important role in allowing consumers to try before they buy. And knowing their penchant for games, game companies are looking to reach the sellthrough DVD customer as well. So while video rental stores have known games and videos work well together for some time, it has taken a slick little disc – DVD – to seal the marriage.
By: Stephanie Prange
Rental revenue has fallen short of same-week activity the year prior for eight straight weeks now, according to Video Store Magazine market research.
And while our very careful and cautious market research team advises me not to read this as a major trend -- yet -- the numbers are beginning to say something about the (possible) changing nature of the home video business.
This week's research report (see page 21) from Melinda Saccone, senior market research manager, mirrors what we have been hearing for months now. DVD's share of rental revenue is rising dramatically, but not enough to counter the similarly dramatic fall of VHS rental revenue.
In July, for instance, DVD accounted for about 40 percent of all rental spending, or some $320 million; that's up from 23 percent at the beginning of the year. Year to date, revenue for DVD rental is up 150 percent over last year at this time.
Meanwhile, rental revenue for VHS in July was down a little more than 40 percent, to about $483 million.
The combined DVD/VHS rental total in July was down some 12 percent from last year. Year-to-date rental spending is down more than 6 percent.
Naturally, one begins to wonder why this is happening and whether the factors contributing to this decline (if we can confidently identify them) are short term or a part of the evolution of the home video marketplace from a rental to a sellthrough paradigm.
Of course, one might think the biggest possible factor would be DVD sellthrough activity taking dollars away from the rental business.
Going into 2002, video sellthrough as a percentage of overall home video revenue had reached parity -- or exceeded it -- with rental. Regardless of whose 2001 year-end numbers you looked at, DVD was already accounting for 50 percent or more of that sellthrough volume. Consider that in relation to the fact that DVD player penetration only reached 25 percent or so of U.S. homes by the end of the year in 2001 and is expected to reach 40 percent or better by the end of this year, and you can see where DVD sales could be going in relation to the overall business.
DVD also has allowed retailers to increase their copy depth of new releases. According to Video Store Magazine market research, retailers carried almost 56 percent more copies of the top five rental debuts in the first half of 2002. This comes, certainly, at the expense of catalog titles, which can bolster rental business during weeks where there are no significant new releases debuting.
These are only a few factors in consideration of what may be a significant trend.
By: Kurt Indvik
The recent signing by the ICM talent agency of two independent DVD producers, Jonathan Gaines (X-Men, The Matrix) and Blaine Graboyer (Scream Special Edition) signals yet another narrowing of the gap between Hollywood and home video.
Indeed, DVD has done as much for the self esteem of home video executives as it has for the bottom lines of the studios, allowing them to transcend the long-held stigma of being in the “used movie” business and becoming an integral part of the creative process.
Extra material on DVD has certainly proven itself to be an alluring selling point to consumers. Study after study has shown consumers like special features and are buying more movies on DVD than they did in the VHS-only days largely because of all the bonus material.
Video Store Magazine's latest consumer survey finds that 67 percent of DVD buyers and 61 percent of renters access special features, and that the longer consumers have owned a DVD player, the more likely they are to view this supplemental material — a finding that to me signifies a sea change in how the public watches movies at home. It's no longer a passive experience, it's an interactive experience, with consumers perceiving DVDs as something new and exciting to fiddle with.
But as excited as consumers are about special features, video executives love this stuff even more because it finally helps them achieve a level of respect in the movie industry that has long seemed just beyond their grasp.
For years, they merely packaged and sold the movies someone else produced, and consumers had already seen.
Now, they're often getting involved in DVD planning while the movie is still in production. They get to talk to directors and other talent and work with them to create a new product of which the original movie, while still the centerpiece, is no longer the whole enchilada.
And in conservations with friends at backyard barbecues, weddings and Little League games, they can proudly say, “I work for a movie studio” without feeling the need to blush and toss in a disclaimer about home video.
Indeed, DVD producer, as my friend Cheryl Glenn told me earlier this year, is the hot new job in Hollywood — and one that's only getting hotter now that the agents are involved.
And with DVD producers still reporting to, or working under contract to, home video divisions, there's going to more and more elevation by association.
Economists and politicians are divided on whether we are headed for a double-dip recession or will turn around by fall. Some speculate it's going to be a weak holiday season for retail, others believe consumers have plenty of disposable income and will unleash spending power.
For our industry, one indicator to watch is the electronics stores. Best Buy revised down twice for the quarter on low sales and other chains are turning in similar results. That could mean fewer DVD players getting into homes, or at least getting there at a slower pace. But even that could go either way: many people may be feeling the pinch right now and holding off on buying the player until the holidays bring sale prices and make it a family gift.
At the risk of getting branded an armchair economist, I have a few little points I watch as barometers of the economy in the real America, where most of us live.
Fast Food: I've noticed that fast food chains are among the first businesses to respond to recessionary times and the last to boost prices when the economy seems to improve. Just last year a variety of cheap deals evaporated in response to rosy economic projections. But they started to return just a couple of months ago and now you can get two burgers or tacos for 99 cents just about anywhere in town.
Fast food restaurants know they fall into a budget dining category and will lose cost-sensitive customers when times get tight unless they keep giving them a reason to come in. The lines are decidedly shorter at McDonald's this week since the chain lifted the 39-cent cheeseburger promotion, which I predict it will return shortly.
Wal-Mart: Wal-Mart sales were up 26 percent for July. That's a whopping bump even for a well known discounter with a respectable-sized garden center to bring in summer customers.
Wal-Mart does a great job of building community. The discounter features sales associates and their families in print ads. It has an entire TV campaign built around senior citizen greeters and families who shop together. The message? We're all in this together.
That sentiment is connecting with Americans who have lost jobs or investments or who fear what the future holds; and that sense of community will keep bringing those folks into Wal-Mart, where we're on a budget and proud of it.
eBay: As both of my loyal readers know, I have been selling stuff I no longer need on eBay since early this year. In the spring, folks were still uneasy about the recession and my items were getting lots of bids. Then things started to look better and, when the general mood was more optimistic, bidding slowed down. Now, with the threat of a double-dip recession looming, my items are trading briskly again.
I think when people feel like money isn't a problem, they just run out and buy new stuff. When uncertainty looms, they tighten the purse strings and cruise eBay for the same item, used.
So those are my amateur economic indicators and all of them say double-dip. I hope the holiday season is a huge success for all of us, but from the way things look now, I'd make sure I had a Plan B.