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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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7 Mar, 2004

Capitalize on the Burgeoning Latino Market

It's been an eye-opening experience developing Cine Mercado, the new quarterly supplement to Video Store Magazine that focuses on the opportunities and challenges in building the home entertainment business serving Latino consumers. The second edition appears in this week's issue of VSM. Also this week in Los Angeles, VSM in cooperation with The Digital Entertainment Group and The Hollywood Reporter, host a conference on Latino home entertainment.

The growth of the Latino market compels retailers of home entertainment to make a serious effort to ensure that they have a strategy for bringing in product that serves their local Latino community and doing the right sort of marketing to let them know it's available.

There are more than 42 million Latinos living in the United States, which makes this the country with the second-largest population of Latinos behind Mexico. The Latino community in the United States is, indeed, a country within a country, and if you are a retailer who happens to do business in one of just seven states that hold half of that Latino population (Arizona, California, Florida, Illinois, New Jersey, New York and Texas), then it's even more imperative that you're attuned to your local Latino community, because they are heavy consumers of entertainment, and they are on a par with the rest of the market in terms of DVD player penetration in the home.

There is a growing supply of high-quality film and television product on home video from Mexico, Spain and many other Latin American countries featuring tremendous talent, star power and audience support that non-Latinos are barely aware of. And considering that 50 percent of the growth of the Latino market comes from immigrants, it's vital that a retailer looks beyond merely stocking domestic hits with Spanish subtitles. If your store is in a neighborhood with a significant Latino population, try and determine if there is a predominant nationality in the local Latino community (70 percent of all Latinos in the United States are Mexican, by the way) and seek out product from that predominant country of origin.

The opportunities with the Latino home entertainment market are significant for those who make a concerted effort to reach out to their local Latino community with the right product mix and the right service. Check out this and future editions of Cine Mercado for some ideas on how to do just that.


5 Mar, 2004

DVD Strategies Must Evolve With the Industry

It’s funny how different studios have different strategies, and how the old ways aren’t always the best way.

Last fall, several studios did things the way they always had — pushed product out the door early in the fourth quarter, with a definite “early bird gets the worm” mentality.

The early bird didn’t. The big winners were Universal and Buena Vista, which waited until December — until the waning days of the holiday shopping season — to release a pair of big titles: Seabiscuit and Pirates of the Caribbean.

Both titles turned out to be runaway hits, affirming the notion that DVD is a commodity business and that many movies are purchased on impulse — or when someone is already in the buying mode.

You can rest assured that in the fourth quarter of this year, December will be a busy, busy month.

This year began with most studios holding off on high-profile product until February or March. Universal and MGM jumped the gun and voila — can you say “mega hit?”

Universal’s American Wedding came out Jan. 2, when New Year’s revelers were still battling their hangovers, and scored big, selling some 3 million units in just three days. Out of Time and Uptown Girls came out a few days later, on Jan. 6, and first-week selloff was reported at 70 percent, putting MGM in the unique position of having to ship reorders.

Again, wait until January 2005.

Most recently, Universal again broke the mold when it went ahead and issued Lost in Translation on DVD Feb. 3, even though the film’s awards buzz had extended its theatrical stay. The result, as Stephanie Prange writes in this week’s Video Store Magazine, was that the film generated an additional $10 million at the box office while selling 1.5 million DVDs, all between the time the Golden Globes were announced and the Oscar nominations came out.

You already know what I’m going to say.

The point to all of this is that our business is changing as we speak, and what worked in the past isn’t necessarily the best path to follow in the future. It will be interesting to see which other rules are broken, which traditions fall by the wayside, as we move forward with 2004.

It should be an interesting year, and one in which a lot of lessons are learned — sometimes, the hard way.


4 Mar, 2004

Sometimes Watching the Making of the Film Is Better Than the Film Itself

I admit it: I'm addicted to the requisite bonus material included in most theatrically-based DVD releases.

Last summer, I rented Minority Report and Catch Me If You Can, two 2002 films from Steven Spielberg that offer above-average behind-the-scenes stuff.

Quite by accident — since the discs were difficult to distinguish between — I watched the bonus material DVD from Report and Catch Me prior to the actual movies.

And in the process, I opened a Pandora's box of entertainment that has altered ever since the way I watch home video.

The more of the bonus material I watch, the less I want to watch the actual movies. To be sure, I did watch and enjoy Report, but not so with Catch Me, in which the bonus material actually trumped the movie.

Notably, “Frank Abagnale: Between Reality and Fiction,” in which the actual Abagnale sheds light on Leonardo DiCaprio's character that turned manipulation and deception into an art form, and “Deconstructing Minority Report, in which an assembly of scientific minds over a weekend debates the universe Tom Cruise' character “Detective John Anderton” inhabits.

Growing up, I remember my Mom, a voracious reader, used to digest books from the back. She told me it saved time.

I once read an interview with Sean Penn in which he bemoaned the existence of “The making of” specials that regularly sprout on TV prior to launch of a major theatrical release.

Among a plethora of evils, not limited to the assault on the viewer's thought and imagination, Penn believed the TV programs diminished a story's creative process.

And I agree. The reality of filmmaking has superseded a film's intended purpose to tell a story.

Have I become so enamored with this “reality” that the story is immaterial?

I'm afraid so.


2 Mar, 2004

Observations From an AFM Novice

Until last week, I was an AFM virgin. I know that's unthinkable to many of you veterans, but it was my first time covering AFM, and I have to admit, I've never seen anything quite like it. So here are a few random observations from a newbie.

Establishing shot: I had a lunch meeting Thursday a couple of hotels down from Loew's Santa Monica Beach. As I walked down Ocean Avenue thinking about the meeting I was about to have, I looked up from my reverie to dodge a fellow walking in the other direction. He was about my height and had wild, stringy gray hair. He was wearing a black overcoat over clothes that looked like he'd fished them out of the trash the day before and slept in them before coming to the event. Just as I was about to dismiss him as yet another of the prevalent dumpster divers around the Santa Monica Pier, I caught a glimpse of the restricted access pass fluttering in the breeze from around his neck.

Most people think the deals get done in the suites. I saw a lot of activity on elevators. People exchanging business cards, setting meetings and giving that last-minute nod to colleagues as they stepped onto elevators (or held them to keep talking, much to the chagrin of the passengers crammed into the cars like sardines). If that ever gets out, nobody will book suites — they'll just hang around the elevators.

In fact, a substantial portion of what happens on the ground floor is people who don't have restricted access passes (even with better clothes than Dumpster Man) trying to get noticed. Sometimes it works: Maverick's Doug Schwab told me he likes to hang around near the ground floor, because he's bought completed scripts or even movies from folks he found there in past years.

It's no secret that box art is the key with video, but the American Film Market (which one wag called the “American Flea Market”) is the proof. Those box and poster shots look so promising, but so many of the movies are a disappointment. It lends a whole new understanding to how some movies get onto shelves even though watching them is a sentence much like the fourth circle of hell.

The one thing I came away with is a much deeper appreciation of what it takes to make an independent film. Not that everyone should be doing it — a lot of people really should heed the “don't try this at home” disclaimer. But I salute the folks just starting out, trying to make a real statement and get anyone with juice to notice their films. It's a miracle some of this stuff gets made at all, and my hat is off to the aspiring indie filmmakers not only for braving treacherous waters, but for hanging on in storms like AFM.


1 Mar, 2004

Translating to Video

One of the biggest Oscar winners on the video front this year is sure to be Universal Studios Home Video's Feb. 3 video release of Lost in Translation, though it only picked up one Academy Award.

Backed by a studio that takes great pride in launching their DVDs with fanfare, Lost in Translation got a sendoff Feb. 3 that included eventual Oscar winner Sofia Coppola (best original screenplay) and an inspired tie-in with a sushi place.

Universal, too, gave best-picture-Oscar-nominee Seabiscuit a push out of the DVD gate with a large party Dec. 15 at the Polo Lounge at the Beverly Hills Hotel, and it will also no doubt receive additional attention from its Oscar nominations, though it didn't rack up a win.

While I'm not saying these DVD campaigns were the biggest influence on the awards season, they sure didn't hurt these two films' prospects, putting them in front of Hollywood audiences when it could do the films the most good in the awards race as well as at retail.

While most fans will have already seen New Line's The Lord of the Rings: The Return of the King, the big Academy Award winner this year, Lost in Translation, is the kind of little film that will attract more interest from the awards season — and lucky for video retailers, that bump will come on video.


29 Feb, 2004

The Growing Home Video Marketing Pressure Cooker

Just last week it was announced that Sony Pictures Entertainment (SPE) and Regal CineMedia Corp., the largest theater operator in the world, had struck a deal where Sony would provide promotional content for Regal's pre-feature program, “The 2wenty” — you know, that 20 minutes of stuff you watch with the lights still up before the 15 minutes of previews. Part of that agreement will include content developed from Columbia TriStar Home Entertainment and, presumably, from its current and upcoming home video titles.

“In a highly competitive and increasingly cluttered media environment, we believe this is a great opportunity to reach out directly to our customers,” said Jeff Blake, vice chairman of SPE, in making the announcement.

It is getting to be a very noisy entertainment marketing environment every week now as home video joins theatrical in anticipating that a movie's first or second week in video (as in theatrical) will generate 50 percent or more of its projected total revenue. That means the marketing push up to that street date is fierce and getting more expensive as DVD becomes an even greater portion of the studio revenue pie.

You can't turn on your TV, open your newspaper or any entertainment magazine and not see advertising for the latest major theatrical release coming to DVD. In certain markets there are billboards aplenty as well. This latest effort by Sony to reach the movie-going public in their theater seats is just the latest maneuver in a home video marketing struggle that is sure to get more intense. Not only are the stakes bigger for studios now on ensuring that the home video release performs well in its ever more limited time in the retail spotlight, studios are putting out more product from the catalogues and these releases, too, must fight for consumer attention in between the barrage of marketing for other videos, films, new video game releases and TV shows.

In Thomas K. Arnold's cover story in this week's edition of Video Store Magazine on DVD marketing, home video executives acknowledge that the marketing budgets for home video releases are growing significantly — as high as $10 million or more in costs for a major title. Couple that with the need to ensure that timing one's street date is getting ever more complicated as the field gets more crowded, and the pressure must be higher to return on those big marketing dollars being bet each week on what is now a year-round sellthrough business.

I don't envy those senior home video execs making the big bucks. What was a somewhat sleepy industry in the latter VHS, pre-DVD years is now a big-time pressure cooker with the eyes of not only the studios heads on you but the business press as well, tracking home video unit success and failures with a microscope.


26 Feb, 2004

My Wish List of Extras for 2004 Anniversary DVDs

With DVD now a commodity business, and movie buyers fast eclipsing movie renters, studios are doing everything they can to stir up the collector mentality among consumers — in the hopes, of course, of getting them to buy more movies and build vast home libraries of DVDs.

For catalog titles, there's no better hook than an anniversary. It give the studios an excuse to dig up all sorts of interesting treasures from the vaults, from vintage newsreels of a film's premiere to original trailers and “making of” featurettes. Film fans are naturally drawn to a great anniversary package, particularly if the studio plunked down a few bucks to clean up the print and round up the remaining cast and crew, if there's anyone left, to record commentaries and interviews.

Sometimes things don't work as planned. In 2002, Warner Home Video's 50th anniversary of the classic 1952 musical Singin' in the Rain was mistakenly labeled the 60th anniversary edition, prompting the studio to have to resticker thousands of DVDs.

Of all the films that this year are celebrating an anniversary ending in “0” or “5,” here are my picks for the five I'd most like to see get the special edition treatment and some of the extras I'd try to include:

5. The Jerk (1979): Steve Martin's funniest movie, true slapstick humor. Any and all outtakes and deleted scenes would be welcome, as would a commentary track from some contemporary comics who have been influenced by Martin.

4. The Shawshank Redemption (1994): One of my favorite movies of all time, and ranked the second-best film of all time on the Internet Movie Database. It's already been released on DVD as a bare-bones edition, but as one reviewer on Amazon.com says, “If any film is screaming for a special edition DVD, it is certainly this one.” Personally, I'd love to see commentaries from Stephen King, who wrote the short story on which the film is based, and director Frank Darabont.

3. Apocalypse Now (1979): One of Francis Ford Coppola's finest moments, a gripping Vietnam War drama with an all-star cast that includes Marlon Brando and Robert Duvall. Coppola was great on the Godfather trilogy DVD — think he'd do an encore?

2. On the Waterfront (1954): Marlon Brando's defining performance as one of the best actors in the history of film makes this a no-brainer, and second-billed Karl Malden, who even though he's 91 just took the stage at the SAG Awards, would provide a compelling commentary, I'm sure. Fans would also like to see something on director Elia Kazan, whose honorary Oscar a few years back raised eyebrows due to his involvement with the Communist witchhunt that dogged Hollywood in the early 1950s.

1. Rear Window (1954): Alfred Hitchcock's classic psychodrama has been out on DVD before, as part of Universal's boxed-set Hitchcock collection, but it's high time for a reissue with bonus materials like a Hitchcock career retrospective (how about trailers for all his films, or maybe a montage of his notorious cameos?).


24 Feb, 2004

Blockbuster's High-Tech Future: Shaken, Stirred or Blended?

Blockbuster Video is preparing for some pretty ambitious initiatives in the coming year. They'll be great if the company can get it all done in enough time to keep the market from passing the chain by, but right now it looks just as likely to me that the promises will be half-fulfilled at best by year's end.

I base that on the degree of difficulty in executing some of the planned improvements. I came to Video Store Magazine from Advanstar's CRM (customer relationship management) magazine, which focused most of its attention on customer service call centers and e-commerce back-end management. A lot of what Blockbuster executives are promising is a lot harder to execute than it looks like it should be on paper.

It's great to be all things to all people, but ask any e-tailer (except Amazon) that tried to have a system up on the Internet in time for the 2000 holiday season and you will learn that it's not that simple. Logistics are difficult at best, even with the simplest model. The Blockbuster plan for “blended commerce” — the CRM term for brick-and-click — is extremely difficult to get working properly. Several companies that tried to race to the Web with simpler systems found out it wasn't that easy and ended up putting out their shingles at Amazon by 2001.

To its credit, Blockbuster has finally caught on to what's growing and what's dying in home entertainment. Efforts to push into games and the used-disc trade — which I distinguish from pre-viewed because PVTs are typically rental selloff, while “used” to me means the consumer trade-in model — are a smart move in tough economic times and a flooded market.

But Big Blue is hardly a first mover in online rental. Although it's only fair to note the chain has been offering “rental by post” in the United Kingdom for some time, CEO John Antioco has repeatedly told analysts that online rental will never be a large portion of the chain's U.S. business. Clearly, moves in that direction indicate that Netflix and other online services present a significant threat, or at least a chunk of market share Blockbuster wants. The little upstart may not be the pushover Blockbuster is hoping.

Like online rental, much of what Blockbuster is trying to do has already been done. But I see two major hurdles in the logistics of integrating online and in-store rentals. As I understand it, Blockbuster plans to let consumers rent online, using stores in the renter's area to ship the product. Then the consumer could return it by mail, at a store or decide to keep it after renting by choosing that option on the Web — an option that would be really cool and a unique selling point if they can make it work.

But I have to have my doubts because of some preliminary steps that are still not in place. First of all, Blockbuster's millions of renters must use their membership cards at the stores where they are obtained; they can't go to another store while on vacation and use the same card. Although CFO Larry Zine told analysts last week that the chain would have that bug worked out by the end of the year, integrating that many customer records in a chainwide POS system is a massive undertaking in itself. Then integrating that with Web functionality and providing customer service support is a whole other can of worms.

Finally, it may seem great in theory to let customers rent from one channel and return at another, but this is not as simple as Best Buy routing an online order to a store for pickup. The transaction has to go full circle. It's less like pure-play Netflix and a lot more like U-Haul, which adjusts its rental prices based on where you rent the truck and where you plan to return it. In the same way U-Haul can't have all its trucks from San Diego, Detroit and Nashville all pulling in for return in Cincinnati on the same day, Blockbuster will have to come up with a system that means online rentals get returned somewhere near where they were checked out if it wants to stay competitive. That will be a lot harder with a blended commerce system, assuming the chain can get it blended at all.

Customer service gurus have a rule of thumb: A satisfied customer tells three friends; a dissatisfied customer tells 10. That's some pretty scary math for a mature business that's trying to change to compete with another mature model. If Blockbuster succeeds, it stands to make some important gains. But if it fails, well, the bigger they come, the harder they fall.


23 Feb, 2004

Theatrical Sticker Shock

I took my daughter to see a matinee of Confessions of a Teenage Drama Queen last weekend, and I have a confession of my own. It was an enjoyable flick, but the sticker shock of paying for a matinee what I used to pay for a prime-time viewing provided some additional drama. Add to that the cost of a drink (about $4) and candy (another $4) and I easily spent $20 — for a matinee!

At the risk of sounding like the old geezer talking about shelling out a nickel for the movies, I can't believe going to the movies costs that much! I can't imagine how I would feel if the movie had been really horrendous — one of those flicks that's not worth the two hours of my time. BR>
No wonder DVDs are doing so well. Heck, going to the movies costs a fortune. For $20, I could buy a DVD, get some really good snacks and have something to trade-in or keep for my library afterward. Entertainment is even more economical if you rent a DVD.<

Theater attendance is flat, and I can see why. It's not a very good value anymore. In the past few years, I've only attended matinees, for the most part, because I considered seeing a movie at night too expensive — not worth the money. Now the matinees seem out of reach.

Last year was the first since 1991 that studios saw box office revenue slip — and that's with the higher ticket prices. I'm betting some of that missing revenue went to DVD.


23 Feb, 2004

DVD Recorders Approaching Mass Market Appeal

Only time will tell if DVD recorders have any significant impact on the home video business. Recording programming legally and otherwise will become more and more affordable in the next 12 months, with some analysts expecting DVD recording units to be available for less than $199 by this holiday season.

Research firm In-Stat/MDR has predicted that sales will ratchet up quickly in the next several years so that by 2007 DVD recorder units shipped worldwide will exceed 50 million units.

But whereas the analog generation could never figure out how to convince their VHS machines to record (and gave up trying years ago), things will be different for the digital era we are in now. Users, mostly younger in age, are already burning CDs by the millions, and in general are much more attune to manipulating technology than people were 15 to 25 years ago. Add to this the fact that DVD recording devices are starting to be paired with other media management services, such as personal video recorders, and you have the convergence of technology that could usher in a new era of digital entertainment creation in the home. Some DVD recorders will have electronic program guides and network connections this year.

Industry pundits see the high-definition format as the packaged media industry's response to these developments, but most don't expect high-definition DVD to be a significant factor until about 2007.

I don't think the baby-boom generation, which is still the greatest force in consumer spending and will be for some time, will be the ones jumping on the digital media management bandwagon. This is still a generation with a packaged goods collector's mentality. But the generations to follow will have to be given ample reasons in terms of higher quality and more content if we hope to convince them to choose packaged media over a personalized media program created by the user, for the user.