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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.

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22 Apr, 2002

THE MORNING BUZZ: If You Can't Beat 'Em, Co-Opt 'Em

About a month ago in our March 24-20 issue of Video Store Magazine and here on the Hive, senior editor Holly Wagner wrote about DVD players in such diverse places as cars and blood donation chairs (incidentally, after the article came out, Samsung debuted a networked refrigerator that can play DVDs. Holly calls it the DigiFridge). Indeed, many trades appear to be latching onto one of the hottest entertainment products to hit the market in years.

In what is perhaps the most bizarre twist I've seen yet, an Internet streaming technology company, Media and Entertainment.com Inc., yesterday unveiled its new product, NetDVD, billing it as "the world's fastest and clearest real-time video and audio compression methodology." Now, several streaming movie companies have put their films on DVD, but this is the first I've heard of the competing technology actually appropriating the packaged media "DVD" moniker to sell a streaming media concept. DVD stands for digital video (or versatile) disc, after all. Its very name implies packaged media.

DVD has a lot of cache, even among the video-on-demand crew. It has become a standard for good picture and audio quality (something VHS never was; heck, it was often a standard for bad quality) and for good digital delivery of entertainment. "Most streaming companies deliver blurry, mediocre and less than desirable video quality," says Media and Entertainment.com's chief technology officer in a press release, adding "no other company can match the speed and clarity of our NetDVD system."

In the whipsaw turn of events after the bursting of the Internet bubble, DVD and packaged media seem to have come out on top. It's nice to be on the cutting edge, for a change, with our VOD brethren implicitly acknowledging the power of the packaged media product.

22 Apr, 2002

THE MORNING BUZZ: Use DVD To Make Collectors Out Of Renters

I had an interesting conversation the other day with our art director. He's worried about the future of video and told me that when true video-on-demand arrives, “I'm there, man. Think about it – any movie you want to see, when you want it, at the click of a button. Why would I ever want to go to a video store again?”

His comments underscore the importance of converting packaged media consumers into buyers rather than renters – a bold step, I know, but one I happen to believe is vital for the home video business to survive.

We're always hearing talk about VOD. It's right around the corner. It'll never happen. It's coming, slowly but surely. It's almost here – no, wait, the economy's gone south and investors are shying away from anything speculative, so video rental stores have at least five or 10 years left.

I've been hearing that “five or 10 years” line for the last 14 years, ever since I began writing about our industry for Video Store Magazine.

I have always believed that even true VOD wouldn't completely kill video rental, but the more I talk with people like our art director, the more I believe there is definitely a faction out there that doesn't care what form their movie at home takes – they just want to watch movies at home with a minimum of effort.

For these people, going out to a video store to rent a video is a hassle, not a social experience. They want instant gratification and renting a video takes time they'd rather not spend – and then there's the added hassle of bringing the movie back. Heck, our art director didn't even flinch when I told him watching a video “on demand” might set him back $3.95 or $4.95. “That's what my video store is already charging for a rental,” he said. “Yeah, it's for three nights, but I still only watch the movie once.”

People like this have no interest in collecting movies en masse. Oh, sure, they might buy a DVD every now and then of a film they just have to have, but by and large their home movie passion is a transient one – and it might as well be just another click of the remote.

That's why retailers have to start pushing DVDs as both affordable and convenient. Catalog prices are tumbling down, with Wal-Mart already boasting a huge selection of watchable films for $5.88 apiece. Meanwhile, new releases are routinely available for $15 or $16 at places like Best Buy, and if certain studio heads have their way new release prices are in for a downward slide as well.

Regardless – it is imperative that retailers (and by this I mean all retailers, even tiny mom-and-pops who still view sellthrough as a foreign concept) start pushing the heck out of DVDs as a way to get consumers into the habit of collecting movies. Bring in as many low-cost catalog titles as you can afford. Start selling (and buying) used DVDs. And don't give up on new releases. Buy them as cheaply as you can, even if it means going to Best Buy or Fry's, and carry whatever's new and hot if for no other reason than to show your customers that you can, that you are a full-service home movie store. Then target frequent renters and offer them incentives like lease-to-own to get them to start building their own libraries.

As I've stated previously, a home library of DVDs is the ultimate form of video-on-demand – and at $5 or even $10, the cost differential between a rental (particularly a pricier, multiday rental) and a sale starts to blur.

No wonder Wal-Mart is making an all-out effort to convert renters into buyers with slogans like “No late fee…You own it!”

They've seen the writing on the wall. Just because the sky hasn't fallen on video rental yet doesn't mean it's never going to fall.

18 Apr, 2002

THE MORNING BUZZ: Distributors Looking to Capitalize on DVD Growth

The travails and woes of the video distribution business have been well documented over the past several years and I don't intend to revisit them today. Suffice to say, the home video business has changed on so many different fronts and many of those changes have conspired to make life (yes, even existence) difficult if not impossible for distributors. This has resulted in fewer distributors in business going into this week's NAVD meeting in Los Angeles than there were a year ago.

But while the association's dwindling membership may cause some to wonder if the group will soon follow its former members into that great warehouse in the sky, in actuality, those hardy souls who remain in this business may be lean and mean enough to actually enjoy something of a renaissance, at least for the next few years.

The emergence of DVD in the last several years as the soon-to-be dominant home video platform has reinvigorated the home video retail industry. And while the margins on DVD have made it even tougher on the middleman, the fact is that DVD is enlarging the home video pie overall, especially in markets where distributors can grow their businesses; non-specialty stores.

As senior editor Joan Villa writes, the difficult times have caused those distributors still in business today to have become even more efficient in their operations and focused in their customer service, to both counteract the lower margins and to raise their value as key service providers to a growing cadre of non-specialty retailers who are anxious to build up their own home video businesses.

Music stores, supermarkets, e-commerce sites, book stores, drug stores, book stores and libraries are just some of the categories that are growing their video businesses, driven by DVD's primarily sellthrough nature. These businesses need the sort of value-added assistance and small-package shipping that only distributors can do. Mass merchants who deal directly with studios are also using distributors for incremental, quick replenishment business.

“With DVD exploding, distribution is needed more than ever,” said Steve Scavelli, president of New York-based Flash Distributors.

So while those gathering around the pool at NAVD conference cocktail receptions this coming week may feel quieter than ever, one might sense a buzz of optimism as distributors look forward to enjoying some payback for the tough years they have weathered, having emerged as highly efficient, customer-centric operations ready to help a growing retail industry capitalize on DVD.

16 Apr, 2002

THE MORNING BUZZ: Forget the Millennium, We Have To Deal With the <I>Interregnum</I>

Video rental dealers, by and large, don't perceive video-on-demand (VOD) as a threat – at least not any time soon.

But if anything became clear to me Tuesday at a VOD panel discussion the Digital Coast Roundtable sponsored, it was this: some of the people in the VOD business view video rental as an obstacle to be stamped out as soon as possible.

Intertainer CEO Jonathan Taplin – who did a truly impressive job of moderating the panel – called this period in entertainment evolution an interregnum – a period between the death of one king and the accession of his successor. That, with all of the chaos and struggle for leadership it implies, is the best description I've heard yet.

Panelist Andrew Wolfe, SVP and chief technology officer at personal video recorder (PVR) maker SonicBlue , even made it clear he wants the rental window. He said nothing of his pitch to studios, networks and other content providers, but based on this I'd expect PVR makers to position their boxes as big, fat cans o' Rental-B-Gone.

That's going to mean rentailers have to fight for their market position even harder. They'll have to convince Hollywood that rental is a value proposition, which won't be easy when studios have options to provide the same content without any manufacturing costs.

Right now the specter of piracy is keeping that at bay, but if the pipers can convince studios they can make more piping content into homes than they would lose on piracy, that's big trouble on the rental horizon.

The pipers – the middlemen who supply neither content nor hardware but the pipeline to connect the two – are raring to go. They do have the technology to make it happen now and they seem almost mystified that none of the big studios want to come to their party. Rather like the cat who's confused when you aren't as pleased as she is about the dead mouse she left on your pillow.

These folks are aware of Movielink.com and Movies.com (the studio VOD joint ventures in development). They are watching those ventures closely, knowing neither effort has yet yielded a stream or download. It's generally accepted that the studios announced their plans as a sort of placeholder, to tell the public they will bring VOD before anyone else gets a foothold.

Folks like Taplin and Cinemanow CEO Curt Marvis are the ones getting that foothold. They don't have the brand recognition of a Warner, Disney or Universal so while they are trying to make their own names, a studio VOD failure could give them a bad rap.

As usual with palace intrigue, it's amazing how much fear and greed are keeping the situation in check. Hollywood's reputation as an almost medieval court system is long and it's clear the studios want to play this game by themselves. They could have VOD up and running right now if they ever get over the fear of piracy and make peace with the techhies.

That is the real obstacle to widespread, big-title VOD any time soon. Even this field holds a few bright spots of opportunity for the packaged side:

1) DVD has deviled VOD (they even look like dueling abbreviations) to the precise measure it has benefited you. Accessibly priced, ownable video frustrates efforts to get people to pay subscription fees for content and the pipeline to get it.

2) The VODers acknowledge that slowing uptake of home broadband is a barrier to homes. That part of their system is largely out of their control so their best marketing weapon is to pursue content that's irresistible enough to make people pay for bandwidth they don't want for its own sake.

3) Pipers and content providers seem to be looking at event-based content like sports and high-profile reality shows as a great way to get VOD into homes. They say the demand for content is a bottomless pit. For as long as the studios stall, the VODers can move forward with less of an impact on the packaged market. People will still rent and buy movies.

4) The set-top set is getting ready to roll out DVD-enabled boxes. Whether that's an olive branch or a Trojan horse remains to be seen. They may just be eyeing DVD as the video equivalent of a gateway drug.

5) Wolfe said people don't collect video to like they collect music, to build libraries. Uh, wrong, but thanks for playing. Apparently he has never seen DVDs, or the people who hoard them. That statement might have been true at VHS' zenith, but it's a major miscalculation today.

The next few years – the interregnum-- will be wild and woolly for this industry. The entertainment kingdom is a fief system and the lords are feuding. Technology has put more weapons in the arsenal than anybody knows what to do with. Sorting it all out will be fraught with skirmishes, coup attempts and maybe even a few conquests.

12 Apr, 2002

WORKING WEEKEND: Tom Warren&#39;s no shrinking violet

Those of you born before 1960 may well remember Charley Weaver, the rustic raconteur who made a career of appearing on Jack Paar's "Tonight Show," Mike Douglas and other talkfests. He'd weave (get it?) homespun anecdotes and dispense bits of wit and wisdom from his bucolic perch on Mount Idy. In truth, Charley's name was Cliff Arquette – young ‘uns might relate to him as the pappy of nubile thespian siblings Rosanna and Patricia.

The video rental industry's own, inimitable Tom Warren reminds me of good ol' Charley. Like an ace fisherman, he reels you in with his keen instinct and disarming style. Speaking as a native New Yorker, it's no secret my landsmen's regional accent – epitomized by Brooklynese and Long Islandese (my origin) – comes off as decidedly less engaging than the genteel charm of a Carolinan drawl. But Tom's appeal is much more than speech-deep.

A prime example of why Tom – owner since 1983 of the 12-outlet Video Hut chain in North Carolina -- is in his second consecutive term as chair of the Video Software Dealers Association was his deft and incisive handling of a retail panel at a conference in New York about packaged media loss prevention. (Keep it up, Tom, and you'll handily put journalists who moderate panels – present company included – out of business.That means I'll have to take my good friend Steve Scavelli of Flash Distributors up on his longstanding offer to put me to work running a video rental store.)

The conference on loss prevention of DVDs, games and other entertainment media -- which chief moderator Scott Bartlett of Sony Disc Manufacturing assured, in a below-the-belt quip, was a different sort of shrinkage than that experienced by hapless George Costanza on "Seinfeld" – was sponsored by packaging suppliers Clear-Vu and AGI PolyMatrix.

"Shrinkage is an issue for rentailers as well," advised Tom, as he presided, in his inimitable fashion, over a panel encompassing Best Buy, Borders, Electronics Boutique, HMV, Toys "R" Us and Wal-Mart.

He noted that the novel "integral locking" package design promoted as "the next standard" at the industry gathering was for rental as well as sellthrough use.

"For every DVD stolen," Tom explained, "I have to sell 15 to 16 to pay for it with the margins I have.

"That will kill you in a week when something like Training Day comes out," Tom continued, clearly implying the rough-and-tumble movie about a rogue cop is a prime target for rogue customers.

Noting that product shrinkage is a very complex and costly occupational hazard for even vigilant retailers to arrest, Tom surmised "The only way I can think of stopping the professionals is to weigh a person coming into the store and on the way out.

"Our focus is the convenient (or casual) shoplifter. The high school kid or person with a drug or mental problem. The amateurs are easiest to catch."

The application of an EAS tag (electronic article surveillance) on the package and not the disc is not exactly daunting to shoplifters who want to get the content inside the package out the door, said Tom. "One surefire way to catch amateurs is to target the content itself.

Any shrinkage control measure that ends up costing more to implement than "the shrinkage cost per SKU," it isn't worth it, he offered.

Warren also addressed the issue of who pays for more robust loss prevention. "The supplier can't do it for free, and the retailer can't absorb it, so the person who pays the tab for shrinkage is the consumer. It's up to us to do what we can. It's matter of principle."

Warren suggested that also newsworthy about the conference was, "Something you didn't hear mentioned once all day – VHS."

11 Apr, 2002

THE MORNING BUZZ: Race Sponsorship Extends Lifespan of <I>Fast and Furious</I>

With each passing year a typical movie's theatrical lifespan is shrinking as studios load up their marketing blitzes for opening weekends and theater operators move the latest hits in and out at a dizzying pace after the marketing support slumps. The home video rental business window of opportunity has also shrunk from months to perhaps six weeks or so, thanks to day-and-date release of DVD at sellthrough prices. But the collectible nature of DVDs (and the multiple editions that appear over time) is extending the lifespan of home video titles, especially hit movies. If you can couple that with some unique related marketing efforts, you can create an almost year-round sellthrough effort on major titles, and even years-long sales efforts on sequel films.

Of course Harry Potter and Lord of the Rings are the obvious examples here, but mega brands can now be created on the back of DVDs from titles that, seemingly, didn't have the potential for that in pre-DVD days. This struck me as I read through a recent announcement heralding the multiyear sponsorship between Universal Studios Consumer Products Group and NOPI (Number One Parts, Inc.) to sponsor the NOPI The Fast and The Furious Racing Series, which begins May 11 and runs to Oct. 19. I mean, talk about your shelf life. There's a big dose of it right there for Universal. We're talking about a sponsorship that ends 10 months after the original home video streeted for sale, and they'll still be pushing the home video. (And, of course more importantly, The Fast and The Furious brand, but more on that in a moment). Of course Universal will take advantage of this with a May 25 release of a special edition VHS of the home video that includes some of the bonus materials included in the original "collectors edition" of the DVD released Jan. 2. On that same date Universal Studios Home Video will also re-release the original DVD, though no details of that were available at press time.

The length of the actual deal with Universal and NOPI could not be confirmed, but assuming it's at least two years, the obvious question I had was…will it be known as the NOPI The Fast and the Furious Racing Series next year as well? That could also not be confirmed by press time, but I would guess the answer to be yes. There is a sequel planned for the surprise $145 million box office hit, though production has yet to begin and there is no announced theatrical target date. And, of course, there is always the followup home video release after that. Think about this from the studios' standpoint. I can't say what they were anticipating for The Fast and the Furious when it made its theatrical debut, but what they may have expected to be a modest teen flick success they now have a two-year, year-round (or more, dare we expect) theatrical/home video franchise! And this drag race series sponsorship is a major commitment to that franchise.

But there's more! Microsoft's Xbox has signed on as the series' season-long sponsor. Hmmm. Racers will battle for the Xbox Cup, awarded at the end of the season to the top-points getter. According to the announcement, Microsoft will also market its Rallisports Challenge and Project Gotham Racing Xbox titles at each of the venues. However, there is word of a video game in development for The Fast and The Furious that will be announced this June.

9 Apr, 2002

THE MORNING BUZZ: NAB is Making Strange Bedfellows

Think of Las Vegas and – Quick! – what are the first three things that come to mind?

If you're like me, the answer is 1) gambling; 2) hasty marriages; and 3) glitzy display. So it's the pefect venue – and the perfect metaphor – for this year's National Association of Broadcasters (NAB) convention.

Indeed NAB, which has added a streaming media component to its annual trade show, is a lesson in convergence and strange bedfellows this year. Companies are taking gambles, forming alliances and showing off efforts at VOD like never before.

For the cable and satellite industry, VOD is the killer app. It's the one thing they must have to go to the next level and they're pushing hard to get it.

Whether or not they will ever make it is anyone's guess. Politics and greed factor heavily into the equation and there are new players on the field, namely the tech powerhouses that provide the programs and gear that make VOD technologically feasible. That means more people at the table carving up a pie that has grown little in recent years.

I've been speculating for months that the reason Microsoft made DVD an add-on to its Xbox game console and spurned the widely used media player programs is its intent, long range, to try to convert the world to a Windows Media Player (WMP) standard. Why build an MPEG compatible device if you think the world would rather (or can be persuaded to) make software compatible to your proprietary player? This might also explain why Microsoft made version 8 of WMP (the one bundled in the XP operating system) so it relays information to Microsoft about what DVDs and features users are watching. Call it stealth research.

More evidence emerged this week, as Microsoft showed up at the NAB show to court studios and broadcasters with its computerized delivery system. RealNetworks, which makes the competing RealPlayer software, is also a real player with its announcement of a content management suite the company claims will make it easy for content providers to go live on demand. A few have already signed up.

Convergence is the watchword and it's clear that cable and satellite companies view VOD as the bridge to ITV, the holy grail of targeted marketing. VOD is merely a means to an end, I think, a way to get consumers used to using the set-top to command responses. The real goal is to lure viewers to choose advertising, which is where those companies will rack up the big bucks.

Intel was on hand with a "Powering Digital Media" display that introduced a new peer-to-peer computing program touted to make some files inaccessible to the remote user. (In plain English that means users can file trade selectively, sharing family photos with Aunt Minnie while hiding illegal copies of movies in another part of the computer.)

Sony and Sun Microsystems announced partnering on a program to offer "integrated next generation AV/IT solutions, including video-on-demand and streaming media solutions for cable companies, telcos and broadcasters."

These companies are staples at Infoworld and CES, but this is really the first time the computer giants have made such a push at a broadcasting show. Clearly they have VOD in their crosshairs.

I've been warning, some say like Chicken Little, that if the VOD players ever get their stuff together, video retailers are in trouble. I predict there will be an industry shakeout before we reach that point, but retailers would be wise to consider that dates on that calendar are closer than they appear.

The convergence may seem a long way off, but the studios have all become part of media conglomerates which, in most cases, own substantial interests in cable, satellite and terrestrial-line video delivery systems. With the exception of Viacom and Blockbuster, the only link in the movie food chain they don't own and control already is video rental.

Is anyone else smelling what's on the menu at NAB?

8 Apr, 2002

THE MORNING BUZZ: Under the Heading &lsquo;We Told You So&#39;

There's nothing quite so satisfying for a know-it-all like me as getting the opportunity to say, "We told you so."

We've been noting for some time in our magazine and on this Web site that DVD is entering previously uncharted waters in home entertainment. In our Nov. 19-25, 2000, issue, a cover story, "Talent Focusing on DVD," noted actors' and directors' enthusiasm for the format as a showcase for the moviemaking process. "There is a kind of theater that occurs in the making of the film," said director Bryan Singer in discussing his then-new Fox X-Men DVD. Just last week I mentioned in this column that disc extras are increasingly essential to the home viewing experience, and in his March 31-April 6 magazine column discussing the planned "extended version" of New Line Home Entertainment's The Lord of the Rings: The Fellowship of the Ring DVD, editor-in-chief Kurt Indvik noted DVD "is clearly on the cusp of developing into an art form all its own."

Now, Hollywood's hometown daily, The Los Angeles Times, has seemingly caught on to the novel character of DVD with a cover story, "Press Play to Access the Future," (April 7) detailing the new ways viewers can experience movies through DVD and directors' use of the new medium. This weekend I caught a glimpse of a television segment on one of those daily entertainment magazine shows talking about a newfangled disc item – deleted scenes.

Folks, if there's any doubt left that DVD has entered the mainstream, such consumer press coverage should wipe it away.

I also can't resist yet another "I told you so" moment I experienced this week. In my March 11 Web column, I noted that music retailers praised DVD for offering picture, sound and extras for the same price as an audio CD, and I asked why audio suppliers didn't offer more extras. Just yesterday, a press release came over the wire about a classical music series from Compendia Music Group, "Sir George Martin Presents," that offers video commentary about the composers as well as pictures of artwork from the period when popped in a computer. I still think music DVDs, which have taken off in sales like their feature film counterparts, are a neglected medium that could explode if only the record companies would take notice.

I'm not always right, however. I've long noted my own early doubts of DVD taking off. I didn't see its advantage over the laserdisc. But then I couldn't be right about everything; then no one would get the opportunity to tell me, "I told you so."

8 Apr, 2002

THE MORNING BUZZ: VOD Is A Reality. It's Called DVD

While prices for newly released DVDs of recent theatrical hits appear to be inching upward, as we recently reported, there are voices in Hollywood who believe this is merely a temporary blip on an otherwise downward spiral.

They envision a day in the not-too-distant future when consumers will be able to buy the latest and greatest DVDs for about $10, half the price of a CD. Some studio naysayers see such a scenario as foolishness and wonder why anyone would want to cut prices, particularly so drastically, when demand is soaring.

But there's a method to what some see as this madness, and it is this: by pricing DVDs so low, the discs will be fully embraced by those retailers who live and die by the impulse buy. DVDs will be available for sale on supermarket endcaps, at the drugstore checkout counter, maybe even in the convenience store, right next to the chips and salsa display. Music stores would sell DVDs alongside CDs (as so many already are); today's video rental stores would sell DVDs and pride themselves on their breadth of copy, just as they did in the pre-copy-depth days of VHS, without having to worry too much about being outsold by the big discount chains (there's less wiggle room on a $10 SRP than there is on something listing for $24.99).

DVDs will fast become ubiquitous, this line of thinking goes. The rental-priced cassette will disappear, and while some retailers will still rent DVDs the vast majority will sell them, simply because for 10 bucks consumers will prefer buying to renting, with all its inherent hassles (return trips, late fees, etc.).

At this point, skeptics might wonder, all right, so you're going to kill the rental business and cut sellthrough revenues in half, practically giving away discs for $10 when you could just as easily sell them for $20. Where's the logic in this?

For starters, sellthrough would become a volume business, bigger than anyone ever dreamed of in the VHS-only days. This, in turn, would give packaged media a virtually foolproof hedge against video-on-demand, if not a preemptive strike, because consumers would be enticed to build their own movie libraries and thus have no need for an electronic archive that requires a $3.95 charge on their credit card or cable bill every time they want to watch a movie.

The argument could be made that $3.95 is still cheaper than $10, but the Hollywood voices say the difference is nominal when one takes into account two things: 1) the wealth of special features that come with a typical DVD, a menu that's sure to become even more expansive – and interactive – as time, and technology, progress, and 2) our ingrained aversion toward paying as we go for our home entertainment.

This last point needs some clarification. In the last 25 years, television has become demonstrably better. We've gone from 12 channels to hundreds of channels, dozens of them devoted to nothing but movies – and yet everything gets paid for on a monthly basis, just like the water bill, the power bill, the car payment and the mortgage.

Every attempt to get us to pay per transaction has failed. Pay-per-view is a joke, limited to boxing matches and other sports contests where one "subscriber" invites the whole neighborhood and the actual yield per viewer is minimal. Divx, the pay-per-play DVD variant that bowed its pathetic head in 1998, has become one of the entertainment industry's most notorious (and costly) failures.

Simply put, these Hollywood voices say, the coming arrival of true video-on-demand doesn't necessarily mean there's going to be a market for it. And any market that does emerge could quickly be derailed by cheapo DVDs and the rapid build-up of home movie libraries. Instant access and a vast selection of titles, without mortgaging the farm—video-on-demand, just with a different flavor.

4 Apr, 2002

WORKING WEEKEND: A Full-Staff Salute to USA

It wasn't the biggest party I've ever been to. The Hollywood extravaganzas he major studios threw at the VSDA Conventions of the ‘80s and ‘90s made it look downright inconsequential.

But in my 19 years of attending VSDA, few of its classic parties were more memorable and arguably none were more poignant than what I experienced Thursday night as a privileged invitee of USA Home Entertainment's last dance at Manhattan's Marriott East Side Hotel. This was a staff event – one filled with emotion and camaraderie. Yet, it's so typical of the character of my friends at USA that they made me feel welcome and at home.

It might sound corny to call it the end of an era, but the fact remains that come April 15 – when operations for the proud and feisty video label are transferred to USA Networks' new owner Universal Studios -- it's not the IRS that will be nagging at the thoughts of more than 20 employees of USA Home Entertainment. It's the thought one of the passionate players at president Joe Amodei's farewell party for his loyal crew put it, "We're kicking ass and losing our jobs."

Let's hang some numbers on the ass-kicking. How about 2-1/2 million DVDs of Steven Soderbergh's Traffic. Or half a million copies of the most Patriot-ic Super Bowl ever played. USA is justifiably proud that it routinely pulled off such sales coups with marketing budgets small enough to have fallen out of the pockets of the major studios without notice.

At a label of limited resources like USA, it's not dollars that drive the marketing machine but ingenuity and sweat. With modest budgets behind product that didn't do boffo box office, you simply can't afford cookie cutters.

In his farewell remarks, USA Films chairman Scott Greenstein noted that "15 years ago, most studios would have laughed at the thought of an independent production company like this being attached to it." Conversely, he added, five years from now, studios like Universal – driven no doubt at the moment by economic uncertainty and other intangibles – may regret not having held on to an agile, fiery creative boutique like USA. After all, it did produce one of this year's Best Picture nominees, Gosford Park, which had been on USA's release schedule, but now will bear the Universal stamp.

Greenstein, formerly of Miramax, also gave Joe Amodei his props by saying "you did it the way I would have done it if I knew what you know about this business." He related how not long ago USA's slate was so rife with art house films, Joe would come into his boss' office and ask Scott, hopefully, "Please tell me that the next film we have is in English."

The incomparable Robert Altman, director of that film (and no fan of Hollywood's ruling class of corporate imperialists), sent USA Home Entertainment an extraordinary message Thursday that read, in part, "I love you guys without reservation. For you, it's about the film. In the world we work in these days, that is rare indeed. My deep, deep thanks to all of you."

In addition, USA staffers fielded calls from content partners, such as NFL Films, saddened by the label's demise, saying, "Please don't go away."

After reminiscing about "living a dream" attending the Oscars and getting to work directly with the likes of Steven Soderbergh, Bob Altman, Albert Brooks, Spike Jonze ("Being John Malkovich") and the Coen Brothers, Joe Amodei -- whose love of movies is exceeded perhaps only by his peerless passion for Ol' Blue Eyes -- put it all into perspective.

He said in the end, it's not all about working with big name filmmakers or the sales numbers on Traffic or Michael Jordan's video or the Super Bowl. He said he was taught a long time ago it's about the three Fs – Family, Faith and Friends. All of those were in abundant evidence Thursday night along with three Ps – pride, passion and poise.

And with all the memorable moments he's had at USA, concluded Amodei, his voice breaking, what he'll remember more than anything is a day in November when the USA staff, along with solid industry citizens like Flash Distributors president Steve Scavelli, took the day off from their usual workload to, in Amodei's words, "do something for those guys who went into those buildings September 11."

What they did that day was visit more than 100 firehouses in Manhattan and Brooklyn, delivering to each a VCR and hundreds of videotapes, more than 25,000 movies in all. As if that weren't enough, Amodei resolved that this act of generosity would not be publicized in any way – and has not been, until now.

So it's fitting that the evening came to a close in the wee hours with the USA staff, Steve Scavelli and this reporter ringing the dance floor, swaying in a group embrace and serenading Joe with the national anthem of Hoboken, "My Way."

USA's way was way cool. It is exiting the industry with as much class as the people there brought to a marketplace that can always use more of it.

Just promise us one thing, Joe & Co. Don't be strangers.