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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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13 May, 2002

THE MORNING BUZZ: Control Freakin' In Hollywood

It's all about control.

I'm speaking, of course, about the studios' ongoing efforts to retool distribution – and their renewed push to foist revenue-sharing upon retailers at a time when many thought the beast was dying.

When the video industry was born just months shy of a quarter-century ago, studios fought like mad to stifle the burgeoning rental business. They implemented rental programs, issued different cassettes for sale and for rent and poured huge wads of dough into Congress in an attempt to repeal the First Sale Doctrine.

Ultimately they lost and the retailers – and arguably, the consumers – won. Retailers could buy cassettes from the studios and do with them pretty much what they pleased – with the studios powerless to tap into the flow of rental revenue.

The studios have never gotten over this, and they've been trying to regain control over what they perceive as their “intellectual property” ever since.

That's why when Blockbuster first approached the studios in the summer of 1997 for ideas on how it could front-load more product on the cheap, they said, “Revenue-sharing, of course.”

With that “in,” the studios then tried to get everyone to revenue share. This attempt failed miserably, but in the meantime something else happened to divert their attention: DVD.

DVD was envisioned to be a sellthrough item only, with the studios controlling the kitty.

But once again, the studios had the proverbial rug pulled out from under them, with a boom market in DVD rentals developing even though the studios had thought the low price would keep the retail spotlight on direct sales to the consumer.

As if to add insult to injury, rental dealers began subbing cheaper DVDs they bought outright for higher-priced VHS cassettes, causing the studios to not only lose control, but also to lose money.

This brings us to the flurry of distribution and pricing changes we're witnessing – and believe me, this is only the beginning.

The end goal, I believe, is to kill off rental VHS completely – which shouldn't be hard, giving the mass transition to DVD that's got pundits proclaiming parity should be a year away, at the most – and price DVDs so low that consumers will gladly shell out a few bucks more to own a movie rather than make two trips to a video store to rent one.

Then, for any retailers who still want to rent movies, DVDs will be available through revenue-sharing only – very likely, differentiated in some fashion from sellthrough DVDs.

Retailers who rent sellthrough DVDs will be punished – probably through a mechanism that involves consumers, much like the piracy warnings on VHS screeners (“If you rented this movie, please call our hotline – anonymity assured”). Shipments of future titles may be withheld, ad dollars may get yanked – you get the picture (but the retailers won't).

And the control issue will at long last be resolved.


What do you think will be the studios' next step in getting control of video product? Tell us here.


10 May, 2002

WORKING WEEKEND: Being Potter-trained by a DVD

My kids belong to one of those new minority groups. They are not Harry Potter consumers. That's an apt term for the legion of fans that has virtually consumed the four novels to date, making British author J.K. Rowling bloody rich and the Harry Potter movie a box-office record-breaker … until that not-so-itsy-bitsy spider guy crawled along last weekend.

At its essence, good marketing is ineffable – its charms cannot be rationally explained. That just about sums up my gut reaction to Warner Home Video's Harry Potter DVD package when it arrived. There's something about the property's logo and the rest of the key art – which appear on the DVD's outer jacket and again on the two-disc, eight-panel gatefold package – that not only reinforced its well-established appeal but, in my case, extended it.

Further proof is that my 11-year-old Elissa, obviously a Muggle like her old man for her Harry-defying consumer behavior, at first professed she was indifferent to watching the video. Then, with the DVD box lying around the house seductively in that come-hither pose, she asked to watch it, and liked it.

I have my own method of madness in sampling DVDs. I'll be online at the desktop in the den, with a vestpocket home theater to the side – TV, DVD and VCR.

When I had trouble finding my way around the presumably kid-friendly if (in my case) adult-stumping Disc 2 DVD-ROM – with all manner of games and places to explore – I simply put on the Disc 1 DVD-video containing the movie itself and located the chapters that would give me the clues to continue navigating with some trace of dignity.

Is this sort of TV-PC tandem-tasking so unusual? Not if you believe recent research by Jack Myers, a television industry market analyst, that shows a significant percentage of people have their TV and PC in the same room.

This personal adventure also made me realize that even without reading the book I was learning pertinent details about the colorful subculture that is Harry Potter. It almost makes me want to pick up one of those bestsellers – almost.

The object lesson, perhaps, is that, when used proficiently by content developers, DVD is a publishing platform as much as it is a movie on a silver platter.

DVD also is still a nascent and temperamental technology. Potter marks the first mass-market application of something branded One-Voice that allows the PC user to talk his way through parts of the DVD-ROM by barking instructions into the PC microphone.

There is definitely a learning curve in using this cool application, but kids will get a big kick out of it when they do figure it out. I also experienced parts of the DVD-ROM where the synthesized voices exhibited the audio equivalent of pixelation, akin to a vinyl record skipping. And in one or two instances, when I clicked on the microphone function, an error message told me to insert the DVD into a PC, where it already was.

But that is as likely a function of my computer. Even when DVDs are authored and replicated with optimum quality control, there is no accounting for how a title will perform in the wide range of computer hardware out there.

Warner Home Video deserves its props for loading its Potter DVD with enough interactive DVD-ROM and WebDVD activities to engage all those precocious Potterphiles who'll be buying this digital-in-the-round phenomenon come May 28.

MGM Screeners Different Than Finished DVDs
I was both wrong and right in what I wrote here last weekend about MGM's trailers on No Such Thing and Hart's War.

Wrong in implying that consumers watching those DVD titles would be unable to use the MENU function when in the trailer park at the head of the program. Right in stating I was not sure whether this was a new policy and we'd check into it.

Well, MGM has graciously clarified for us that the screener DVD copy sent to media types (that would be me) is the same “announce package” sent to retailers to aid in their buying decisions.

It is understandably both costly and time consuming to encode menu navigation into the prerelease screeners, which are shipped well in advance of the title's street date. MGM assures us that the consumer copies of all its DVDs offer the user full MENU activation when watching the trailers.


9 May, 2002

THE MORNING BUZZ: Market Tensions Grow as DVD Continues Its Ascendancy

Over the past several months we have been covering a number of stories here on Hive4media.com and in Video Store Magazine that I think paint an interesting picture of the market tensions in the home video industry.

On the one hand, we continue to celebrate DVD and its continued growth in the market, which has revitalized the home video industry like nothing else. This week's grand event in London heralding the upcoming DVD release of Harry Potter and the Sorcerer's Stone illustrates the growing importance Hollywood is placing on the little digital disc. The creative community is also embracing the format in ways that will lead to further advancements in DVD programming and, thus, contribute to greater consumer demand.

But as DVD continues its ascent to the dominant format for home video, it is causing a lot of turmoil within the industry. This comes to light in the number of stories we have done on the major studios' and other suppliers' continuing pricing and distribution maneuvers as they try to find a way to maximize their profit potential from DVD; in essence it's a struggle for control of what they see as slipping margins on a highly successful and growing home entertainment product. Those struggles include how low to price DVD new releases and catalog product, what to do with VHS and the studios' continuing realignment of the distribution network as they choose to use it for both the rental and sellthrough markets.

The trends seem to be coming into focus. We can expect to see more studios and other suppliers take some fairly radical steps to recapture as much control of the total home video distribution process as they can, especially as it pertains to rental, to ensure they leave no money on the table.

Meanwhile, retailers are also battling on the pricing front, fueled by DVD's entry into the market as a sellthrough product. Mass merchants are pricing new theatrical release DVDs as loss leaders, at least at street date, to attract more buyers into their home video sections where they can find a wide selection of heavily discounted DVDs (and some not-so-discounted catalog product, actually). In response to the price wars on DVD, specialty retailers are responding with aggressive used DVD promotions. In a Video Store Magazine front page story this coming week we explore the concern that the industry is prematurely devaluing DVDs as it tries to maximize its return on what is, at the moment, the hottest consumer product in the world.

In its fifth year, DVD is dramatically changing the landscape of the home video business in ways that are both exciting and, depending on your viewpoint, perhaps a bit foreboding.


7 May, 2002

THE MORNING BUZZ: All That Entertains Is Not Movies or Games

Hi, My name is Holly and I am an eBay trader.

I am confessing an addiction, after a fashion. Last week I was relating my experiences with marketing my junk – uh, stuff – on eBay. My auction experiences have only strengthened one of my theories about online entertainment: that all that entertains is not movies or games.

I think that's true in a way studios may underestimate.

Sure, file trading copyrighted material is a problem, if you measure it by download volume (then again if Morpheus used the DirecTV method of customer counting, all those software downloads may be no threat at all). But there is not, at least today, any organized way of finding out how much of that downloaded stuff actually gets played.

Now I'm sure this idea makes studio folk scratch their heads. “Why…” they must be thinking, “would anyone download a copy of Shrek they would never watch?” (That's surely what I thought when DirecTV announced its customer figures included people who bought the dish but never subscribed to the programming.)

Well, now I know. It's partly my fledgling eBay addiction that brought this lesson home to me; it was partly from observing file traders and their comments on a variety of electronic bulletin boards.

I never thought I would make a fortune selling on eBay. Of course everyone dreams of finding some incredibly rare item in the garage that will make them rich. The Publisher's Clearinghouse prize patrol hasn't pulled up to my front door yet, either, but life goes on. Getting rich was never the point.

Throughout history, men have been the hunters and women have been the gatherers. I think this is why I and many of my female friends don't have the patience for file trading. It seems so very low yield.

Stephanie Prange, our executive editor, made a similar comment about my eBay adventures. “You probably spend more time than it's worth to do it,” she sniffed critically.

But to a hunter – and I am partly guessing that most of the file traders are male and somehow genetically hardwired to hunt – it isn't always about what you get. It's about the hunt.

I think a lot of file traders never watch the movies they trade, at least not all the way through. They just want better copies, or faster downloads, or whatever prize wins the chest-beating rights. They don't actually care what movie it is, as long as they can get it better or faster than the other guy.

I swear, I think I could tell a file-trading guy friend that The Way We Were is incredibly hard to find, difficult to download or some other ruse and he would spend days – weeks, if necessary – pursuing a quality copy for me. Never mind that I could still rent it at some mom-and-pop stores for 99 cents. Men swap files for the same reason they don't ask for directions. It's not about the destination or how long it takes. It's about the conquest, the victory.

That makes file trading both more and less of a problem than studios think. Less, because much of what is being swapped or downloaded is probably never getting viewed, or is spurring sales of better (legal) copies.

What studios should really be afraid of is that to people engaging in file trading, just like I spend weekends selling stuff on eBay, it's an end and a form of entertainment in itself.

The real threat to the studios isn't that people are trading copyrighted material, it's that they would rather trade it than watch it.


6 May, 2002

THE MORNING BUZZ: Franchises Are the Entertainment Equivalent of a Sure Thing

Since the breakup of the studio system, film companies have been looking to reinvent those hallowed decades when they had firm control over creation and distribution of their product – the closest they would get to a sure thing. With the newest studio mantra – franchising – the film companies may be onto something.

Harry Potter, The Lord of the Rings, Spider-Man – these franchises look to rule the movie and home video roost for some years to come -– not to mention older properties, such as Star Wars and James Bond, which are still vital and churning out new entries annually.

Luckily, on the home video front, we've got the perfect product for this new era in sellthrough-priced DVD. Franchises are made to be collected and DVD is a great video medium for collectors. It packages neatly (a seven-disc set of Harry Potter movies would be quite unwieldy in cassette form). Its extras can pump up future and past installments in the franchise. In addition to collecting the feature films, consumers can collect previous incarnations, such as old Spider-Man or Lord of the Rings cartoons.

Movie and, indeed, video release slates are planned for many years to come, ostensibly smoothing out the erratic ups and downs of one-off productions. This should help the rental business as well, which, like theaters, depends on a steady stream of new release hits to power it.

Yet, this Pollyanna can't help but point out a few possible pitfalls. J.K. Rowling, author of the famed Harry Potter series, is behind on the latest book installment, according to The New York Times. After turning out four books, one a year, she won't deliver Harry Potter and the Order of the Phoenix this July and it could come out after the next movie, due in the fall. That means – horror of horrors – no new Potter installment between the video (May 28) and fall movie. Will the Potter momentum slow?

Also, what's to say a franchise won't fade? The last few Batman movies lost their luster. Indeed, a colleague noted his teenage son and his friends would likely see the next Star Wars installment, but weren't nearly as excited about it as they were about Spider-Man. And what ever happened to the year of E.T.? That endearing Steven Spielberg film didn't seem to have enough gas to run a yearlong promotion. Now, that's what I would have called a sure thing.


6 May, 2002

THE MORNING BUZZ: DVD's Extras May Save the Day Again

We've heard a lot of talk over the years about how video-on-demand will eventually kill home video.

Has anyone ever considered that DVD might kill video-on-demand?

The wave of VOD trials and rollouts going on in markets all over the country have this in common: customers can click and watch any movie from a “virtual library” of titles for 24 hours, with full pause, rewind and fast-forward features, at a cost of about $3.95 for new releases and $1.95 for older films.

I can see where this might be a tantalizing proposition for renters, although the key variables, in my mind, are the size of the selection and how much the consumer values the shopping experience.

But considering the plummeting street price of DVDs – catalog titles are selling for as little as $5 or $6 at chains like Wal-Mart and Best Buy – and prices coming down on DVD jukeboxes, an argument might be made that an affordable and equally convenient alternative to pay-as-you-go VOD might be a home library tailored to your specific tastes, with all your discs inserted into a changer capable of holding, say, 300 movies (Sony already has a CD changer with that capacity).

It's the same concept—hundreds of movies at your fingertips—but it won't cost you every time you want to watch something. And let's face it, some movies – particularly those geared toward kids, but also some of those complex grownup movies like The Matrix and Memento – do warrant repeat viewing.

The same goes for older movies—I happened to watch the DVD of an old Western epic called How the West Was Won, and I was so enamored that over the subsequent nights I watched it again with my wife and then let my parents borrow the disc so they could watch it as well. Now my kids are into it and that film has probably been seen 10 or 12 times—which would have cost a fortune on VOD.

And then there's all the special features that come with DVDs, that VOD will most likely never be able to approach, much less replicate. The behind-the-scenes interviews, the “making of” documentaries, the deleted scenes and commentaries – dismiss it as much as you like, a lot of this stuff does get watched.

What's more, thanks to DVD, the American public is getting acclimated to “movies and more.” Rent or buy a DVD and you typically get four to six hours of entertainment, instead of the 90 minutes to two hours from the movie alone.

When VOD finally rolls out nationally, will Americans still have an appetite for vanilla?


3 May, 2002

WORKING WEEKEND: Digital Hollywood's Analogjam

If the movie studios want to slowly but surely typecast themselves as out of touch with the digital generation, they should continue their practice of forcing preview attractions on DVD viewers.

Late one Saturday night, I started watching MGM's screener of No Such Thing, directed by Hal Hartley. It's an off-center, stylized monster tale that also satirizes the banality of mass media. I was paying enough attention to the trailers to maintain my professional – as well as neighborhood – standing as well informed about coming attractions. I had no good reason to skip past them. Good trailers can serve as entertaining shorts … in small doses. A lengthy string of them can end up looking like trailer trash.

About 60 minutes into No Such Thing, I decided I had to get some shuteye. So, I stopped the DVD, looking forward to resuming it the next day. When I did, and the same trailers started playing, I impulsively pushed the remote's MENU to get back to the movie. Alas, that little open-faced hand, the universal symbol of “Oh, no, you don't!,” popped up in the screen's upper left corner.

I finally figured out the FAST SCAN function would at least speed up the trailers to 8X normal speed play, so finally I was on my merry way back to watching the movie itself. But by then, I had felt as though my free will had been co-opted by an inability to skip commercials I already had seen once, thank you.

I'm not singling out MGM by any means. Other studios have tried the same thing. And I say tried because there's no confirmation that this is yet considered standard policy. They must be testing it, right? We're investigating the answer to that question at this writing. (The MENU-disabled trailer fixation also was present on Hart's War, another MGM screener, yet on previous MGM movies for public consumption, the viewer was not trapped in a trailer park.)

The lengths to which a rightsholder goes in the name of controlling intellectual property is understandable – in theory. I'm not one of those “content is freeniks” who think once I take somebody else's IP into my legal embrace I can do anything I want with it. But, the studios' insidious insistence on turning trailers into unstoppable forces of nature makes even this longtime studio sympathizer also sympathize with those who resent Hollywood's more ham-handed, control-freak tendencies.

This intrusive approach to digital ergonomics – disabling a DVD's menu option just long enough to peddle product – also betrays Hollywood's one-track thinking. Since tinseltown specializes virtually exclusively in feature-length (film) and episodic (TV) narrative entertainment, it has not shown affinity for a digital media mosaic in which shorter form and even freeform entertainment will emerge to challenge the allure of popular arts from another century.

In the contexts of short form and freeform – which may or may not be linear and are enabled by digital devices such as DVD and other digital players – the digital generation consumes content in bits and pieces, the very cell structure that differentiates digital media from the irreducible wholeness of analog media.

Nobody intimate with the inner workings of Big Entertainment Inc. is silly enough to think it is about to abruptly wax magnanimous and hoist the flag of freedom of choice. Just ask any AOL subscriber who thinks (s)he has logged off the service, only to find AOL blocking the exit – like a rude host or a bully – with yet another sales pitch it's rubbing in your face. In another act of seeming desperation, AOL doesn't let you go directly to e-mail or wherever you're headed when you first log on either, employing the same kind of overly pushy salesperson ploy as “The Attack of the Tiresome Trailers.” Considering the checkpoints encountered when visitors are both entering and exiting its fortress, AOL's new slogan should be, “You've Got Jail!”


2 May, 2002

THE MORNING BUZZ: New Line's Infinifilm Pushes DVD's Potential

On the drive home earlier this week I heard an NPR news story about legislators and regulators looking for a way of developing some system of compensation for persons who are willing and able to donate bodily organs. (Stick with me here, there is a home video angle.) There is a huge demand for transplant donors and not nearly enough organs to go around. It is against the law to sell one's bodily parts to be harvested either while you're alive or at death, and other than the altruistic satisfaction of voluntarily providing a non-life-sustaining organ to a relative or friend in great need, or simply offering your bodily parts at death, our society has no way of encouraging people to donate them. Our national transplant system right now is win-win-lose. The patient wins, the doctor performing (and being paid for) the surgery wins, and the donor, well, loses an organ. Our society needs to find some way to reward or compensate donors, short of hard cash, and those options are being explored.

Made sense to me.

I hadn't given this issue much more thought until I saw a press release announcing New Line Home Entertainment's July 18 release of John Q. on VHS and in the company's unique Infinifilm DVD (prebook June 18) format. John Q. is the story of a hardworking family man whose health insurance does not cover the heart transplant his dying son needs. Needless to say, the father cannot afford the likely six-figure surgery either, so he takes desperate measures to do what it takes to save his son's life.

I believe that DVD will continue to evolve into an art and media form all its own, and the New Line's Infinifilm approach is a terrific example of this evolution, especially as it relates to filmed entertainment whose plot and themes revolve around a social issue or historical moment. The result is a richer, more deeply layered entertainment experience.

If you have not had a chance to sample one of the four films New Line has put out under this brand, Infinifilm essentially marries the linear storyline format of a film with the nonlinear infotainment format of a CD-ROM or Web site and lets viewers elegantly and fairly seamlessly pause the entertainment to access supporting information related to a particular moment in the film. Each time there is an Infinifilm element to access, a low-key menu appears at the bottom as the film plays (including how much time each element lasts, which I found very helpful) and if none is selected, the menu soon disappears.

For John Q., for instance, New Line has created several Infinifilm documentaries on the organ donor system in our country, elements of which viewers can access during key and related moments in the film. Now, I have not seen the John Q. DVD yet, so I cannot vouch for the quality of the documentaries. But if they are similar to several Infinifilm DVDs I have seen, like Thirteen Days or Blow, both of which tackled historical and social issues that New Line explored with interesting and credible infobytes, then I think the Infinifilm application here will lend more meaning to this film.

The future of home entertainment will likely see Internet-enabled set-top boxes that also include DVD players, which will usher in a new generation of DVD/Web interactivity that will allow for all sorts of exciting integration between filmed entertainment and infotainment. Meanwhile, my hat's off to New Line and others who are pushing the envelope a bit and exploring DVD's potential as a new art form.


30 Apr, 2002

THE MORNING BUZZ: It's All About the Merchandising

I wasn't really going to write this column. Stephanie Prange, our executive editor, made me do it.

About a month ago I finally got on eBay as a seller, something I had long intended to do. My strategy was to start very onesy-twosy, so I put up two items for $1 each. I sold one for the minimum bid.

Then I decided to go for it. Put up six items the next weekend. Sold two. The next weekend I put up 14 items. I sold 11 and put up nine more; sold six. By now I was feeling pretty comfortable with the overall workings of it. I've become a regular trader. I'm hooked.

And it's so liberating. I have been cleaning through stuff for a few months, stacking in the garage for a yard sale. I had one a couple of weeks ago with almost no traffic (though thankfully I sold the biggest items, which would have been hard to ship). But as I sat waiting for customers I started to see my stuff in a whole new way.

I had a box of pinback buttons at the yard sale with an index card marked "10 cents each." Nobody even looked at them. But I saw them differently this time – I grabbed a handful of Ziploc bags and separated them into categories: political, bands, movies, advertising, miscellaneous. I put each bag on eBay for 99 cents minimum bid.

I was pretty pleased with myself for thinking up this little merchandising strategy. I'm altogether insufferable now that I sold all the bags and got $20.50 for one of them. (At the yard sale the buyer would have paid $1.50 and no shipping for the same goods.)

This is a testament to the reach of the Internet. EBay succeeds because it lets people like me connect with a market we would not otherwise reach.

But what Steph wanted me to tell our readers is that even a lowly journalist can rub two brain cells together and come up with some kind of strategy to make an otherwise neglected item appealing to some buyer.

I'm sure this particular strategy – packaging similar but otherwise nonproductive items (like catalog war movies, for instance) by theme – is an old trick to you, but the trick is not the point.

It's all about the merchandising and merchandising is about looking at the same stuff you live with day after day in a new, different way. Sometimes the results are surprising.


29 Apr, 2002

THE MORNING BUZZ: The Distribution Pipeline Continues to Be Squeezed: Do Retailers Care?

Since reporting Columbia TriStar Home Entertainment's decision this month to streamline distribution to Ingram and VPD by the end of the summer, we've heard precious little outrage.

In last week's story, a few retailers voiced opposition to the move, noting it may make it more difficult to quickly reorder surprise hits and that it severs long-term relationships with other distributors.

Still, compared to other industry topics, such as street date violations, we've heard nary a peep.

It could be retailers are so used to these kinds of studio-imposed contractions that they are resigned to it. But I'm beginning to wonder if retailers really care.

In a Video Store Magazine survey of 200 independent retailers conducted last June (Video Store Magazine, July 22-28), the majority of retailers (71 percent) reported they felt distributor customer service had not suffered. At the time, distribution had been hit with two major blows: Warner Home Video had gone rental direct, with fulfillment through Ingram (September 2000); and Universal Studios Home Video had streamlined distribution through Ingram and VPD for rental product, plus Valley Media for sellthrough (October 2000). Still, 74 percent of retailers in that June survey ranked their distributor's customer service as an eight or higher on a scale of one to 10, and only 34 percent reported that buying product was more difficult than a year ago. Twenty-two percent said it was easier and 45 percent felt things were about the same. At the time, the distributor most respondents reported using was Ingram (41 percent). Second was VPD (25 percent).

In the survey, one-fourth of respondents said their distributor had changed in the last year; yet they didn't seem to care much based on their responses. I know if I were forced to change even my favorite ice cream (Haagen Dazs) I'd put up more of a fuss.

Perhaps now that Columbia TriStar had further squeezed the pipeline, retailers will begin to feel the pinch, too. I'd be curious to hear from our readers.


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