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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.


Opinion
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28 Jun, 2004

High Def Cannot Hope to Match the Surge of DVD

Now that some of the bluster over the competing high-def disc formats has died down, I wanted to point out a few other hurdles that may keep any future disc format from re-creating the growth wave of DVD. The stars aligned for DVD in a way the future format cannot possibly match.

Assuming the industry does agree on a common format and times it well without stepping on the current DVD surge, it will never have the advantage of building a sellthrough market the way DVD did. Before DVD, consumers couldn't own every title when it came out. Most titles were priced for rental on VHS. Indeed, a case can be made that the sellthrough pricing of the format was more important to its wide and impressive adoption than the better picture and audio. The increased value of a DVD was a no-brainer for consumers. It sported better quality AND it was available at a low price, while most titles in the established format were not.

We will never see that again. High def will not undercut the price of DVD the way DVD trumped the price and sellthrough availability of VHS. Likely, it will cost more, which could be an impediment to its mainstream adoption.

DVD also had a size advantage over the prevailing format that the proposed high-def formats will not. The little disc was a lightweight compared to the VHS cassette. That meant it could be mailed cheaply and shelved more efficiently. It also spawned Internet sales and rentals. If DVD hadn't been so easy to mail, Netflix would never have gotten off the ground. If the DVD had not been so compact, the TV on DVD genre — in which whole seasons can be put in a boxed set the size of one two-hour VHS cassette — would never have emerged as one of the hottest in the business, with millions of sales never imagined on VHS.

Again, the proposed high-def formats won't have a physical size advantage over DVD. The discs may hold more, but they won't fit any better on consumers' or retailers' shelves. They may hold a few more TV episodes on the single disc, but the difference in saved space won't match the spread between DVD and cassette.

Let's talk extras. DVD had them. Cassettes, for the most part, didn't. That was another big advantage DVD had over the format it aimed to replace.

The proposed high-def formats will offer more extras, but does the public really want them? DVD producers will tell you they can do a lot with the extra space — improve the picture or audio, add more branching, more documentaries, etc. — but I question whether that will be enough to convince consumers to switch formats.

While television's advance into high definition may push consumers and the industry into a new format, it simply won't have the pull of DVD. If the industry is looking for another packaged media juggernaut in high-def discs, it may be sorely disappointed. I don't think we ever see the like of DVD in the packaged media realm again.


27 Jun, 2004

Home Entertainment Technology Parade Continues

Technology innovation and enhancements in home entertainment in this digital era continue at a rapid pace. Some may negatively impact home entertainment software retailers, others may be a positive.

In this week's issue of Video Store Magazine, we cover two such technologies: one being the DualDisc format (DVD on one side, CD on the other), recently given a thumbs up by the DVD Forum, the other the emerging handheld video players being developed by a broad range of consumer electronics companies.

Certainly, the DualDisc format offers an opportunity for both home video and music retailers. Music DVD and the marrying of CD with DVD in two-disc sets is a growth category for retailers. Literally melding the two on one disc is seen as a completely natural new format that will appeal to a broad spectrum of consumers coming into both video and music stores. Is it any wonder NARM and the VSDA are in talks to explore ways of merging the two trade groups? Music is more and more a visual medium, and certainly the music retail business has been quickly building up their video business to offset difficult times in the music business. While music retailers are adopting the video business in a big way, I often wonder why I don't see more video retailers building up bigger music DVD sections in their stores. There is certainly no dearth of product. According to the DVD Release Report, there are almost 3,500 music DVD titles available. I think the time is ripe for video retailers to truly embrace the music DVD business in a significant way.

Meanwhile, as Americans take to the roads this summer, doubtless video retailers are probably seeing parents coming in to stock up on an armful of DVDs for their portable DVD players and car-based video systems as they drive and fly to summer vacations with the kids. “America has begun to embrace mobility,” said Amy Dalphy, manager of hard drives at Toshiba, in this week's article looking at the future for handheld video players. The conversion and compression of video files onto hard-disk drives and other storage platforms is being aggressively pursued by all sort of consumer electronics manufacturers.

The reason? A whole generation of consumers who have grown up text messaging each other on their cell phones, downloading and digitally storing music on their iPods and using PDAs for everything but dry cleaning their clothes are rapidly approaching the beginning of their serious earning and discretionary spending years. Not put off by the small-screen experience, they will be the vanguard for adoption of a handheld video entertainment. The kids now in middle school will doubtless be even more rabid consumers five to seven years from now. By that time, home entertainment retailers may want to stake some sort of position in what may be, by then, the beginning of a significant market. Whether it means offering digital downloads or the hardware itself, there may be opportunities in what looks like a possible threat to packaged media.


25 Jun, 2004

A World Without Windows

Bold moves are conspicuously absent in this business, but I wonder what would happen if some studio abolished windows and released everything on the same date theatrically, on home video and on pay-per-view.

We're already headed in that direction. Theatrical-to-video windows have shrunken from a norm of six months to an average of four months, while most big releases wind their way onto PPV about 30 days after their video debut.

What's more, research — and, to a lesser extent, experience — suggests theatrical and video are two distinct audiences. I need only point to Universal's Lost in Translation strategy, in which the film came to video while it was still in theaters. Granted, the theatrical run was extended by awards buzz, but the result is still pretty phenomenal: 600-screen expansion and 1.5 million DVDs sold — all during the exact same time frame.

So what would happen if everything went day-and-date? My hunch: A moderate increase in overall revenue, but a much-faster payoff — and significantly lower marketing costs because studios would only have to fund one campaign, not two or three.

And for a film like Spider-Man 2 or Shrek 2, the overall combined theatrical, DVD and PPV payoff could be significantly higher if all three platforms came to market at the same time. Kids would race to the theater to see Spider-Man 2 on the big screen, and then stop at Wal-Mart or Best Buy on the way home to buy the DVD so they can see it again. Studios would get the chance to strike twice while the proverbial iron's hot.

A same-day pay-per-view showing would simply give consumers a third option. And please don't float that old argument that PPV hurts video. B.S. If anything, under the current structure, PPV helps video by rekindling interest 30 or 60 days after the video is out. Watch the movie on PPV and if you really like it, you'll head out and buy it or rent it. A PPV screening has become almost like an infomercial.

Will a world without windows ever become a reality? Six months ago, I would have said no, it's too radical a concept. But you know what? Six months ago I never would have guessed that movies as well as videos typically earn 40 percent, or even more, of their total revenue their first week out.

We're in the Age of Frontloading. So we might as well put everything we've got into it.


23 Jun, 2004

Armstrong Pedals Onto Big and Small Screens

In case you missed Lance Armstrong playing himself in Dodgeball, last week's No. 1 box office movie, you can check out next week's start of the 91st Tour de France bicycle race, where Armstrong will attempt to become the first person to win the three-week event six times.

Austin, Texas, native Armstrong, who overcame advanced testicular cancer in 1997 and last year became only the second person to ever win the Tour five consecutive times, is no stranger to video.

The 32-year-old professional cyclist's exploits, including U.S. races in the mid-'90s, documentaries, interviews and European competition, are available on DVD/VHS from World Cycling Productions, St. Paul, Minn.


22 Jun, 2004

Rental Predictions Under Attack

I received just two letters about my column of a few weeks ago on how VHS and rental are dying, and they were both from exceptionally lucid rentailers who asked to remain nameless.

They disputed my conclusions and, in well-reasoned e-mails, told me about how their businesses are doing well. I believe them, but I still think they are the exceptions, not the rule (even though the discussion raised the point that a crappy release slate will disproportionately affect the hit-driven public chains).

Both of the dealers who wrote to me said their rentals are up about 12 to 13 percent. Both said those figures were rentals only — no PVT sales — and that the increase they quoted was for non-adult product (one did the calculation without including adult, the other does not carry adult product). Both questioned where we get our numbers, how we can possibly say that rentals are down. It must, both asserted, be some kind of error. “Remember that close to half the rental business is done by mom-and-pop [stores] who generally fly under your radar,” one suggested.

A valid point, but then how do you fellas account for this week's research information? Video Store Magazine Market Research surveyed 200 of those mom-and-pops and found that two-thirds of them expect business to be down in the second half of the year. Those indies expect rental business to be down as much as 20 percent in the second half of they year.

OK, the glass is also a third full: I would guess that my letter writers are among the 38 percent of indies surveyed who expect rentals to go up in the second half of the year — which, by the way, starts a week from tomorrow.

So let's hear it, folks. Are you part of the 62 percent that expects a rental decline between now and New Year's Eve, or the 38 percent who say business is going to pick up? Tell me why. There's a link below. All you have to do is click on “Reply to this Article.” C'mon, you know you want to ...


21 Jun, 2004

Home Theater Getting Closer in Value to Theatrical Experience

Despite being in the video business, I used to frequently tell people to see special effect-laden or panoramic films on the big screen. “You really have to see it on the big screen,” was the typical comment about big event films. But as the home video and home theater experience has increased in value, the theatrical experience has actually lessened in value — making the two more comparable.

If you live in a big city, seeing an event film on opening weekend means standing in line for a considerable time to get a good seat, paying close to $10 per ticket (more if you order them through some service like Fandango to ensure your seat) and being subjected to numerous advertisements (and I don't mean trailers) before the film. My husband and I recently saw The Day After Tomorrow and felt we could only justify the cost in both money (babysitter included) and time if we saw it on IMAX — the biggest screen possible.

I recently wrote a column about my decision to forego seeing the Lord of the Rings finale in theaters and wait for the DVD. It's a long film, and I ended up viewing it over two nights on disc, which to me was a more enjoyable way to consume the Academy Award-winner. I think I enjoyed it more without the hassle of the theater. It's one of my favorite films of the year — even though I didn't see it on the big screen.

Film fans with home theater setups more elaborate than mine (which isn't very) would likely find it hard to pass up watching a DVD in the comfort of their own home in favor of trekking to the Cineplex to suffer sticky floors and crying babies.

While Americans won't likely abandon the traditional pastime of going to the movies, the theater in their own home is looking better and better.


20 Jun, 2004

A Look Back Before Our Leap Forward

When you pick up this week's issue of Video Store Magazine, you'll notice a certain heft to this edition. You can attribute the weight gain to 25 years of publishing, which we celebrate in this, our 25th anniversary issue. This is the biggest regular tabloid issue of VSM since the magazine converted to tab size in 1993.

This publication would not have survived its first year of life (as the large majority of magazine launches fail), nor would it have flourished for as long as it has without the support of its readers and advertisers. All of us here at VSM are grateful for both, and we work hard to earn that continued support every single week.

Beginning on page 21, we celebrate not just the magazine's history, but also the history of the home entertainment industry. From the early days of hi-fi shops selling VHS and Betamax movies and the battle over the First Sale doctrine, to a burgeoning rental business and VHS' heyday, and now the industry's resurgence with DVD and transformation from a pure rental model to one with a major sellthrough component. Through it all, VSM has been there to cover the news and explore the issues.

The effort involves the hard work and dedication of a talented group of editorial, research, design/graphics, advertising and production team members who have to, without fail, deliver on deadline, 52 weeks out of the year.

We are stewards of an important information and news source for the industry that was started 25 years ago and has been passed along by many dedicated and talented people through the years. Like all good stewards, we here now strive to improve on their efforts, as will future VSM staffs. Helping in this endeavor is the invaluable contribution of VSM veterans who bring a wealth of industry knowledge: sales executives Denis Cambruzzi (20 years with VSM) and Julie Savant (16 years), group editor and associate publisher Thomas K. Arnold (13 years), publisher Don Rosenberg (10 years) and executive editor Stephanie Prange (10 years).

The rest of our great editorial and design team that delivers a quality news magazine every week — and the terrific research group that provides so much exclusive data to the industry — all share the same goal: to serve the home entertainment industry. Now, we look forward to the next 25 years.


17 Jun, 2004

TV on DVD is the Perfect Fit for Viewers' Hectic Lifestyles

The TV on DVD phenomenon, studio leaders concede, caught them by surprise. “Complete season” sets of contemporary as well as classic series continue to be released at a frenetic clip.

The latest studio speed racer to enter the fray: Universal Studios Home Video, hungrily eyeing all the opportunities for programming made possible by its studio parent's recent acquisition by NBC.

Indies, too, are stepping up their efforts in the game, with Image Entertainment preparing a lavish new high-definition package of the entire “The Twilight Zone” series — “complete season” boxed sets are slated to roll out beginning Dec. 28 — and First Look Entertainment dipping its artsy toes in the TV arena with “Unsolved Mysteries.”

The other day, as I was talking to a friend about the upcoming second-annual TV DVD conference (shameless plug alert: it's set for Oct. 19 at the Wyndham Bel Age in West Hollywood), he asked me what I considered to be a surprising question: “How long will it last?”

I told him what I'm going to tell you: This is not one of your flavor-of-the-week trends, but a vital new industry capable of not only regenerating itself, but also of changing the way consumers watch TV.

Let me explain both points together, because they really are interrelated. We're never going to reach the point where the market is saturated with TV product, simply because each year there's a new season. Classic TV series sell OK, but the really big sales numbers come from top-rated contemporary programs like “C.S.I.” and “The Sopranos” that are still going strong on the tube. Shortly after a season ends, it winds up in a DVD package — and there are plenty of fans, me included, who have never seen a single episode on broadcast or cable TV. We like to watch our favorite series on DVD, when, where and how long we choose. Maybe the timing isn't convenient, maybe we suffer from adult ADD and can't stand wasting our time watching commercials — in any event, we follow each show as rabidly as regular viewers, just on DVD, one or two steps behind. When a new DVD season comes out, we're glued to our screens just as religiously as our TV-watching counterparts are when the fall TV season starts. And when it's over, we're just as impatient for the next season to come our way.

In the future, I only see people like me increasing in number. We Americans have become increasingly time-pressed. Our workloads haven't gotten any easier with the advent of cell phones and e-mail and PDAs — to the contrary, they've gotten harder. On top of that, we have children with full social calendars and aging parents who need attention as well. We can't be tied down to watching “Alias” every Sunday night at 8 p.m., and DVD lets us schedule the viewing time and brings the added benefit of no commercials.

We're already seeing minitrends develop in the still-burgeoning TV DVD market. Miniseries. Hallmark Hall of Fame specials. Old variety shows like Johnny Carson and Sonny & Cher, through a mail-order company called Respond2Entertainment.

Lately, a flurry of reality-TV shows have come out on DVD, including “Cops,” “Big Brother” and “Survivor.” To me, that's the ultimate salute: disposable TV is being archived, bought and collected.

What's next — DVDs of vintage TV commercials? Don't laugh. Already, smart programmers are including period TV spots and promos on DVD collections of classic TV shows. And since March, two suppliers, GoodTimes and Koch, have actually released compilation DVDs of commercials: World's Funniest and Cleverest Commercials from GoodTimes and Hit Celebrity TV Commercials from Koch.


16 Jun, 2004

The Union of TV and DVD Has Been Fruitful

For TV addicts like myself, summer can be a very long dry spell of limited new programming. Don't get me wrong, I like reruns, they just don't yield the same level of excitement as the regular season.

On one hand, it's good — it kind of forces you to do other stuff. On the other hand, now there's DVD to fill the gap. I've been thinking about filling the new programming holes with some TV on DVD product I have for shows I've yet to get into, like “Monk” and “Nip/Tuck.” I'm just afraid that come fall, I'll have added a few new TV obsessions to my already long list.

I was watching network TV the other day (I have to, it's all I allow myself to have) and saw a couple of commercials for cable programming that I think could have an effect on TV lovers like myself.

The first was a really ingenious ad in which Tony Shalhoub, who plays the titular germphopic, obsessive-compulsive cop from “Monk,” and Anthony Michael Hall, “The Dead Zone's” hunky psychic who can read people's futures by touching their heads (from what I gather).

Both shows air on the USA Network, and in the commercial, “Monk” is chatting to the hunky psychic and says something to the effect of “Well, do you really have to touch them to do it?” kind of squeamishly.

It's funny, and it kind of made me want to order cable so I could watch these two. It certainly made me want to rip open the DVD sets I own for both of these shows. Incidentally, Monk: The Complete First Season and The Dead Zone Complete Second Season recently hit DVD — and although the commercial didn't mention the releases, I'm willing to bet more than a few shoppers who saw it will notice these two releases the next time their browsing through DVD shelves.

The same goes for the recent TV ad I saw for “Sex and the City” on TBS. Apparently, the network is really concerned that people know the show is still going to be steamy even with toned-down content for non-HBO language and nudity standards. Hmm. To me, that commercial kind of highlighted the difference even more and could potentially steer “Sex and the City” newbies to DVD instead. After all, pretty much anyone knows that in the time it takes to say Manolo Blahnik they can see and hear the “City” girls bare it all in any number of HBO's complete-season Sex and the City DVD sets.

It's all about choice, and the TV programming format and DVD have been building a very close relationship lately, one that consumers will get the most choice out of.


15 Jun, 2004

What If They Came Out With High-Def DVD and Nobody Cared?

Buena Vista Home Entertainment president Bob Chapek describes it as a train wreck waiting to happen. Others have described it as a showdown or even an arm-wrestling match between Warren Lieberfarb and Ben Feingold.

I call it a pipedream, for a handful of reasons. But we're all talking about high-def DVD and the competing formats that content companies hope consumers will embrace, enough to go out and replace their standard DVDs with the new products when they come out.

Everyone agrees that a format war will kill next-gen DVD. It will confuse consumers — remember Betamax vs. VHS? Remember DVD-Audio? Oh yeah, we don't have to remember DVD-Audio, it's still out there, but mostly as a casualty of a music DVD format war.

But I don't think that's all that is working against a new format. It's easy for those of us in this industry to forget sometimes that there is a rest of the world out there. Yes, folks, there is a real world, and Hollywood is decidedly not it. For one thing, a lot of folks, especially at the top, are pretty insulated from the economic realities the rest of the country faces.

Has anyone noticed that all the logos on the Blu-ray group's member announcements are companies with an interest in selling us new hardware? Take a look at Sony's financials, for example. The company's hardware division is circling the bowl. With no new game consoles in the near future, the company is scrambling to bolster its consumer electronics revenue.

DVD came about as the stock market runup of the 1990s was reaching its zenith. People had plenty of money in their hands. At the same time, Chinese technology and manufacturing was bringing down the cost of DVD players much faster than the cost for VCRs dropped. Even after the stock market crash, a lot of people could afford DVD players. Then there has been a real estate boom. A lot of people with new homes or new money from their refinanced loans had money to outfit media rooms and install home theater systems.

And let's not forget, VHS was 23 years old when DVD arrived on the scene. Even with player prices now almost ridiculously low, there are still millions of homes that are DVDless.

The difference between VHS and DVD picture quality is night and day. The difference is obvious without any special expertise or a trained eye. With the high-def formats, not so much. These new formats will appeal to the kind of audiophiles who think stereo systems aren't complete without equalizers, but the improvements will mean little to the average consumer.

And Americans are headed for thriftier times. There is no economic fuel on the horizon to drive another boom, and a lot of people will be unwilling to switch to another format just 10 years after the last one was introduced, especially when it means giving up the most affordable entertainment systems in recent history for something much more expensive.

DVD's success is based on accessibility — accessible content, bonus materials and, most of all, accessible pricing. Even if all the competing interests can agree, there's nothing to guarantee that consumers will want the new format.