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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 Dec, 2003

R.I.P. VHS — Really

The Black Friday weekend had lessons for us all. For example, Wal-Mart sales were up 6.3 percent, a good sign for the low-end retail holiday as long as consumers didn't spend it all in one weekend.

My lesson screamed from every corner, but it was the same from all of them: VHS is so, so — how would Jim Carrey put it? So-ho-ho-ho over. Dance on its grave over. Dump them before you have to pay a recycling charge over.

The rumored $12.99 DVD player did not materialize at Target, at least in my market. On the other hand, it did have a compact progressive scan model by Cyberhome with a remote control that looks like the cockpit of a blinkin' 747 for $35. Long's Drugs had a slimline player for $39.99 with a $15 rebate to bring it down to $25.

I talked to one of my friends over the weekend. He's not a particularly early adopter. Still, he commented at one point, “I think of VHS as the 8-track of movies now.” He's had a DVD player since last Christmas. The National Retail Federation said Monday DVD players are the top electronics gift this year, with 8.4 percent of shoppers saying they will buy one for a gift and another 7.3 percent planning to buy one for themselves.

I went to the flea market Sunday. This is a pretty good-sized market; it takes an hour and a half to walk it all on a fast day — which this was. There were only two stands selling more than one or two DVDs. One had old Hong Kong titles in bare bones editions for $5 each, and the other was a family stand selling off rental titles from what was probably their weekday business (I judged this from the copy depth and hand-numbered spot tags on each case); $7.99, or two for $11.99, three for $18.99. I noticed Dreamcatcher and Punch Drunk Love in the mix, and I didn't see that stand until late — it was clear they had sold plenty. The stand was still a beehive when I passed by.

On the other hand, VHS was at every other stand and not moving at any price. Not even the kidvid in vinyl keepsake cases was going anywhere. Little kids were looking at their parents quizzically when mom or dad pointed to a Barney title or cartoon on VHS.

Face it, folks, when kidvid is selling three for a dollar at every third-world fruit stand in a flea market serving a city of 200,000 and none of it is moving, it's time and past to get out.

DVD player prices are so low this year that there's no point in VHS any more. With DVD recorders down as well, anyone still keeping VHS is on borrowed time.


1 Dec, 2003

If <I>I&#39;m</I> confused &hellip;

I know I'm supposed to be all-knowing about the video industry, but I have to admit, I'm confused by the digital recording devices out there.

With regard to DVD recorders, do I want plus or minus? Do I need both? Should I get a DVD burner rather than a DVD recorder? Should I get a digital tape camera? Will it transfer easily to a DVD burner or DVD recorder? How do I transfer the data from tape to disc? How will our home movies play on our DVD players if we burn them?

My instinct is to ignore the whole thing until it becomes more clear, and I bet I'm not that different from the typical shopper in that regard. I'd love to put all of our home movies on disc; it would clear a large space on my shelves. But I just don't have a clue on which recording device to spend my money.

With DVD player prices at new lows this year, the transformation from cassette to disc will accelerate. But the final element in that transformation is DVD recording, and I'm afraid the industry and retailers have done little to help consumers understand the disc recording devices out there.

And if I'm confused, those who don't work in this industry are likely befuddled as well. While slick commercials about DVD recording grace the airwaves, those who walk into a retailer to purchase a recording device will likely find it's harder to make a decision than it may seem. With all the success that DVD has had, it would be a shame if the industry bungled the last piece of the disc revolution.


1 Dec, 2003

A &lsquo;Retailer-Led Craze&#39; Start to the Holidays

A woman in Orange City, Fla., got trampled last Saturday in a Wal-Mart as crowds rushed in to get their hands on one of the $29 DVD players on sale. She was found, unconscious, atop a DVD player, and was rushed to a hospital where she was reportedly kept over the weekend.

And so the holiday shopping season begins. I was in my local Target store over the weekend, and the DVD shelves already looked a little thrashed even as at least a dozen people were quickly scanning the titles for discounts.

Analysts have been mixed about this season's prospects for retail performance, even as indications of an economic uptick continue to come in from various economic indexes (although try telling that to the unemployed).

But it appears that DVD hardware and software will likely enjoy a stellar run at retail, even as retailers discount to bring in the customers. Those bargain-basement DVD prices retailers were promising (reported in last week's Video Store Magazine), at least in the aforementioned Wal-Mart's case, certainly did what it was supposed to do. Indeed, Wal-Mart reported slower-than-expected sales in October, and Lee Scott, chairman and CEO, is quoted in this week's issue of Video Store Magazine as saying he thinks consumers will continue to be cautious in their spending over the holidays.

The NPD Group's chief industry analyst, Marshal Cohen, said, in the same article, “Lately, we've seen an absence of retailer-led product crazes …” in saying he thought consumer shopping excitement was tepid.

I'd have to disagree. This year, I think DVD is already proven to be the retailer-led hot item for the holidays, as both hardware and the hot new DVD releases are being offered at huge discounts. It still has a high perceived value and, in these uncertain economic times, is right in the sweet spot pricewise as far as gift giving goes.

With hardware pricing plummeting and studios throwing some of their biggest 2003 hits into the season, it's going to be a very busy four weeks, indeed.


27 Nov, 2003

Storage, Not VOD, Is DVD's Biggest Challenge

A friend of mine has the solution to his bulging DVD collection: He’s buying a massive new computer with a hard drive of more than 200 gigabytes so he can put all his movies on his computer and then either sell his used discs or chuck them.

Granted, he has nowhere near the library that many of us have—I think I’m over 2,000 now, at last count—but it’s certainly an intriguing concept that bridges the gap between packaged media and electronic delivery.

The fact of the matter is, DVDs are so cheap—you can choose from a vast selection of quality, major-studio catalog titles for as little as $5 at virtually every big chain retailer—that I’m convinced that when true video-on-demand finally does come around, it won’t get nearly as many bites as experts predict simply because of the price.

Charge me $4.99, $3.99 or even $2.99 to watch a movie once and I’ll tell you why bother, when I can probably pick up that same movie—or one just as compelling—for a couple of dollars more. In the old VHS days, the biggest argument in favor of VOD was that people hate making return trips to video stores, hence the periodic appearance of disposal or limited-play software that you buy cheap and then toss when you’re done.

But DVDs have become so cheap that a lot of people I know who used to rent now choose to buy—and the significant thing here is that they buy not to collect, but simply to watch. If they buy a disc for $5, who cares if they chuck it, it’s still cheaper than renting a video and taking the time, and the gas, to bring it back. Even hot new releases are now routinely on sale for less than $15 and, again, the incentive to buy is furthered by the fact that everyone wants to see this hot new release so why not pass it around to your friends instead of making them go out and rent it?

In any event, people are buying DVDs like crazy, and the biggest obstacle to the format’s continued soaring growth is not the hassle of taking something back to a rental store, but of finding a place to sock it away in your home. The average home movie library is mushrooming, but ultimately there will come a day when consumers simply run out of room and say, “No more” (something my wife first said back in the fall of 1999, if my memory serves me correctly).

This concept of buying, downloading and then either reselling or chucking is quite interesting because it lets consumers override that one obstacle and continue happily buying away.

Storage problem solved, and you’ve got, well, video on demand, right there in your own home.


25 Nov, 2003

Livin' La Vida Corporate

For a couple of weeks I've been kvetching about how studios count things. But since then I've had an epiphany.

A bunch of years back, when the U.S. government sunk bazillions into Chrysler to bail the company out, Arlo Guthrie had a song about how he was changing his name to Chrysler. Somehow that song came back to me, and I realized that all these years I've been doing it wrong. So starting tomorrow, I'm declaring myself a corporation -- Holly J. Wagner Inc. -- and let me tell you, some things are going to change.

1) Starting tomorrow, I want to collect my paychecks in EBHITDA. That's Earnings Before Health Insurance, Taxes, Depreciation and Amortization. Heck, corporations report earnings sans liabilities all the time, why can't I? I want to live like the rest of the industry, in a world where your paycheck is what it says it is before all the stuff you wish you didn't have to pay for.

2) The company and I already have a revenue-sharing agreement. I show up for work based on faith that I'll get a paycheck two weeks later. Note to Self, Inc.: renegotiate agreement for more on the front end.

3) The content industry's measurements of “lost sales” have eluded me until now, but suddenly I see it. In fact, it's an incredible opportunity to fill gaps between unrealistic projections and actual results. From now on, I'll do the minimum, rehash what I've already written and generally skate. If my bosses complain, I'll just tell them it's “lost copy.” Those are the stories I would have gotten if I'd gotten off my ass, but I was busy figuring out how to get paid for yesterday's news.

4) In fact, “lost copy” opens up a treasure trove of goldbricking. It's a lot like “the dog ate my homework,” but better. It covers getting beaten by the competition, not getting phone calls returned, not trying hard enough, missing deadlines, stories I pitched that got rejected and stuff I've written that gets cut.Yeah, from now on call me Ms. Wagner. I'm a corporation.


24 Nov, 2003

Consumers Have Little Excuse Not to Buy a DVD Player This Year

Consumers really have little preventing them from buying a DVD player this year. For the first time, the players cost the same or less than many DVDs. Web sites have hinted at DVD player prices on Black Friday (the big shopping day after Thanksgiving) as low as $12.99 -- that's just a little more than the price of a movie ticket in many areas. In holiday circulars this Sunday, I saw several discounters advertising a low-end player for about $30.

While we've become accustomed to DVD prices as low as $5.88 (Wal-Mart, of course), I've frankly been shocked at the freefall in DVD player pricing. For $30, consumers can give most of their friends and family members a disc player. At $30, DVD fans can buy players for multiple rooms.

DVD player household penetration should get an enormous boost this holiday season, as shoppers snap up these cheap players. According to Video Store Magazine market research, last January sellthrough unit sales registered $1.26 billion -- the biggest tally so far this year -- thanks to post-holiday buying. This January should be a corker as well, as consumers buy software to try out their new DVD players or replace their VHS libraries with discs as they make the final leap to DVD.

And the final leap to DVD is getting easier and easier. Lack of recordability is no longer a roadblock. Along with low DVD player pricing, this year brings DVD recorders at reasonable prices for the first time. I saw several in the $350 range. I bet many a family will buy a DVD recorder this year, and, like the frequently seen commercial, transfer all their home movie videos to DVD and toss the VCR.

It's looking more than ever like the long-dominant videocassette is going the way of beta.


23 Nov, 2003

Interactivity Adding to Perceived Value of DVD

Fantasy is what the movie business was built on, and on which it continues to thrive today.

We go to the movies for a lot of reasons, but the primary visceral experience of immersing ourselves in another made-up world for a few hours lies at the heart of why the big screen and the tremendous strides in sound have such a draw for us. Though home theater systems with surround sound and higher-quality TVs are better than ever at creating the movie experience in the home, creators of DVD have another opportunity to add to that immersive experience through the various bonus materials they develop.

The point is to add layers of information and emotion to our passive experience of the actual film. And one of the best ways to do that is to engage us directly in the film by interactivity -- getting us to “lean forward” and interact with the characters and story line rather than just lean back and watch.

There has been, over the course of the past couple of years, a definite advance in the level and quality of these bonus materials, with the most notable, in my opinion, being some of the more “lean forward” interactive extras studios have spent considerable time and effort in developing. Being a digital medium, it certainly makes sense to develop interactivity on DVDs, but the catch is always, of course, time and expense versus how much perceived value it adds to the total product. That has always been the challenge for studios, and it continues today.

But it is heartening to see, as senior reporter Enrique Rivero outlines in his report in this week's issue of Video Store Magazine, that studios are pursuing greater advances in interactivity on DVD when it makes sense to do so. As one would expect, it makes most sense for high-profile kids and fantasy/action films where developers can easily re-create and manipulate characters and images, and create lots of side story lines, to carry an interactive element. Games, of course, are the popular interactive element here, and now with The Hulk, there is a closer synergy between the branded console game and the DVD-related game than ever before.

Others, and I have to admit this includes one of my favorites, are more about creating something new based on the movie or program. I have always been smitten by DreamWorks' bonus feature on last year's Spirit: Stallion of the Cimarron, in which one could build their own movie scene using segments from the movie and recording one's own voice and even putting in one's own photos. I just thought that was the coolest thing I had ever seen.

I was a bit puzzled that when the ads for Spirit broke, at least what I saw on TV, nary a mention of this very nifty and unique extra was made.

I think consumers take it for granted that most DVDs will have bonus features, but I hope that as suppliers continue to push the envelope on interactivity they take more time in their marketing to promote some of the truly great stuff that's being developed and that adds to the perceived value of DVD.


20 Nov, 2003

DVD&#39;s Double-Digit Gains May Be a Thing of the Past

Are the glory days coming to an end? Once again, we're seeing record growth in DVD sales and the biggest home entertainment revenue pie in the history of home video, expected to top out at nearly $25 billion in consumer spending.

But privately, studio executives are a bit tempered in their enthusiasm. The United States added 17 million DVD households this year, the biggest jump ever, both in actual numbers and in percentage. Now that DVD has pushed its way past the 50 percent mark, however, don't expect to see such a dramatic rise, ever again.

That means come January, those of us expecting the growth curve to continue trending upward will be in for a big surprise. When January player sales reports come in, the total number of players sold might be lower than last January. And while software sales are expected to continue going up, the growth curve will likely begin to level out -- because no one has as voracious an appetite for DVDs as the household that's just bought its first player.

So that's my projection for 2004: flat or lower player sales, and just a slight uptick in software sales -- nothing like the double-digit gains we've seen each year since the format was launched.

Buy rates will likely stay strong, at least for awhile, but sooner rather than later we're going to see a decrease there, as well. Fewer new DVD households will be coming online, while existing DVD households will start running out of room.

Don't get me wrong -- DVD will keep the business strong for several years to come. The home entertainment pie will keep getting bigger, and buy rates won't ever sink to the levels they were in the VHS era, when at sellthrough's peak the average consumer bought five movies a year.

It's just that the increases won't be as significant as we've grown accustomed to.

Yes, folks, the novelty is beginning to wear off.


18 Nov, 2003

A Tale of Three Discs

Against a backdrop of Internet file trading, content industry leaders love to decry the loss of money to downloading. Spokespersons for the music and movie industries alike always talk about how their industries suffer from “lost sales,” then attribute it all to file sharing.

But unquantified “lost sales” in themselves are not enough to justify the copyright land grab in which content providers are engaging these days, because there's more to it than that.

For one thing, let's not forget that Internet penetration in a lot of places isn't nearly as high as in our media savvy population centers. There's still a lot of people who pirate movies the old-fashioned way, by making tapes or ripping DVDs. Many of those master files are never transmitted over the Internet.

But politically, the Internet is a tailor-made scapegoat for outdated business models. It is, to paraphrase a great quote, the last refuge of scoundrels. Not only the scoundrels who download free stuff they shouldn't, but the scoundrels who pay huge sums to politicians to preserve their rights to sell the works of long-dead content creators and keep those works out of the public domain, forever if they can.

The Internet is a vast space that politicians little understand, so I think most of them are all too glad to let their political contributors decide how it should be run. That's much easier than trying to understand the medium and separate fact from, well, exaggeration, at least.

The record labels have “lost” sales to bad business decisions and resale of used discs for well over a decade (Garth Brooks and Metallica spearheaded failed efforts to have the law changed so they would get a cut of resold CDs as well as first sales). That's why it was so easy for music retailers to move into doing the same thing with DVDs. Consumers want more for their money, and the music industry kept giving us less and less.

If Blockbuster Video CFO Larry Zine is right and a quarter of the DVDs sold in the U.S. are used, that's a lot of “lost sales” to the studios that are not attributable to downloading -- or any other illegal activity, for that matter. It's simply consumers making a choice.

Now let's look at three discs that all sell for about the same price: a CD, a DVD and a pizza. They all serve different needs for different people at different times. Some people can afford to buy all three on the same Friday night, but many have to choose. Nobody cries foul about “losing” the sale of a CD or DVD because a consumer opted to call out for a $20 pizza one Friday night instead.

All industries “lose” a certain amount of sales to consumers just making different choices on how to spend their money. It's called “capitalism.” Get over it.


17 Nov, 2003

DVD Brings Holiday Cheer

Jobs may be in short supply, consumers may be keeping a closer watch on their wallets and retailers may be nervous, but the DVD holiday season seems to be off to a great start.

Buena Vista Home Entertainment's release of the Pixar hit Finding Nemo has set a record, according to the studio, selling 15 million DVDs in just two weeks to become the No. 1 DVD of all time. Keep in mind that number has been set with only 50 percent of households on the DVD bandwagon. When household penetration reaches what it is with VHS, disc sales numbers look to go through the roof.

But back to this holiday season, Nemo's number bodes well for disc retailers. DVDs are a great, value-priced gift that should appeal to cost-conscious consumers and those on their holiday list. DVD player prices should hit rock-bottom this season, and DVD recorders should for the first time be priced within reasonable reach of many households — adding further wind to DVD software sails (and sales).

While pundits and retailers are spooked by a possible slowdown in consumer spending, there's nothing scary about the DVD holiday outlook. The DVD should spin a Merry Christmas for disc retailers.