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Insights from home entertainment industry experts. Home Media blogs give you the inside scoop on entertainment news, DVD and Blu-ray Disc releases, and the happenings at key studios and entertainment retailers. “TK's Take” analyzes and comments on home entertainment news and trends, “Agent DVD Insider” talks fanboy entertainment, “IndieFile” delivers independent film news, “Steph Sums It Up” offers pithy opinions on the state of the industry, and “Mike’s Picks” offers bite-sized recommendations of the latest DVD and Blu-ray releases.


Opinion
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28 Jul, 2002

THE MORNING BUZZ: Home Video Stocks Are At the Mercy of the Market

It has been a dramatic several weeks for the stock market with huge swings (mostly down) that have caused a general sense of uncertainty as to what lays on everyone's financial horizon.

The recent positive quarterly reports from several of the home video industry's major chains notwithstanding and the general ability of the home entertainment industry to withstand difficult financial times, retail stocks in our category have also taken a bit of a pasting, with a notable exception. Although today it appears many of these same stocks are enjoying a substantial boost upward.

Since July 8, or for about three weeks, the Dow Jones average has dropped about 8.5 percent. Similarly, retail stocks in the home entertainment industry (or those playing a significant role in selling home video software) have also taken a hit. Movie Gallery's stock is down about 11 percent; Hollywood Entertainment's about 12 percent; Best Buy also 11 percent; Target down about 9 percent and even Wal-Mart (the single largest seller of home video) is down almost 12 percent.

The one exception is Blockbuster, whose share value has dropped less than one percent.

Last week both Blockbuster and Hollywood issued fairly positive results from their most recent fiscal quarters. Blockbuster's second quarter revenues grew by 3.6 percent over the same period of a year ago, while Hollywood's jumped 6 percent.

Meanwhile both chains have aggressive plans to continue to expand their business models beyond video rental. Blockbuster is pushing hard to grow its sellthrough business and compete head on with the mass merchant chains, while Hollywood is hot on video games (both sales and rental) and plans on expanding its Game Crazy store-within-a-store concept to another 100 locations this year to test the initiative before, perhaps, rolling it out chain wide.

Newcomer to the securities scene, Netflix, meanwhile, is taking a bit harder pummeling from the market, its stock being down a little more than 25 percent from its July 8 share price of $16.46. It may have the additional burden of being an online business that, while Netflix had been bucking that downward trend, may have added to its decline over the last several weeks.

But the issue with the American investing public is not with the Internet business. We've been there and done that. The uncertainty continues to be what other “generally acceptable” and not so acceptable accounting practices will rear up to bite the next Fortune 500 company as they continue to come clean about some of the accounting shenanigans of the ‘90s that have been used to paint, perhaps, a little rosier financial picture of themselves for investors and analysts (who were playing along, knowingly, with the game) than truly existed.


26 Jul, 2002

THE MORNING BUZZ: Better Quality Special Features in the Pipeline

One of the most interesting things to come out of DVD producers panels at DVD at 5 and the VSDA convention is that we're going to see not more special features on DVD, but better special features.

Since the format was launched in 1997, we've seen a steady acceleration in the amount of extra material on DVDs. Documentaries, commentaries, deleted scenes, alternate endings, interactive games for the kids, interactive “flyarounds” of movie sets and more – it's a far cry from the theatrical trailers that too often were the only addition to early DVDs.

Special features are a prime selling point for consumers – although it's debatable whether the public actually watches all this extra stuff or just likes knowing that they can – and also brings the home video community closer to Hollywood's creative community, because of the involvement of directors and other creative types in the production of a DVD. Indeed, my colleague Bruce Apar went so far as to call DVD producers the “D.W. Griffiths” of our generation, pioneers in the transmogrification of video from used movies to original entertainment.

I'm as big a fan of extras as anyone – I love the cast bios, particularly on older films, and deleted scenes are right up my alley as well. My kids are also infatuated with the interactive games companies like Disney put on their children's product – to the point where they don't even want to watch videocassettes anymore.

And yet I can't help but wonder, what's next? How many documentaries on every aspect of production can you cram on a DVD before it's overkill? And while I appreciate the value of directors commentaries, do we really need commentaries by the cast, crew and key grip? To tell you the truth, I've never watched a single commentary the entire way through, preferring to pick and choose parts of the film where I maybe have a question or two (such as The Usual Suspects, which took me awhile to figure out – okay, call me stupid!).

I think we're reached our state of the art in today's extras, and I, for one, am eager to know what's on the horizon. I'm glad the panelists said better, not more—there's already far too much stuff on the typical new-release DVD than I can handle.

I know Hollywood's best minds are thinking hard on where they can go next, and I know for a fact that interactivity and Web-access are involved.

But can't some of this stuff make it to disc now, instead of yet another commentary or documentary?

One of my favorite extras of all time was the interactive map on L.A. Confidential, in which the camera took you to places in Los Angeles that were featured in the movie. That's something I'd like to see more of.

I also like the historical footage on New Line's Thirteen Days – the Kennedy speeches, the missile shots, etc. That's something I'd like to see more of.

And I really enjoyed the interviews with cast members on Universal's Creature from the Black Lagoon, to see how well (or how poorly) they aged. That's something I'd like to see more of.

Oh well. I guess I'm just going to have to wait and see.


23 Jul, 2002

THE MORNING BUZZ: Balancing Home Entertainment Devices Is All About Trading Spaces

I was talking to one of the hardware guys the other day at DVD At 5. We got to talking about personal video recorders (PVRs) and other high-density storage media, things like MP3 that hold a lot of content in a small space and make it so portable.

We agreed that Hollywood is foolish to fight or seek to control these technologies, partly because Hollywood doesn't understand the practical realities that drive a lot of consumers' consuming.

Here's a driver I think Hollywood is missing altogether: it's called "Trading Spaces." Or the British version, called "Changing Rooms." If you haven't heard of it, quick, ask nearest woman over 20 years old.

She'll tell you she's hooked on a show about two sets of partners trading their homes over a weekend and redoing a room in each other's houses for under $1,000 with the help of a professional designer and carpenter. It's inspired more than one of us to do room makeovers.

Leow's and Home Depot must be ga-ga over these shows, which drive a lot of formerly less than handy women through their doors. I've always been handy but just last weekend the guy at OSH looked at me like I was daft for telling him I needed 26, 1/2-inch, funnel-headed pointy screws. They never understand quite what I want but they do their best to help me. I did get my screws and the project looks great.

The thing I bet Hollywood is missing is that on virtually every episode, the designers redo or build some type of armoire or cabinetry to hide the TV and other home electronics. They're accepted lifestyle components but universally viewed as a disruption to the aesthetic elements of room decor.

As a result of this reinforcement, women are becoming much more assertive about how the family home entertainment center looks and, as they speak up more, I think the demand for invisible media will grow. The more you can store and hide in less space, the better. We don't want to deprive our partners of their media smorgasbords, we just don't want to see all of it all the time.

Imagine DVD content on storage media the size of digital camera memory sticks. Your whole DVD collection down to one drawer. It would become a special feature to have a large print edition package.

Imagine SonicBlue's 3,000 hours of programming in one hard drive. Pick and choose and store or delete what you wish at the touch of a button. Hide one box.

The more women have to say about it, I believe the more single-box solutions will get popular. Hollywood can fight all it wants, but the more difficult and multidevice it is to consume entertainment, the less demand there will be for those home formats.

If, as Thomas K. Arnold sometimes asserts, "he who dies with the most toys wins," then she who lives with the least clutter also wins. And we all know that means everybody wins.


22 Jul, 2002

THE MORNING BUZZ: The DVD Market According to Mom

I now am certain DVD has arrived as a mainstream product. It isn't the most recent quotes of market penetration or sales of the latest DVD release or the lauding of the product in the news media that has solidified this opinion. What, you ask, is my measure of the mainstream adoption of this new technology?

My mother is planning to buy a DVD player.

Coming from a woman who only recently got a cell phone, that's big news. Females in my family have traditionally been suspicious of new technology. (My grandmother never was comfortable with the microwave oven. She kept it in the laundry room, where its mysterious rays could not penetrate the kitchen.) Thus, when my mom tells me she is looking into purchasing a DVD player, it signals a sea change in the buying public. Heck, if my mom is willing to buy one, the technology has really arrived.

No doubt the “mom” factor will change the character of the DVD market. Our 2002 Consumer Survey shows the next wave of DVD households will be a decidedly different bunch from the early adopters. Those households considering buying a DVD player in the next year already purchase a high percentage of VHS tapes for the kids – no doubt many of these purchases by moms picking up entertainment for the little ones. Almost 40 percent of their home video purchases were for children under 12. If their habits translate to DVD, that could mean a new explosion in the family and kids DVD market.

This new crop of DVD households also promises avid purchasers and renters of video entertainment, boding well for the whole business. Sixty-three percent of that group had purchased a video in the past year, and 34 percent said they purchased at least once a month. Eighty percent of these households had rented a tape in the last year, and 57 percent said they go to the video store at least once a week.

Like my mom, these households may be coming later to the DVD party, but they look ready to hit the buffet.


21 Jul, 2002

THE MORNING BUZZ: VSDA May Have Pulled Off Bit of Magic With New Format

The VSDA's Home Entertainment 2002 annual convention ended last Thursday evening with a several VSDA showgoers coming onstage with Penn & Teller to handle various weapons fired and thrown at each other and the dynamic duo. It was a great show that, like all great magic, had some elements of danger and truly dumbfounding moments of sleight of hand.

In many ways it was a fitting end to a show, now in its 21st year, whose organizers, the VSDA, are attempting a little magic of their own to keep current and meaningful for its industry. Not an easy feat, and one, if not done correctly, fraught with danger. If this doesn't work, then what?

I'd have to say, based purely on anecdotal evidence, the new business-meeting format of the show has been received well and will give the VSDA show a new, contemporary format on which to build the annual convention's future. There was still an expo hall, albeit it significantly smaller than in years past and featuring mostly retail services and equipment, with some specialized video suppliers. There was a significant conference program and there were a couple of terrific parties and an awards celebration. But the bottom line comments from both retailers and exhibitors were that business got done, meetings were more productive and the format gave an opportunity to build closer business relationships.

Sure there were snafus and problems and confusion early on. Some of the meeting suites floors were open to all attendees (and those were very busy pretty much every hour of each day), and several floors housed suites in which one could enter only with an appointment. There were times puzzled retailers were turned away from these floors. There were times appointments were missed because retailers didn't know which elevator to take to which floor (the show had exclusive use of certain elevators to some of the floors.) And there no doubt were plenty of tired feet by the end of the event as one had to travel some distance from the conference area to the suites towers (and some distance even between towers). Although, the distance between the conference and exhibits of past shows was probably greater.

The key element was preparation. Those exhibitors who made an effort prior to the show to make contact with key customers and set meetings had full agendas from Day One through Day Three and reported great success. Those retailers who came with specific deals in mind with specific agendas would certainly have been much more successful than the retailer who came just expecting to cruise and pick up giveaways from the major studios. That's business as done in the past. The new paradigm is both more serious and personal and both exhibitor and retailer have to be willing to make the effort to make the show work and, to a large extent, they seemed to be doing just that.

I think next year's event – and I am betting the VSDA opts to continue with this format though no word yet on a date or place – will be much more successful for all concerned, since we all know what to expect and how to “work the show.”


19 Jul, 2002

THE MORNING BUZZ: Tommy Does Vegas

Reports going into Home Entertainment 2002 that it was going to be a toned-down, more businesslike affair weren't entirely accurate.

To be sure, the new format lends itself to business deals and meetings, but the party circuit was as hectic as ever, with all sorts of private, quasi-private and “come one, come all” shindigs all over the Rio and nearby Palms.

On the top floor of the Rio's Masquerade Tower, Playboy brought back the sizzling 1960s, with bunnies galore and bartenders pouring cosmopolitans and martinis.

VPD's party at the Palms had the best food, with the sushi particularly drawing rave reviews, while upstairs in the Ghost Bar, Anchor Bay entertained guests with such celebrities as Linda Blair, Lou “The Incredible Hulk” Ferrigno and director Wim Wenders.

The pool party, part of the convention proper, was packed solid with people, although there were far fewer retailers in bathing suits than at the Playboy Wet 'n' Wild parties of the early 1990s VSDA conventions (not that I'm complaining). Rio staffers also pulled the plug right before midnight, sending hordes of partiers to the craps and blackjack tables....

Another familiar face was in the crowd: Ray Jewell, the feisty Texas retailer who was one of the VSDA's leading activists in the late 1990s. After selling his five stores, Jewell left the business, but he's recently jumped back in when he moved to Athens, Tenn., and bought the town's Movie Directory video rental store. “I found the best store, in the best location, and decided to have fun again,” Jewell said. “It's not a bad business to invest in, if you're willing to work.”…

Also spotted on the third floor of the Rio, “doing the suites,” as many conventioneers are calling their daily routines, was Gord Lacey, who operates an interesting Web site called TVshowsonDVD.com. As its name implies, the Web site lists all TV shows available on DVD. Lacey, whose site is well known in DVD circles, said he came to the show to meet suppliers and hopefully familiarize them with his site. He could use the publicity: He said he recently tried to get on the HBO screener list, but was told the list was full. Incidentally, Lacey said at last count, there were more than 1,300 DVDs with TV shows on them, from compilation and “best of” discs to complete season packages....

The hottest attraction on the show floor: actress Jenna Jameson, whom the VSDA will honor tonight as “Adult Star of the Year.” Jameson was on the show floor yesterday, signing autographs. The lines resembled those at an airport check-in counter.


17 Jul, 2002

THE MORNING BUZZ: All Things Must Pass

So there we all were at Home Entertainment 2002 in Las Vegas, vexed and speculating about what will happen next in the home video industry. I came home early to shepherd some production, but I'm still with y'all in spirit.

We're looking forward, yet at the edge of the show I met a fellow who's still trying to figure out what to do with his video past.

This guy is a security guard at the Rio. We were both waiting around in the same space one evening and struck up a conversation. Occupations being an ordinary get-acquainted topic, after he learned what I do he was quick to confess his own history in the publishing profession and video collecting.

He still has half of a vinyl video collection (the ancient RCA disc format) on which he spent $15,000. Only half because his wife got half in the divorce. Still, estimates he has between 300 and 350 of these discs and has no idea what to do with them.

Aside from the fact that this guy must be the unluckiest in entertainment format history -- he also lamented a large collection of 8-track tapes -- I was struck by his interest in what happens next. I probably don't have to explain he hasn't got a DVD player. The poor guy got burned on new technology twice (that I know about) and he's still gunshy 20 years later. Who can blame him for waiting for the shakeout?

I think Disney was on the right track with an offer to refund $5 to anybody who bought selected titles on DVD when they turned in the UPC code from the same title on VHS. It's rewarding loyalty and lowering the risk threshold for reluctant consumers.

My cab driver to the airport was also a nice gentleman. Making typical cabbie conversation he asked if I was in town for a trade event (was the albatross show badge still dangling from my neck a dead giveaway or what?). When I told him which one he pelted me with questions about the politics and technology of video. He, too, seemed hesitant to get into DVD, though for different reasons than the guard.

I guess I'm jaded. I'm genuinely astonished at how many people's interest in DVD looks like mankind's first encounter with fire. I covered a terrific panel discussion on DVD extras earlier yesterday and this was a sharp juxtaposition. The panelists were concerned with the next step in DVD extras, but in conversations I suddenly realized the technology still intimidates a lot of people.

Albert Einstein once said "the single most important thing in anything is the point of view of the viewer." Unlike a lot of us, I guess his theories keep working out.

I'm glad I got two days of fascinating and diverse viewpoints at this show, even if they didn't all come from the floor.


16 Jul, 2002

THE MORNING BUZZ: With A Little Luck, the VSDA Convention Will Pull Through

Even before I got to the convention this year, bad luck plagued me. My 1 p.m. flight was cancelled (something about a broken window on the plane, I believe).

Then things turned up again as I was able to catch the only remaining flight that would allow me to make Artisan's cocktail party Sunday night. Killing time outside the Skins bar in The Palms hotel, I lost a few coins in some slot machines (bad luck, again). But good luck shined on me when I got through the first day of show daily editing fairly trouble free.

Perhaps in no year since I've attended this convention has traveling to this bastion of gambling seemed so symbolically appropriate. The convention itself is taking a gamble this year with a new model and businesslike focus.

Will it work? Preliminary – though by no means conclusive – results of our online poll aren't encouraging. Responding to the poll question, “What do you think of the new show format for Home Entertainment 2002?” Answers were:

It's great. It's the reason I'm going (7.79 percent);
It will reinvigorate the show (16.88 percent);
It won't change anything (22.08 percent); and
I'm not going to the show this year (53.25 percent).

Here's hoping the convention's luck changes.

After all, without the VSDA show, where will I get my yearly dose of disco music?


15 Jul, 2002

THE MORNING BUZZ: VSDA Show Should Get Things Done

This week the home video industry gathers for Home Entertainment 2002, hosted by the Video Software Dealers Association in Las Vegas. (The event is produced by Advanstar Communications, publisher of this magazine.) While we can certainly expect the weather to be hot, the event itself promises to be a cooler affair than in years passed. The caveat here is that this is, to a fair extent, by design. The question to be answered is, will the participants embrace this “new and improved” version of the long-standing convention?

Gone are the days of the massive trade show expo hall, with towering, multi-level booths swarmed by retailers itching to get an autograph from a movie star or a T-shirt. While there is an expo hall at this year's show, it is decidedly smaller in size. Retailers looking to get nifty studio tchotchkes, however, will come away from the floor empty-handed, since the studios have opted this year to take advantage of the new “Exhibit Suites” format introduced for this year's show. Organizers for the event have determined that the trend in the industry for the past several years has been more toward serious business meetings between suppliers and key customers, as opposed to the wild and often frenetic “trade show” environment of the past. This is a trend one is seeing in many industry trade shows inside and outside of the entertainment/media industries.

Yes, there will be celebrities and parties. Sylvester Stallone and George Carlin will accept awards, and there will be an autograph table on the show floor (though it's a decidedly smaller list than in past years). And while there will be plenty of networking receptions and parties generated by the convention itself, it seems many of the studios are eschewing the after-hours parties and other extra events that have surrounded this convention in the past. Make no mistake; this is a decidedly more business-like affair than in the past.

Besides a focus on building a more business-like atmosphere for this year, organizers have also built “tracks” for content to cram as much information into three days as possible. Certainly, DVD is the axis around which this industry is turning now, and a full track devoted to all things DVD should attract a fair number of attendees. I am also very interested to check out the “Filmmakers of Tomorrow” track, which will not only debut some 13 films by independent filmmakers, but offer sessions to help retailers understand how they can profitably play their role in exposing their customers to great films that don't necessarily gross millions at the box office.

It won't be business as usual at this year's VSDA show. The intent is that business gets done.


11 Jul, 2002

THE MORNING BUZZ: Meet the Bears and Bulls of Home Video

THE MORNING BUZZ: Pondering the Bears and Bulls of Home VideoOn the eve of the 21st annual VSDA convention, which opens Tuesday in Las Vegas, our industry finds itself with a bona fide juggernaut but all sorts of different theories on how best to ride it.

I'm referring, of course, to DVD. How powerful is DVD? Put it this way: no one questions that the digital disc will one day -- soon -- replace the VHS cassette; the only question is how soon and how completely.

I had a telling conservation with two executives recently. David Bishop, president of the MGM Home Entertainment Group, told me more than 80 percent of his studio's video sales now come from DVD. And Glenn Ross, president of Family Home Entertainment, told me that while last year's Barbie in the Nutcracker video sales were 90 percent VHS and 10 percent DVD, the split for this year's Barbie as Rapunzel will likely be 50-50.

That DVD is a phenomenal success, however, is about the only thing Hollywood's studio minds agree on.

Some executives want to beat DVD prices downward, to the $10-$12 range, for a ubiquitous presence in convenience stores, drug stores and all sorts of other retail outlets that cater to the impulse buyer.

Other executives want to push prices for new releases higher, although no one's talking about anywhere near the old VHS rental model. At our recent DVD at 5 celebration, it became clear that such a plan was dead in the water and revival appears unlikely.

Suppliers are also at odds over how best to maximize their catalogs. Some studios have already blown out most of their catalog titles, encouraged by the high buy rates of the early adopter. Other studios, like Universal, are waiting for the penetration rate to get a bit higher before they release library titles en masse.

There are also differing strategies on the life cycle of a title. Some suppliers treat DVDs like videocassettes and reprice them to $14.98 or $9.98 after six or so months.

Others keep adding bells and whistles to subsequent releases, like Artisan with Terminator 2 and now Universal with Dr. Seuss' How the Grinch Stole Christmas.

If there's a trend to which more and more studios seem to be subscribing, it's treating a DVD release like an event -- giving it that theatrical flair, presenting it to the public as something new and really cool instead of simply a boxed movie.

If that trend continues, DVD may be a resounding success already, but believe me, you ain't seen nothin' yet!