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.
Piracy is again the hot topic in Hollywood with the news of an Academy Awards screener of Something's Gotta Give getting ripped to the Internet despite a short-lived Motion Picture Association of America (MPAA) screener ban and supposedly tighter controls on who gets access to screeners.
Not that discussion has ever died down, but it looked -- for a minute -- like the heat was off at least until after the Oscars. But the screener leak re-ignited the debate when Sony found a digital copy of the film, ripped from a tagged analog screener, on the Internet.
The more cynical among us might look at the movie's $55.9 million box office over a month and assume it was a publicity stunt. Box office like that on a movie with Jack Nicholson/Diane Keaton star power is not exactly earth-shattering. Maybe leaking the screener was the only way to get anyone talking about this film.
The Academy's Web site carries a list of screeners available to Oscar voters who agree to terms of receipt that are just short of house arrest or tagging the tape with a GPS transponder. I'm not a file trader, but if I was going to steal a movie to share it with a few thousand of my closest cyberfriends, I would be going for the prestige of a 21 Grams, Lost in Translation or House of Sand and Fog, not a film that's losing steam.
The leak comes shortly after McKinsey Research came out with a warning for the content industry that movies could suffer the same fate online as music. I still think that's a bit of a stretch, at least for a year or two, but the McKinsey analyst makes the valid point that illegal downloading will ramp up to fill the content void if the movie, computer and broadband industries can't stave off a the virtual equivalent of a format war and give the people what they want -- and soon.
That means there are at least two format wars looming on the horizon, and mark my words they will overlap. Battle lines are still being drawn over high-def DVD. Internet consumers are tech savvy, they are early adopters who want the latest thing, so they will want high-def, too.
This industry has done so much right with DVD –- content, availability, pricing, marketing –- that the format has taken off like nothing before it. But Hollywood is littered with victims of their own success, and DVD could be just the next casualty if the studios can't play nice with each other and the other two increasingly important sectors in this equation.
Which brings us back to the irony of this particular title getting ripped to the Web. What a metaphor: Something's Gotta Give.
As I trekked through the enormous Consumer Electronics Show (CES) this weekend, I was somewhat overwhelmed and mystified by the numerous entities trying to bring about the digital delivery of entertainment to the home.
The industry and its detractors have been talking video on demand since I got here a decade ago, and I honestly have yet to see anything that beats traditionally packaged delivery of movies, even at this year's CES.
Many of these new technologies seem to hinge on home networking, i.e., getting a digital program from one room to another via wire or wireless. I actually sat in on an educational seminar on digital media servers, and let me tell you this stuff is complicated. There's centralized or networked systems costing anywhere from $350 to more than $5,000. The Kaleidescape system starts at $27,000.
You'll need a wired house (wireless systems are a problem for various reasons), and, from the looks of things, you'll need an on-call techie to administer and problem shoot the thing. You'll also need backup drives with your movies, songs, etc., loaded. If not, you're out of luck if your drives go bad — as they often do.
All of this makes the shiny little DVD look pretty good. Even if I had all the money in the world, I'd opt for a DVD collection rather than the much-ballyhooed network. If you're really in a crunch for space, you can ditch the packaging and just store the DVDs. You can store lots of those slim little things in the space it takes to house your server and backup drives.
The rental business may find a strong competitor in video on demand, but, as far as I can tell, DVDs will be the way to go for the movie collector for a long time to come.
One of the clear themes of this recently concluded Consumer Electronics Show is that hardware manufacturers are preparing for the day when consumers look to some device, probably more PC-like than CE-like, to manage and distribute the various digital media they consume, not only at home but while mobile.
Walking the aisles of the vast expo halls, sitting in on some of the sessions focusing on content and content management, it's funny how few times I heard or saw the acronym DVD. It's not that suppliers or retailers here necessarily believe DVD is a technology on the wane. Indeed, the headline in one show daily proclaimed 2004 as the year of DVD recorders.
I write this even as the home video industry celebrates a record year for packaged DVD and its overwhelming dominance as the entertainment medium choice of the planet at large. And I think 2004 will continue to see DVD make major strides toward a 70 percent-plus household penetration in the United States and far outpace other entertainment media in growth and consumer dollars spent.
But I do think that digital technology is making suppliers of hardware markedly more agnostic as to the delivery of the content. That is, the CE/PC media business is developing products that meld consumers' interest in consuming media from a variety of entry points: be that packaged media (DVD, CD); hybrid packaged media (think how many games are now being developed with online components, how many DVDs have ROM extras, how many music publishers are combining CD/DVD); Internet-based streaming/download services (sticking just to movies we can cite Movielink and CinemaNow as starters and brand specific services like Disney's own Movie Beam); and the plethora of cable VOD, and telco and satellite delivery services that are, by the way, quickly jumping on HDTV.
Now take these delivery options now available and then add on the impact of the PVR/DVR (digital/personal video recorder, i.e., Tivo and ReplayTV) where you can control how you view nonpackaged media and throw in software that lets you organize this variety of content from all of the sources mentioned in the previous paragraph and distribute and manage that content from as many different platforms as you can imagine both inside and outside the house, and you have an idea of what the future looked like at this year's CES.
That's certainly the vision Bill Gates outlined during his keynote at this year's CES, and Microsoft's Media Center technology is at the nexus of this trend.
What does all of this mean for the packaged home entertainment software retailer? First of all, I believe that the current generation will continue to gravitate to packaged media from a “collectors” mentality, and also that packaged media will be the higher-quality and better-selection choice (over pure digital online/VOD delivery) for home entertainment in the next several years, even if it is copied and stored on some sort of server. But it also means that you need to continue to seek ways to make your services more convenient and, where possible, integrated into the digital lifestyle the growing majority of your customers live today.
It was bound to happen, but I saw it for myself for the first time as I was driving home from work and heading for vacation for the Christmas holidays: Some numbskull had recorded the early-morning Golden Globe nomination announcements and was playing the show back on their minivan’s DVD player on the drive home. I know because I was behind this neck-craning idiot, and it was clear there was nobody in the car except the driver. And this was not inching along the freeway, it was stop-and-go around the South Coast Plaza mall in pre-Christmas shopping frenzy traffic. Watch for Natural Selection to kick in as this becomes more common. But at least that idiot is ticket bait now, at least here. A law banning front-seat video displays in cars just took effect in California.
Even before I left for the holidays, I knew that DVD would figure big into my family’s festivities. Besides the fact that my niece and nephew give me lists of the DVDs they want for Christmas, I had turned them into lab rats over the Thanksgiving weekend, sitting them down to play the Scene It? game. One evening of that was enough to convince my niece that she wants one, so that made it onto her list as well. My nephew, 15, struggled with it a bit, though. He got a DVD question that listed five character names and he was supposed to name the actor who played them. Not only was he unable to answer the question, but when the disc put up the answer, he looked quizzically at the rest of us and asked, “Who’s Warren Beatty?”
Nothing spreads a little holiday cheer like discs of holiday cartoons. I love the traditional favorites we waited all year for as kids, but now it’s more fun to bake cookies or hang with the family while watching SpongeBob SquarePants Christmas or Christmas With the Simpsons.
Finally, I expect this is the last holiday season any of us will write much about VHS. This is based partly on things I have said before and also on a couple of family members’ Christmas lists, in which they requested specific titles on DVD to replace the same title on a tape they couldn’t wait to get rid of. I don’t care what the whiners and ostriches say, VHS is dead. Over. Done. Fini. Or, as John Cleese once said of a Norwegian Blue Parrot, “It’s bleedin’ demised!”
On that note, I wish you all a Happy New Year.
I've taken some heat for last month's prediction that rentals will drop off in 2004 as sellthrough begins to impact the market. I've made the point in this space before that rentals compete for consumers' time. There are only 24 hours in a day. Consumers are buying more and more DVDs — for gifts and for themselves — and it looks as if they are renting less, according to the big rental chain's reports.
It's not just that consumers may be buying titles instead of renting them. That's not the whole picture. There are more viewing opportunities in the home, many directly resulting from the growing sellthrough DVD market. Consumers can watch DVDs they already own again, those they borrow from neighbors or the hours of extras on those DVDs. Just think about the hours of free time a TV series on DVD can swallow. A rental isn't just competing for viewers' time with a single sellthrough title viewing, pay-per-view or video-on-demand, it competes with all the other entertainment pastimes viewers can pursue to fill up that 24-hour day, including added viewing of DVDs they or their neighbors already own.
In my own neighborhood, kids move from house to house watching DVDs in each other's libraries. I don't know how many times my daughter saw Pirates of the Caribbean over the holidays, but it wasn't our copy she was always watching. My neighbor came to a gathering humming “Just Keep Swimming, Just Keep Swimming…” from Finding Nemo because it was running in a continuous loop at his house.
I know this has been a phenomenon with kids for some time, but it happens among the adults in the neighborhood, too.
Now, this doesn't mean the death knell for rentailers. They can join the sellthrough juggernaut, too — and they have through sales of previously viewed DVDs. One retailer wrote me that pre-viewed title sales have more than made up for any drop-off in rentals at independent video rentailers — and that market, like rentals, is uniquely theirs.
If “re-gifting” was all the rage this holiday season, (and I wonder how many DVDs got passed around in this process) I got a kick out of a couple of other observations that played against the whole holiday gift churn that doubtless home video retailers may see some of this post holiday season.
You had to laugh at the report about the Sam Goody store promotion at the Mall of America in Bloomington, Minn. In this “Sam Goody Bad-Gift Boycott” the store offered to exchange gift cards valued up to $500 for any unwanted gifts shoppers brought down to the store. Legions arrived with their bad gifts and created a mountain of merchandise in return for a gift card for new music or video.
For kids not living in Bloomington who couldn’t join the rush to return the days after Christmas, I noticed an odd little phenomenon going on in my own neighborhood that I bet was being played out around the country. On two different occasions, kids attempted to flag me down to buy a cup of lemonade (for a small fee) as I drove past. (The “winter” weather in Southern California accommodates the notion of a roadside lemonade stand in December.) And on another day, I saw kids waving a “Car Wash” sign ($5) even as rain clouds gathered. Meanwhile, even my youngest daughter was busy working for a neighbor real estate agent stuffing envelopes to earn money for a scooter she saw one of her friends get for Christmas. (Hey, we bought her a nifty little stereo for her room, and the family got a PS2 and she got plenty of games, so don’t blame me.)
Yes, indeed, if you can’t re-gift and you can’t return, then just get out there and earn enough money to buy your own present if you are suffering from some form of Christmas gift envy.
Chances are there will be plenty of action on the DVD front this post-holiday returns season as one of the most popular gifts of the season will likely mean that a sizeable number of people got DVDs they either owned already or don’t care to see (but would gladly exchange for another title).
Meanwhile, doubtless few of us would exchange 2003 for some other year in the home entertainment business. It was a stellar year overall for home video. Let’s hope 2004 can achieve similar heights.
Happy New Year.
The past year gave the video industry much to cheer. We saw the DVD business pass the 50 million household mark and DVD households continue to buy at the much the same rate as early adopters. The sellthrough DVD juggernaut didn't slow as many had predicted. Rentals hit a few snags, but continued to hold fairly strong despite a sea change in the business.
DVD player prices hit a new low -- some priced less than the very DVDs they were designed to play. Low-priced DVD players were everywhere during the holidays, loss leaders for such discounters as Wal-Mart, much as DVD software titles had been the whole year.
“This was the single biggest growth year in DVD households we've ever had and ever will have,” said Craig Kornblau, president of Universal Studios Home Video to Video Store Magazine recently.
Indeed, it's hard to believe there will be growth that can top this year. But when I look back over the past few years, we've consistently been surprised by the success of DVD. Could the little disc pull off another corker?
Here are my humble predictions.
* 2004 will again surprise retailers with households' continued interest in buying DVDs. The household buy rate will slow very little.
* Rentals will finally take a visible hit this year, as consumers prefer to buy rather than rent. But the rental falloff will be overblown by Wall Street, and retailers will be able to recoup much of the loss with previously viewed title sales.
* Used DVD trading will grow as retailers and consumers catch on that an old DVD is almost as good as new -- and it's a lot cheaper.
* Software and hardware that helps consumers transfer home movie cassettes to DVD will grow like never before.
Those are my top trends for 2004. I'd love to hear from others about their predictions for the New Year. Readers?
For as long as DVD has been on its meteoric rise, industry executives from studios and retail have been cautioning colleagues not to prematurely abandon the VHS business. Of course consumer demand, brought on by a higher quality and better value product, and retailer buy rates, fueled by a more attractive ROI, spurred DVD to become the most successful and fastest growing consumer electronics technology ever. Still, until this year, VHS commanded the majority of rental revenue while DVD took over the sellthrough business.
Earlier this year DVD overtook VHS in the rental business as well, and its been gaining ground ever more quickly in that space, while now completely dominating the sellthrough business. And while I have been a strong proponent of encouraging both retailers and studios to continue to maximize the return on VHS, it's clear that this format is on its last legs and is losing support from both retail and supplier alike. That is made very evident when Disney, long the bastion of children's programming, a genre which was tardy coming to the DVD party for obvious reasons, sees its titles soar on DVD and trumpets that success.
Indeed, it's fair to say that 2004 may be VHS' swan song.
Our most recent reader poll on this web site shows the level to which VHS has fallen on the retail front. When asked what percentage of you product mix VHS would be next year more than 57 percent of the responding retailers said less than 10 percent. Only 10 percent of respondents said their mix would be 50 percent or more.
This week's edition of Video Store Magazine talks about the imminent demise of VHS. While major chains such as Best Buy and Circuit City eschew the format, smaller chains like Tom Warren's 10-store Video Hut in North Carolina are also watching VHS dwindle before their eyes. Warren, also the chairman of the board of directors at the VSDA, says he expects VHS to account for about 18 percent of his rental business and less than 5 percent of his sales next year.
A little more than a year ago VHS accounted for about 66 percent of the total rental business, according to Video Store Magazine. That share has dropped to about 36 percent. Next time this year we could be looking at a number that threatens to be in the single digits.
Needless to say, there is still money to be made renting VHS and likely there will be niche markets around the country that, for demographic reasons, still may do alright with the format for several years to come. Meanwhile, however, I'll be interested to see how the industry goes about disposing of this remaining VHS inventory in the coming months.
You've got to love the elaborate DVD gift sets the studios are coming out with this holiday season. Taking square aim at the collector mentality that's prompting people to buy movies in record numbers, the studios have assembled a formidable array of cool multidisc sets that include all sorts of extras — and we're not talking the electronic variety.
My three favorite add-ons shoppers can find this year with their DVDs:
1. Gollum. A collectable statue of the ugly little creature comes with the fancy The Lord of the Rings: The Two Towers gift set, from New Line Home Entertainment.
2. Tony Montana money clip. Packed inside the deluxe gift set of Scarface, from Universal Studios Home Video, this gold clip is engraved with the monogram of the doomed drug lord portrayed by Al Pacino in the classic Brian De Palma thriller.
3. The historical documentary Here's Looking at You, Warner Bros., a great video recap of one of the all-time great movie studios that's available only as a bonus DVD packaged with Warner Home Video's Warner Legends Collection, which contains three of the greatest movies ever made: The Adventures of Robin Hood, starring Errol Flynn; The Treasure of the Sierra Madre, with Humphrey Bogart; and Yankee Doodle Dandy, starring James Cagney.
That said, I am signing off for the rest of the year. Let me close by urging you to check out our year-end issue of Video Store Magazine, in which we recap the year with a chronological rundown of the top stories, month by month, and then put on our thinking caps — and ask key executives to do the same — for an exhaustive analysis of what it all meant.
Until next year!
By: Thomas K. Arnold
I had a minor surgery Friday, which in itself was no fun at all. But it gave me a rare opportunity to veg in front of the TV catching up on some unwatched DVDs, guilt free.
After all, one of the reasons we collect DVDs at all is to watch the stuff we've missed while we were too busy interacting with humans to sit in front of the one-eyed monster. But that opportunity, at least for me, seldom presents itself. So I spent much of my weekend immersed in old favorites, guilty pleasures and new fare I just hadn't gotten around to yet.
I was surprised at how much I liked Pirates of the Caribbean: The Curse of the Black Pearl. I mean, how much mileage can you get out of a story built on a seven-minute theme park ride? Quite a bit, it turns out. I expected Johnny Depp and Orlando Bloom to be the only reasons to watch this flick, but it turns out the storyline was amusing and the references to the ride sprinkled throughout worked much better than I thought they could. I'm not sure how many more rides Disney can milk for movie plots — “It's a Small World” is maddening as a ride, so a movie would almost have to be saccharine-sweet.
In any case it was great relief from Pirates of the Middle East, aka the Saddam show. Call me cynical, but that capture was awfully coincidental with the revelation that Halliburton overcharged the government $61 million for fuel deliveries to Iraq. Time magazine managed to have a photo of Saddam on its cover on newsstands Monday, a feat that should win an Oscar for best choreography.
I switched off the news and retreated to Gigantic: A Tale of Two Johns. Plexifilm's rockumentary about the surreal band They Might Be Giants was a little too long, perhaps, but any fan of the band should see it. We've always known these guys were a half a bubble off plumb, but this movie makes us thankful for it.
I caught up on some episodes of Paramount's “CSI” series. I had started watching with the first season, but other priorities drew me off before I could finish the second. The show is great fun and great to keep your mind occupied while laying on the sofa convalescing with a warm dog in your lap.
I plan to watch more over the holidays — between parties and family gatherings. But it was nice to have some time to catch up before that.