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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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2 Apr, 2004

Call Me the Latest Blu-ray Convert

Monday night I suddenly got a real sinking feeling in my gut. I realized that my entire DVD collection, consisting of more than 2,000 titles (not counting children's and boxed sets) and crawling through my home like kudzu in the Southern wilds, is one day going to have to be replaced.

My epiphany came during a Blu-ray presentation in Santa Monica, Calif., during the Digital Hollywood conference. I had gone into it thinking well, next-gen DVD is fine and all, and while I'll certainly buy new releases on the new format once it becomes available sometime next year, my cherished catalog titles — Big Sleep, Mildred Pierce and other film noir are my personal favorites — will surely be with me forever.

But right after Columbia TriStar Home Entertainment president Benjamin Feingold talked about the new technology giving Hollywood “a much bigger canvas,” director Guillermo del Toro had to go and spoil my day.

The screening of excerpts from his upcoming Hellboy were impressive — nothing like seeing the pores on a demon's face — but what really did me in was the side-by-side showing of Lawrence of Arabia.

It reminded me of a magic moment more than seven years ago when I saw a similar split-screen showing of VHS and DVD, and right then and there vowed to do everything in my power to rid not just my home, but also the entire world, of those nasty, clunky videocassettes and send them straight to the scrap heap of flawed, and ultimately failed, technologies where they belong.

Well, guess what. I was expecting a difference — sharper lines here, a hair there, a more pronounced freckle, perhaps — but not this kind of difference. Desert bushes that blended into the foreground like smudges were all of a sudden sharp and clear as they passed from the DVD side to the Blu-ray side. The ripples of battle flags became touchable, feelable; the hordes of riders went from ant-like blurs to itty-bitty people, clear as crystal.

“The adult industry's going to have a field day with this” was among the first thoughts that came into my head.

The second was what to do with all those DVDs that suddenly don't seem all that precious anymore.


29 Mar, 2004

And Then There Were Two

Hollywood Entertainment's move to go private may have many motivations — not the least of which is a stock jump — but it also highlights the troubled relationship video stocks have with Wall Street.

Hollywood's stock has taken a beating, as have other public video chains, based on worries about the ephemeral nature of the rental business, which has, since its inception, been under attack from competing interests that want a bigger piece of the home entertainment pie.

Never as sexy as video-on-demand or online rental upstart Netflix, the rental chains have only been temporary havens for Wall Street until the “future” arrives. In my tenure at Video Store Magazine, video retail stocks have been variously characterized as profitable and solid businesses in a sea of promises to the outmoded buggy whip. As the future technologies go, so doesn't go video rental. If VOD is hot, video rental is not. If VOD is a far-off pipe dream, video rental is a good solid business.

The even-more potent and immediate threat of DVD sellthrough has taken a toll on video rental stocks as well. If Wal-Mart sells a title for as low as $5.88, why would anyone rent?

Whatever the reality of the situation, Hollywood going private and Viacom washing its hands of Blockbuster by spinning it off shows Wall Street's affair with video rental chains may be off again.


28 Mar, 2004

DEG Could Play Moderating Role In High-Def Battle

I would expect 2004 will be a year of skirmishes between the two opposing camps in the next-generation (high-definition) disc war.

At the recent IRMA conference in Palm Springs, Calif., representatives for the HD-DVD format and the Blu-ray format fired shots at each other's technology before DVD replication executives. This week in Santa Monica, Calif., during the Digital Hollywood conference, we can expect to hear more of the same.

The IRMA presentations were most interesting since both camps have to be able to sell replicators not only on the potential successful adoption of their format, but on the potential financial impact for replicators who have to make high-definition discs.

HD-DVD proponents say in this important regard their format would require very little change in current plant set ups to replicate their discs, while Blu-ray representatives acknowledged a fairly significant up-front investment in plant retooling, initially, although they maintain subsequent costs go down.

Both sides seem to have been successful at drawing blood in the past six months. While HD-DVD garnered the support of the international consortium DVD Forum, Blu-ray has continued to attract support from a broad spectrum of companies including most recently TDK.

So how does something like this come to a resolution? Can we expect to see two competing formats hit the market in the next few years? I think the consensus is that most executives at the studios and major retailers would hope that scenario does not come to pass. There is a window of opportunity for the packaged media industry to make a coordinated leap forward with a high-definition format that can help sustain what has been a remarkable growth business in optical-disc home entertainment with DVD. Some would argue that such a leap is necessary to forestall or significantly delay consumers turning to broadband delivery of home entertainment. Some studio executives anticipate that 2006 or 2007 is a likely time frame for a high-definition rollout, but such a rollout requires plenty of advanced effort, and time is slipping away.

One group that has the opportunity to play a role in helping to bring this issue to a resolution is the Digital Entertainment Group (DEG). It is the only group in the packaged media space that has, as members, studios, retailers and hardware manufacturers. Buena Vista Home Entertainment's Bob Chapek, president of the DEG, has said that the DEG does not intend to take a position in favor of one format or the other.

While discussions behind the scenes are surely going on, an organized effort or gathering within the DEG to help find a path toward one format (perhaps some hybrid?) could serve a very important moderating purpose in this format struggle.

I hope the DEG considers taking up this challenge, because right now, I don't see any moderating force that can help us avoid a messy conflict that could ultimately hurt the industry significantly.


25 Mar, 2004

What's Selling on DVD? You Name It

Independent home video suppliers haven't been hit nearly as hard by the transition from VHS rental to DVD sellthrough as many in our industry had predicted. Common sentiment was that in a commodity business, the emphasis on hit product would be even greater than it ever was when rental was king, and that meant much of the independent and so-called “secondary product” simply wouldn't move.

Some of our industry's best minds took it a step further: Hit by sagging video sales on the back end, indie filmmakers would have an increasingly tough time getting financing, and that would mean not only would these small films not sell, but they wouldn't get made in the first place.

The dominoes would fall, and when it was all over the big studios would rule the roost like never before. There would still be ‘B' product, but it would be low-budget stuff the studios picked up for a song.

Fortunately, for those of us who actually like movies, real movies, this hasn't happened. Indeed, the indies appear stronger than ever, with companies like First Look and Urban Works talking about higher budgets and bigger marketing campaigns.

This little stuff, you see, is selling.

Small films are still primarily rental, but there's enough of an audience to buy this stuff that even the biggest retail chains have taken notice. Wal-Mart, Best Buy, Target — sure, they're spending big bucks with the studios, but they're also spending money on films from Maverick, Ground Zero and other small suppliers who in the rental era were lucky to crack Blockbuster.

Most indies with whom I've spoken recently say they're not only shipping more units than ever before, but they're also making more money. And that's a completely different scenario than virtually everyone I know, and respect, predicted.

A funny story: Tony Perez of Ground-Zero had his own doubts that his low-budget urban actioners would prosper in a sellthrough environment. When his sales team told him they were selling, he did a little research.

His discovery: the primary buyers of his films were young bling-blingers with souped up cars who bought these films to play on their car DVD players, generally while the car was parked somewhere so people could walk around and admire it.

Funny story No. 2: I recently took my young sons to a model railroad exhibit. Virtually every cityscape track had a drive-in movie theater, fashioned from a portable DVD player. And most of these makeshift “drive-ins” were showing railroad documentaries.

There seems to be no rhyme or reason as to what's selling on DVD. Everything's selling. Hmm, I wonder if anyone would like to see some of my home movies?


24 Mar, 2004

Plain Old DVD Suits Me Just Fine

All the talk of emerging high-definition technology tends to make my head spin a little bit.

Granted, I'm no technophile, but I am interested in the newest, coolest stuff, just like most people who love movies, music and TV are.

But HD-TV, hi-def DVD, overall it kind of makes me go “meh, whatever.”

I saw a demonstration of D-VHS at last weekend's IRMA conference, and I'll admit it was striking in picture and sound quality — it looked just like what you see in a good movie theater.

But I don't know that I'm really all that worried about my home viewing looking exactly like what I see in the theater — that's what makes actually going to the movies special to me.

I saw Lawrence of Arabia on the big screen a few years ago at a screening when the special edition DVD was coming out, and I just don't think any home-viewing technology, no matter how advanced or how amazing it was, could match the awe factor of that gigantic screen, the event-type nature of watching a movie in a theater.

I'd love to have my own mini-movie theater someday — in my gigantic future home, of course — now that would be exciting home viewing for me.

But otherwise, DVD suits me just fine.

I think that as a consumer, I skew more toward the average than the early adopters and technologically advanced crowd who are currently gobbling up HD-TV sets and taking advantage of increased options for hi-def TV.

And I think DVD will still remain attractive to my marketplace counterparts and myself even after we upgrade our hardware to hi-def.

Jim Bottoms, president of media research group Understanding & Solutions, made a good point at the IRMA conference when he said: “Consumers have been encouraged to replace their VHS libraries with DVD, but we probably won't see consumers jumping to replace their DVD libraries with HD discs.”

I have to agree. I think, after the hi-def market finally settles itself into a format and starts to take off, shoppers like me will likely be enticed to buy the newest releases in whatever format comes out alive.

But as for the thousands of dollars it would take to replace our ever-growing DVD collections, I think the little disc may suit us just fine for quite some time.


22 Mar, 2004

Netflix Model a Growing Concern

For the longest time, Netflix was considered an upstart, an also-ran in the failed dotcom bubble by many in our business. But as I write this, nearly half of respondents to our online poll about online rentals say the trend will have a big affect on their business in the future.

Blockbuster, which has on many occasions said the Netflix model was merely a niche business, in its recent filing noted that it is spending about $250 million to $280 million on “capital expenditures” to improve systems in preparation for the chain's national rollout of a in-store rental subscription model. The chain reported, “We may test other alternatives to our standard rental model to respond to competitive alternatives that do not have extended viewing fees [read late fees].”

Who knew customers hated late fees so much? Netflix entrepreneur Reed Hastings, that's who.

Retailers seem to be waking up to this — as evidenced by our online poll. Netflix VP of acquisitions Ted Sarandos said “profitability was elusive” when the company tried brick-and-mortar subscriptions. I'd be interested in hearing from any of you who've made a go of it with a subscription model — either online or in-store.


19 Mar, 2004

The State of the Video Industry

Welcome to another one of my periodic odds 'n' ends columns, a collection of tidbits and anecdotes that every now and then, when I get enough of them, weave a telling tapestry of the state of our humble industry. I've also added my comments — caustic and otherwise:

  • The Sav-On drugstore near our offices in Santa Ana, Calif., has a “Value Center” of budget movies for sale in the front of the store, next to the photo department. It's virtually all public domain stuff. DVDs are $5.99, while videocassettes are $7.99. (Either someone doesn't get it, or those clunky old cassettes are fast becoming collector's items.)

  • Those $5.88 DVD dump bins that for the past two years have appeared in high-traffic aisles at Wal-Mart in time for the Christmas holidays didn't disappear after the first of the year. The last time I checked, they were still there, brimming with discs and eager hands reaching for said discs. (Anyone looking another copy of Young Guns?)

  • Now that Fox has issued three volumes of “Cops” on DVD, what's next? Is the reality TV onslaught about to begin? (I've always wanted to have a copy of “Who Wants to Marry a Multi-Millionaire.”)

  • Art-house films are becoming a hot commodity on DVD, as suppliers find that even what used to be considered “rental” product can be successfully marketed to DVD collectors. Documentaries are also scoring big on the sales front. Conspicuously absent from the DVD front — or least from my radar—are “how to” titles. How come? (I still remember back to my early days at Video Store Magazine, when we got a screener titled How to Skin a Wild Elk.)

  • Points to ponder: Why don't DVD players have clocks, like VCRs? Is next-generation DVD even going to be called DVD? And is it only me, or is the tape suppliers are sticking on three sides of the DVD package getting stickier, thicker and harder to remove without destroying the case?


Have a good weekend.


18 Mar, 2004

Studios Revisit Using DVD as a Promotional Tool

Sony Pictures and Best Buy just bowed a co-promotion in which the Minneapolis-based mass merchant will distribute for free 500,000 DVD previews featuring footage, behind-the-scenes material and interviews with the cast and crew of the April 2 theatrical release of Hellboy.

Yesterday, when I was at my gym, I noticed a stack of promotional DVDs for ABC's new romantic comedy “Celeste in the City.” Whether it was guerrilla marketing or some crosspromotion between the gym and ABC wasn't clear, and after watching the disc and inquiring at the front desk, I wasn't any wiser.

Besides the fact that Best Buy reportedly received no financial compensation for promoting Sony films months before they will reach its retail shelves, the concept of promoting theatrical releases by DVD first surfaced during the dotcom heyday by a company called Hollywood Previews.

A quick call told me that the Santa Monica, Calif.-based company, which had a business model that paid theater owners to distribute promotional DVDs of future theatrical releases, was still in business, only now it had diversified its distribution channels to include newspaper polybags and retail.

A spokesperson said Hollywood Previews was not associated with the Sony/Best Buy deal, although similar retail initiatives would be forthcoming.


16 Mar, 2004

Welcome to the Age of Digital Darwinism

Charles Darwin's theory of Natural Selection posits that the weak and inferior members of a species will perish so only the strong can breed. For example, solid-colored Zebras would not have lasted long because they would be too easy to see in reedy shadows, presumably, if any existed, they got eaten and died out.

I couldn't help thinking about this as I drove to work the other day: I'm pretty sure that natural selection works, especially when I hear about a driver racing through the crossing gates at train crossings. Usually the train wins. Thank you, Mr. Darwin.

But, as in the rest of nature, the Dodos usually take a few Sabertooth Cats with them. That thought crossed my mind as I looked up into my rearview mirror to see a woman talking on her cell phone, barely aware that she would have to stop too fast to avoid rear-ending me when I slowed for a truck ahead of me — which was turning into a driveway without signaling. Instead of this life flashing before my eyes, it was my next incarnation, one that included a heightened sense of everything around me.

Driving distractions are the herald of Digital Darwinism on a mass scale. Highway safety monitors have figured out how dangerous distractions are, although most, if not all, of their research appears focused on cell phones. Why? Partly because onboard entertainment is fairly new to ordinary cars. But also because it's an automatic flunk on the species IQ test.

“I think if you are talking about DVD players that are accessible to the driver, you are not going to see a lot of studies on that because it is so clearly not a good idea,” Insurance Institute for Highway Safety spokeswoman Anne McCartt said. “I don't think it's something anyone would think is necessary to do research on.”

A study published in the International Journal of Behavioral Nutrition and Physical Activity said one reason our nation is getting fatter — the percentage of obese Americans has been climbing for years — is that people spend more time driving and watching TV than doing any kind of physical exercise. I'm sure the researchers didn't count on a lot of overlap there, but it seems couch potatoes are also becoming bucket seat potatoes (especially since their survey participants spent an average of 170 minutes a day watching TV or movies and 101 minutes a day driving).

It does seem like a no-brainer that watching TV or a DVD while driving is, well, not too bright. But that won't stop the yahoos. Hey, they're yahoos, right?

At the rate we're going, the human race will ultimately develop some advanced sense that lets us drive safely while watching TV or DVDs or working on a computer. At least the ones that survive will. But that could take centuries, and in the meantime, the losers may kill the rest of us.


15 Mar, 2004

Shelf Space Sends a Clear Message: Goodbye VHS

You can find just about anything at Costco, from vacuum cleaners to deli meat to lawn furniture. They've even got Waterford crystal at bargain prices.

But if you're looking for non-kids' movies on VHS, you're out of luck.

During a recent visit to the popular discount store, I perused the video section and was surprised to see only a small collection of cassettes — maybe a half-dozen titles or so — all of which were children's or family titles. The display for Schindler's List on DVD was bigger.

I've been writing about this business long enough to remember a time when kids' stuff was the only thing stores and studios would sell directly to consumers. Big Disney hits like The Lion King, Barney videos and the like pretty much had the sellthrough arena to themselves. The industry for the longest time didn't think adult-themed fare, especially dramas, would sell.

Gradually, studios began to recognize romantic comedies were popular sellthrough items. Hits like Sleepless in Seattle did great numbers when they were repriced. Soon enough, studios began to bring out such collectable female-targeted fare directly to sellthrough. Even romantic dramedies like the Sandra Bullock starrer Hope Floats were hitting the sellthrough trail. Studios variously tried thrillers at a sellthrough price. Warner released the Harrison Ford thriller The Fugitive, but such titles were few and far between.

What a difference DVD makes. When all DVDs went sellthrough, all these issues fell away. All titles and genres were open to buy, and consumers bought — and are buying. Meanwhile, VHS sellthrough is caught in a time warp — all kids stuff. It looks as if VHS sellthrough will go out the way it came in. When consumers throw out their last broken VCR — no doubt tucked in a kid's room — it's history.