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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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11 Aug, 2002

THE MORNING BUZZ: Poll Shows Avoidance of New <I>Smoochy</I> Plan

“What's old is new again” might be one way to look at the various swoops and turns some studios are taking as they look for financial models that make sense in this topsy turvy, VHS-to-DVD, rental-to-sellthrough world that is home video.

They can and will try all manner of approaches to what they perceive as a problem – not getting what they feel is the appropriate return from the market – but if the plan doesn't make sense to retailers, its chances of working are slim.

Warner is trying something “new” by returning to the old goal system for VHS titles, testing the concept on Death to Smoochy and Monday Night Mayhem. The new goal program, admittedly a test for Warner (the Oct. 15 release of Warner's Insomnia has VHS priced at sellthrough), is designed primarily to help the studio reach what it deems acceptable revenue numbers from its rental store customers, since it was not getting enough volume action under the flat-rate price program. The goal program, the studio said, helps it realize the numbers it apparently needs on the title for those that buy small amounts and allows those who buy more to realize the lower price if they hit goal.

Well, it doesn't seem to be making much sense from the retailer's viewpoint, if one considers an informal online poll taken by Video Store Magazine this past week on Hive4media.com. Asked, “What do you plan to do about Warner's ‘Death to Smoochy' under the new pricing plan?” the consensus was pretty clear from more than 80 percent of the more than 100 votes cast: avoid the Warner plan or avoid the title altogether.

The poll showed that 49.45 percent of the voters said they'd “buy the title sideways or at a mass merchant; 32.97 percent said they'd “boycott the title” altogether; 14.29 percent said they'd “buy more through my usual channels,” while 3.3 percent said they'd “buy less through my usual channels.”

Okay, this is not meant to be anywhere near a statistically valid piece of data. However, the significant majority holding out against the plan is at least an indication Warner may have some challenges ahead if it intends to roll this program out with other titles.

Then came the news last week that Columbia TriStar Home Entertainment is embracing a return to revenue now including DVD and VHS for specialty retailers. (CTHE is also returning, albeit temporarily, to its old relationship status with distributors, but that's another story…also on this week's print edition cover.

At first blush the new rev-share deal appears to have balanced opportunities for retailers and the studio; the program is designed to give retailers a chance to more affordably serve their VHS customers, while limiting DVD buy to no more than 45 percent under the program, another nod to trying to keep VHS from being prematurely excised from the market due to DVD pricing. But the program also seems to help protect the studio's sellthrough DVD business in that under the program, rentailers must wait 45 days before they can sell their DVDs as previously viewed, which is much longer than rentailers have been waiting to turn at least some of their DVD rental inventory into sellthrough.

The home video business continues to transform as DVD marches onward in its conquest of the home entertainment market. Studios and retailers will be trying all sorts of new things to find the best financial model for them. But in this fluid environment any concept had best adhere to the “win-win” philosophy to have any chance of succeeding.


8 Aug, 2002

THE MORNING BUZZ: Going Retro

TV shows on DVD are certainly a hot category. There's a Web site devoted solely to cataloging the various TV programs that are available on disc, appropriately called TVshowsonDVD.com, that at last count has more than 1,400 titles.

Retailers are anxiously awaiting the HBO Home Video's upcoming release of the third complete season of “The Sopranos,” while the second season of “The Simpsons” remains an exceptionally strong seller, even with all the big theatrical competition.

And my e-mail basket contains a pitch from Columbia House, the mail-order video seller, that is headlined, “Your Favorite Television Series Now Available on DVD or VHS.” There's a hot link to the Columbia House Web site that takes you right to the heart of TV land.

On a personal note, I'm going nuts at home, watching the complete first season of “The Outer Limits,” a Twilight Zone-esque series popular in the middle 1960s. There are 32 episodes, each nearly an hour long, on the four-disc set from MGM. I'm going to watch as much as I can as often as I can until I'm done.

What's behind the sudden appeal of vintage TV shows on DVD? Like music videos, this is a genre that never really caught on in the VHS-only days. But while DVD's superior sound is what did it for music video, it's the format's higher capacity that is making DVD such a natural conduit for TV shows. Our publisher, Don Rosenberg, is a big “Twilight Zone” fan, and he's ecstatic that the series is now available on disc (from Image). “I've got most of them on VHS, but one season takes up a whole shelf,” he said. “There just isn't room.”

I should point out that on DVD, the entire first season of “The Outer Limits” takes up about two inches of shelf space.

TV shows are the comfort food of our generation. We grew up with these shows, and we love them like a cherished friend. We all have our own favorites – me, I can't get enough of “One Step Beyond” (available on DVD through Slingshot Entertainment), “The Outer Limits” (MGM), “The Sopranos” (HBO), “Oz” (HBO), “The Twilight Zone” (Image) and “Alfred Hitchcock Presents” (Universal).

The problem is, we never had an easy way to access or store them, short of using up gobs of space by collecting the videocassettes and then trying to file them away in some sort of order.

DVDs, on the other hand, are great—particularly those “complete season” packages, or even single discs with four or five episodes.

The technology revolution that's putting all sorts of new devices into our homes—from cell phones and Palm Pilots to DVD players and TiVo – is making our society's space crunch even more pronounced.

When it comes to deciding what to collect, size does matter.


6 Aug, 2002

THE MORNING BUZZ: Dispatch From A Video Safari

Today our safari travels to a nearby Kmart, where we will attempt to sneak up on the latest home video release in its natural habitat, the home electronics department.

Our prey is elusive, at first hiding and difficult to find in the jungle of the Super K stockroom. We plod through thickets of school uniforms and endless shoebox pillars before we see it, hiding in plain sight: Our display is cleverly camouflaged in a plain, brown box to blend in with the environment.

We expect to find the displays traveling in pairs, but today we only find one. We wonder where its mate is and our guide -- aka the Kmart manager -- hasn't seen it either. So for now we study the solo display and we'll look for its mate later.

Our guide uses a large dolly to herd the display to its preserve on the sales floor. There we crack the cardboard shell and coax the display out of its defensive position. We make a few deft folds. We insert a few Tab As into Slot Bs and the display begins to show its plumage, transforming from a simple box to a hut-shaped corrugated cardboard standee emblazoned with the main characters from Lord of the Rings: The Fellowship of the Ring.

Our adventure is fraught with pitfalls, from pricing discrepancies to shorted shipments. We continue our trek undaunted, for our short-term objective is in sight: copies of Lord of the Rings: The Fellowship of the Ring are set up and ready where that most skittish of creatures, the retail customer, can feast on them at midnight.

Now that we've coaxed the creature out, other travelers are stopping to gaze at our discovery as they pass. One or two ask when they can buy the video. A small herd of teenage boys show up, circle the display and debate whether they can get one if they pool their money. They wander off to persuade the manager to turn up the sound on the TVs in the electronics department so they can watch anyway.

As the clock drifts past midnight, a few consumers venture forth to take advantage of the opportunity. Some merely sniff tentatively at the display, others grab the disc nonchalantly. These first buyers seem to feed on the DVD and leave the tapes for the scavengers.

Our safari has ended for the evening. By dawn, Rings hunters will be combing the urban savannah in search of the displays just like this one. Some will apprehend their targets, others will be too late and have to wait for the next stocking expedition. But we can go home, secure in the knowledge that no Kmart shopper in La Habra need do without the latest hot release.


See PHOTOS of the video safari!


5 Aug, 2002

THE MORNING BUZZ: Two Rings to Rule Them All

The two versions of New Line Home Entertainment's The Lord of the Rings: The Fellowship of the Ring begin the journey to video today, with the theatrical version hitting first and the extended director's cut coming in November. New Line expects many Rings fans will buy both versions, and execs say they are confident of the reissue strategy.

Still, studios seem to be cognizant of the fact that they are treading on dangerous ground.

New Line has been careful to position the extended director's cut version -- which includes more than 30 minutes of extra footage including new music recorded specifically for the added scenes -- as a completely different experience. Indeed, a poll on the Home Theater Forum site showed fan support for purchasing both versions.

Buena Vista Home Entertainment's Pearl Harbor got similar treatment, with a theatrical version streeting Dec. 4 and a “Vista Series” version featuring a director's cut and more extra features Jan. 15. The studio added more historical and special effects extras and audio commentaries on the second version; the “Vista Series” is positioned as the “definitive version” of films and a “collaborative partnership” with the director. Some DVD fans were skeptical of two versions for a film that garnered some critical pans. But I, for one, have not yet seen the Vista version and would love to delve into the historical information on the second release.

Early in the DVD life cycle, studios released vanilla or non-anamorphic DVDs and then later rereleased the titles in beefed-up versions. Some studios have singled out certain titles for reissue treatment, notably Fox with its “Five Star” line and Columbia TriStar with its “Superbit,” enhanced picture and audio series.

Reissues have come under fire on DVD Web sites, and critic Richard Roeper, co-host of the TV show “Ebert & Roeper at the Movies,” has knocked the practice on the air. To try and ameliorate the issue, studios and retailers alike have considered and sometimes instituted rebates to consumers who buy the first version. Indeed, Wherehouse is considering such a program on Rings.

Ultimately, consumers will vote with their dollars. Fans may decide to purchase multiple versions of a film favorite even if they aren't happy about it. They'll most likely eschew future versions of films they never liked in the first place. But studios must tread carefully. We don't want consumers to resist their impulse to buy titles when they come out, for fear a better version is coming in the future.

I think New Line execs are smart to offer a significantly more elaborate reissue. And if I know Lord of the Rings fans, they'll snap up any version they can get.


5 Aug, 2002

THE MORNING BUZZ: Studios&#39; Planning Still Staying Ahead of Duplication Curve

As the fourth quarter looms ever larger on the horizon, with promise of an even greater sellthrough bonanza this holiday season (especially for DVD), the issue of DVD replication and packaging capacity rears its nasty little head, as usual.

And while this has been a typical seasonal concern ever since DVDs were introduced five years ago, as the product enters the mass market, the issue becomes more critical.

The stakes are getting higher and the studios are continuing to ramp up not only the volume on new release hits, but on catalog as well. The goal is to drive DVD hit product into an ever-widening sphere of retail outlets with sellthrough pricing; and that requires mass-market-sized replication orders.

Adding to this challenge and opportunity is a public that continues its DVD buying apace even as DVD acceptance broadens into Middle America.

As you can see from the data on page 10 this week, compiled by our regular contributing DVD expert Ralph Tribbey, the buy rate of DVD software per DVD console appears to be holding fairly constant, at about 17 discs per year, even as penetration of DVD into U.S. households continues to climb toward what many expect will be about 40 percent by year's end.

The crux of the issue now, and for the future, revolves around the studios' ability to continue to forecast as accurately as possible, even earlier in the cycle of DVD planning and creation, both the number of titles and the amount of content and, therefore, number of discs required for any one release. Because of this, development of DVD materials begins earlier and earlier (even while the film is being made) so studios can plan their replication needs and make sure that completed DVDs arrive at plants in time to avoid traffic jams.

According to Video Store Magazine senior reporter Enrique Rivero's report this week, studios seem to have anticipated their needs early enough for this year's fourth quarter and gotten content lined up for the DVDs in time to ensure that no bottlenecks in duplication seem to be on the horizon. New Line execs, for example, said they pushed forward planning with duplicators for The Lord of the Rings, streeting this week, by three months over their normal time frame to ensure no problems or delays occurred.

The next challenge will be to see how the industry can improve the DVD packaging process, many aspects of which still must be done manually -- which boggles the mind when you consider the hundreds of millions of DVDs produced each year. If there is any jamming in the pipeline for the coming fourth quarter, some industry executives say it could well be in the packaging process.


1 Aug, 2002

THE MORNING BUZZ: Sellthrough dealers stumble on shorter legs

The big sellers of DVD are experiencing a problem that hitherto affected primarily rental dealers: shorter legs on hit titles.

Any rental retailer will tell you the flood of hit product triggered by widespread studio-direct revenue-sharing killed the shelf life of videos. It used to be that demand for a new release lasted two or three months; now, the big chains are selling off previously viewed copies of new releases within two or three weeks of street date.

As consumer habits, fueled by infatuation with DVD, have shifted to buying – a record 1.1 billion sellthrough units were shipped into the market last year, an all-time record, analyst Tom Adams recently told me – the shelf life of hit product at the big sellthrough stores is also growing shorter. Every Tuesday, a flood of people comes in to buy the latest hot property; then demand quickly dies down until The Next Big Thing comes out the following Tuesday, and so on.

Now, you'd think for sellthrough dealers this wouldn't be a bad thing. After all, what dealer wouldn't want to turn most of his or her inventory immediately, rather than waiting a few weeks or even months? Bring it in, move it out and then on to the next big seller.

But wait. It's not that simple. In the old days, retailers frequently reordered product, something I'm told hardly ever happens these days. Because such a high percentage of sales occurs in the first few days, retailers have to be dead-on in their ordering unless they want to be stuck with a huge overage that doesn't sell after the first week.

Oh, sure, studios accept returns, but think of all the time and money spent in processing, packaging and shipping product back. And then there's the question of how much to send back. More and more DVD households are coming online every month, every week – shouldn't you keep some copies of the big hits around to take care of future demand? But how much is enough, and how much is too much? Will buy rates remain the same when DVD penetration hits 40 percent, which it is expected to do by the end of the year? What's more, when penetration hits 40 percent, expect studios to crank out a lot more catalog product they have been holding back until the DVD player base bulks up.

As a result, buyers for the big DVD retail sellers readily concede there's no real strategy, going forward, other than trial and error, wait and see, live and learn.

Some retailers who bought loads of DVDs of Harry Potter and the Sorcerer's Stone say they're already stuck with excess inventory, but Warner Home Video won't accept returns until the end of September, 120 days after street date. By that time, will demand for the title have been rekindled, with the holiday gift-buying season getting under way and a new Harry about to break theatrically? Or will the title get lost in the shuffle among all the high-profile new stuff coming out around that time, like Disney's Monsters, Inc.?

And rental dealers thought they had it hard!


30 Jul, 2002

THE MORNING BUZZ: The Robber Barons Are At It Again

Well, here it comes: the next bill designed to protect digital copyright holders from peer-to-peer (P2P) piracy.

A California legislator, Howard Berman (D), proposed a bill last week that would let media companies hack into our computers and drop cyberbombs on those they believe are stealing their digital materials.

Like every other recent “anti-piracy” proposal, this bill neglects a couple of key points. For one thing it singles out distributed networks – decentralized networks of computers that aggregate computing power to keep the whole enterprise humming – but does nothing to prevent file trading on instant messaging systems.

Is this an accident? Not likely. It's just another way of handing control of file sharing to the media conglomerates that claim it ruins them. I'm sure sagging AOL/Time Warner is hot to quell the P2P tide. With stocks worth less than a quarter of their pre-merger prices, it would be quite a coup for AOL to herd as many file traders as possible onto its network at $20 or more per month, thereby boosting the subscriptions it's losing at an alarming rate.

Even this could backfire, though, if there is anything to rumors that Microsoft will try to buy Yahoo! in November. Wouldn't it be funny if Hollywood tried to wrest P2P systems out of the techies' grip, only to get trumped after the congressional break?

This not only illustrates the futility of the war on file trading; it's not even good subterfuge for Hollywood's brazen power grabs.

It also doesn't address a problem I've noted before (and now Bill Gates is on board) – that fact that studio moguls continue to blame faceless digital pirates without policing their own ranks.

Gates and a number of his ilk – notably Microsoft CEO Steve Ballmer, Intel CEO Craig Barrett, Dell CEO Michael Dell and HP CEO Carly Fiorina – sent the studio heads a letter a couple of weeks ago criticizing Hollywood's finger-pointing.

“Any approach to the issue of peer-to-peer file sharing must address the core nature of this emerging technology,” they wrote. “Peer-to-peer technologies constitute a basic functionality of the computing environment today and one that is critical to further advances in productivity in our economy. Any solutions to the problem of piracy must not compromise the innovations this functionality has to offer and, more importantly, must first address the means by which unprotected content finds its way onto these systems in the first instance.”

The tech moguls suggest consumer education, enforcement of existing laws and, perhaps most importantly, that studios get off their fannies and bring their IP content delivery services up instead of whining that consumers are using whatever means available to get video online and on demand.

The studios don't want to deal with pesky Justice Department investigations of potential trade restraints, so they lean on legislators (political contributions are a big stick) to advance their causes in Congress.

But make no mistake: the Hollywood robber barons are no different from the railroad robber barons of California's past. This isn't merely about protecting their businesses and employees. Their goal is to scoop up all the rights of way (Internet protocols as train tracks) and hardware (train cars and media players) to control what moves where, when and at what price.

Anyone who thinks it's a good idea to let the robber barons run the railroad should take a good, hard look at California's public transportation. It's a pretty good indication we are on the wrong track – again.


29 Jul, 2002

THE MORNING BUZZ: Directors&#39; Commentaries Can Be Interesting in the Right Hands

Directors' commentaries have come under fire – often from directors themselves -- for their often rambling, pointless, self-serving nature. But this weekend I had a lazy afternoon to peruse Cameron Crowe's commentary for the Vanilla Sky disc and was reminded of the DVD feature's possibilities.

The Crowe commentary (with wife and music composer Nancy Wilson) is indeed casual (his kids come into the room during the recording and he calls cast members, including Tom Cruise, on the phone), but it manages to be interesting as well. It helps that Crowe is a writer, articulate and adept at analyzing his subject, and that the film itself is a puzzle (one of my colleagues, who shall remain nameless, confessed he didn't fully understand the ending).

Crowe walks viewers through the film, letting them in on clues that show what is real and what is not in his dreamlike movie – yet he doesn't spoil the viewer's own interpretation. And, no doubt in deference to viewers like my esteemed colleague, he explains the varied interpretations of the ending, settling on the one he intended, but not knocking other views. Contrary to the fears of many directors, Crowe's commentary doesn't demystify his subject. Like a college professor, he offers possible interpretations, not pat answers. I don't know if Crowe worked off notes or merely used stream of consciousness, but he kept this jaded movie viewer interested.

My hope is that directors hone their commentaries further, to make them truly valuable to future filmmakers and viewers. One wonders what a commentary by Alfred Hitchcock, Howard Hawks or Orson Welles would have added to their masterpieces. This particular DVD feature may not be for everyone -- many don't have the patience to sit through a film twice – but it will no doubt help directors polish their legacy for future generations.


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.