The Dog Days of February

Walmart's '101 Dalmatians' with bonus disc

Walmart offered a gift set of the Feb. 10 Blu-ray of Disney’s 101 Dalmatians: Diamond Edition with a bonus DVD of animated content called Kanine Krunchies: Dog Show.

While the regular Walmart price for 101 Dalmatians is $22.96 for the Blu-ray and $2 more for the gift pack at $24.96, the first week both were offered for $18.96, meaning the bonus DVD was essentially free with purchase.

Best Buy set its focus on preorders, offering 100 My Best Buy points for preorders of select titles, with exclusives such as a steelbook for Lionsgate’s The Hunger Games: Mockingjay — Part 1 and Warner’s The Hobbit: The Battle of the Five Armies, and a lenticular cover for Disney’s Big Hero 6.

For Game of Thrones: Season Four, Best Buy will offer five exclusive covers, including an online exclusive. Details are at .
Target touted a $5 coupon off the purcase of music, books or movies totally $25 or more.

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SVOD's Slippery Slope

The Interview

On Feb. 17 Sony Pictures Home Entertainment will release infamous ‘R’-rated political comedy The Interview on DVD and Blu-ray Disc.

If anybody still cares.

On street date, it will have been 56 days since the movie launched online and in select indie theaters — despite terrorist threats against the movie’s distribution in any form. The film from Seth Rogen co-stars James Franco as a bumbling TV journalist whose interview with North Korean leader Kim Jong-un is co-opted by the CIA into an assassination attempt.

If the Christmas Day capitulation of the nation’s largest theater chains to a murky group of cyber hackers allegedly operating on behalf of the North Korean government wasn’t bad enough, Sony Pictures — victim to the hackers’ IT attack — succumbed to an even bigger foe: SVOD.

That’s because Sony Pictures inexplicably made The Interview available to Netflix on Jan. 24 — about three-and-a-half weeks before the packaged media release!

Sony Pictures undermined much of its ability to generate incremental revenue from The Interview through packaged media, opting instead to enable Netflix’s 39 million domestic and 3 million U.K. subscribers to binge-view the movie for free.

While Sony Pictures likely extracted a large license fee from Netflix, the deal set a dangerous precedent putting subscription streaming ahead of packaged media in the distribution food chain. Sales of DVD and Blu-ray Disc titles may be slowing, but consumers still spent 80 cents of every home entertainment dollar on physical product in 2014, according to DEG: The Digital Entertainment Group.

Subscription streaming may be buzz worthy, but it endangers all home entertainment channels — notably retail and rental — if not regulated.

“Every move Sony made [with The Interview] was wrong ... it was all reactive,” said Ralph Tribbey, editor of industry tip sheet The DVD & Blu-ray Release Report.

He said studios — not just Sony Pictures — need to re-think their business models and approach toward SVOD. Unless they are willing to bypass a theatrical run, studios need to return to recognize that the theatrical window promotes higher-margin retail, followed by broadcast and streaming.

Netflix, which is seeking $1.5 billion in new debt-funding to underwrite content acquisitions, is pursuing content exclusivity by paying premium license fees. Indeed, it ended 2014 with $9.5 billion in content obligations.

Tribbey argues that studios must resist the temptation of exorbitant license fees by retaining the traditional distribution food chain (theatrical, retail, rental, streaming) — with SVOD at the end of the line.

Putting The Interview on SVOD ahead of packaged media exacerbates the mindset physical media sales are declining and digital distribution is the answer.

“It’s a self-fulfilling prophecy,” Tribbey said.

 

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Music Licensing — Getting It Right

Music licensing for movie and television programs can be complex, and it is vital to get it right to ensure proper monetization and to avoid copyright liability issues.

Music is an asset. It is important to recognize it can provide significant revenue opportunities to whoever holds the rights to it. In fact, the global music publishing industry generates more than $10 billion in revenue annually. Visual media companies have an opportunity to capture some of this value.

If you own the copyright to music in an audio-visual work you can derive income from:
• “Public performance royalties” when
  o the music composition is performed on broadcast television, cable television, or the Internet;
  o the sound recording is performed by way of digital audio transmissions in the United States and through any medium in most countries abroad;
• “Mechanical reproduction” royalties when the music is reproduced in phonorecords such as a soundtrack album
• In “synchronization” licenses when the music is licensed by other audio/visual producers for subsequent productions.
• Borrowing against future music revenue as gap financing for production; and
• Selling your music library, as many have done.

So if you commission music for a video production, you should contemplate doing it as a “work for hire,” meaning the composer is a contractor and you retain the rights to whatever musical work he or she creates. That way, you will collect the royalties (and because the copyright in a work for hire lasts for 95 years from first publication or 120 years from creation — whichever is shorter — your heirs may continue to collect royalties well into the future).

Of course, many productions will use already existing music — in which case, you should assume that the work is copyrighted and you will need a license. Because music copyrights usually consist of two separate copyrights — the copyright for the music composition and the copyright for the sound recording in which the composition is fixed — one must determine who holds each.

Once you have identified the copyright holders, you have to negotiate a license. As an audio-visual licensee, you need to acquire a synchronization license from both the holders of the copyrights of the sound recording (the “record label”) and the composition (the “publisher”). This license will provide the right to make a derivative work (the audio-visual program with music synchronized and mixed in) and to reproduce, distribute, publicly perform and display the derivative work with the sound recording and/or music composition embedded.

One way to avoid the pitfalls of music licensing is to use music that is in the public domain, meaning not subject to copyright. These include very old compositions and recordings (and works from before 1964 that did not have their copyrights renewed) and royalty-free stock sound recordings. There is also the “fair use” exception to copyright, but that is an area fraught with litigation.

Because copyright infringement is essentially strict liability — it doesn’t matter whether you intended to do it or just made a mistake — getting all of this right is essential. (And, as a practical matter, it is advisable to purchase errors and omissions insurance for your production that includes coverage for copyright lawsuits due to the music infringing someone's rights.)

To provide some clarity in this area, the Entertainment Merchants Association (EMA) recently released a white paper on music licensing for audio-visual works to provide an overview of the applicable laws, practices and issues involved in successfully sourcing and licensing music for synchronization with audio-visual programming. The white paper is available at http://www.entmerch.org/digitalema/ema-music-rights-white.pdf.

Jason Peterson is CEO of ContentBridge, a leading supplier of digital supply chain services and technology to the media industry, and is a member of the Entertainment Merchants Association’s Digital Steering Committee.

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Oh, All the OTT!

The media business is abuzz with talk of OTT (over-the-top distribution via the Web). Not since DVD has a three-letter distribution format garnered so much attention in the industry.

Chase Carey at Fox said his studio is going to be careful to control it, making sure to preserve the profitability of the legacy business while cultivating a marketplace with many players ¬— and customers to which the studio can sell its valuable content. Bob Iger at Disney said the “Star Wars” and Marvel properties might make marvelous online channels, and that the Disney brand itself is also perfect for OTT.

The major studios aren’t the only players in the OTT game. Dish Network’s Sling TV, fresh off the announce of its launch at the Consumer Electronics Show, added Univision content to its lineup, which also includes ESPN. Shout Factory announced the launch of its catalog of cult TV and movies OTT with an ad-supported service.

And then of course there are OTT heavyweights Netflix and Amazon Prime, which are both basking in the glow of awards season, with their original content earning numerous plaudits.

The growing marketplace is reminiscent of the early days of cable, when the TV channel choices suddenly multiplied from the original three broadcast networks. But this is channel multiplication on steroids, with almost limitless possibilities. Finding the consumer in the cacophony of competitors will grow ever more difficult. Conversely, with an almost limitless amount of content at their fingertips, consumers may not be able to find or discover exactly what they really want to watch, distracted instead by what they stumble upon.

How will a revolutionary indie film be discovered or produced? What profit stream will finance high-quality product?

I applaud services Netflix and Amazon Prime for getting into the content game rather than just distributing others’ content. Granted, both services see it as necessary for self-preservation on the Web, where the barriers to competition are low. But the services also are committed to quality, which is laudable when much of the “content” on the Internet is amateur-produced distraction — makeup tips, gags and gimmicks. Like fast food supersizing, more isn’t always better in the content realm either.

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New on Disc: 'The Palm Beach Story' and more …

The Palm Beach Story

Criterion, Comedy, $29.95 DVD, $39.95 Blu-ray, NR.
Stars Claudette Colbert, Joel McCrea, Rudy Vallee, Mary Astor.
1942. An uncommonly knockabout farce even by Preston Sturges standards — yet also visually lush enough for its lead actress to be expertly sporting duds by Irene — The Palm Beach Story was released smack in the middle of the writer-director’s prime years.
Extras: Also included are background featurettes with writer and historian James Harvey and “Saturday Night Live’s” Bill Hader; a luminous 4K restoration; a Sturges-written wartime short; and an essay by the Village Voice’s Stephanie Zacharek.
Read the Full Review

Woman They Almost Lynched

Olive, Western, $24.95 DVD, $29.95 Blu-ray, NR.
Stars John Lund, Brian Donlevy, Audrey Totter, Joan Leslie.
1953. I’ve never quite gotten over the sight of Audrey Totter in leather pants causing a lot of mayhem for saloon owner Joan Leslie in what is only the second-weirdest feminist Western (after Johnny Guitar) that Republic Pictures managed to release in a two-year period.
Read the Full Review
 

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Building From Past Profits

Talk about the end of an era. I woke up this morning with a press release in my inbox telling me Rentrak has sold its Pay-Per-Transaction business to Vobile, a “worldwide leader in video and audio content protection, measurement and monetization services,” for $7 million.

Remember PPT, folks? That was the founding premise behind Rentrak back in the mid-1980s when a video retailer named Ron Berger founded the outfit, now a major media measurement and research company.

At the time, Berger ran a video chain called National Video, a major player facing stiff competition from Blockbuster and its policy of stocking up big on the hits. Berger devised Rentrak as a way for smaller retailers to even the score: they could lease titles rather than buy them outright and thus go a lot deeper on the major new releases than they otherwise could afford to.

Rentrak’s formula later was the model for studio “copy-depth” programs, which allowed retailers to buy more copies of hot new titles on the cheap in return for sharing a percentage of their rental revenues with the studios.

Revenue-sharing, as it’s now known, remained the studios’ preferred way of dealing with rental retailers through the DVD era right up to the rise of Redbox and Netflix.

Rentrak, meanwhile, used the profits from PPT to build its movie and TV measurement businesses, which have ensured the firm’s viability.

Using profits from the old to build the new is a smart business strategy, and one that’s kept industry – all industry – alive over the years. When IBM was faced with an onslaught of PC clones, the company’s fortunes suffered – remember that $8 billion loss in 1993? – until the firm wisely shifted course and began focusing on IT services and enterprise server solutions. Western Union survived email and texting by shifting from telegrams to money transfer services.

Here in Hollywood, we have a slightly different cycle. The core product – movies and TV shows – has long been the same. But the funding mechanism continues to change. First, it was theaters; then, syndication and TV rights. Home video became a potent funding force only after sellthrough triumphed over rental. And now the very same streaming services that threaten the viability of packaged media sellthrough are becoming a key movie and TV show funding source, thanks to the huge bucks Netflix and Amazon are willing to pay for original content as they aggressively expand beyond the United States.

Ah, the cycle of business. As one writer, for the website, recently wrote, “A successful company is like a great white shark. In its prime, it chews up the competition, but if it dares to sit still for too long, it dies.”

Rentrak is a great example of this. As for the studios, it’s still too early to tell.

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The 'Best' of 'Untold' Exclusives

Fox’s home video release of the latest romantic drama based on a Nicholas Sparks novel, The Best of Me, inspired a few retail exclusives.

Target offered the Blu-ray of The Best of Me with a bonus disc containing a half-hour of additional behind-the-scenes featurettes, while Walmart paired the DVD in a two-pack with another Sparks movie, Safe Haven.

The only other notable exclusive on a Feb. 3 new release was Walmart’s steelbook Blu-ray edition of Dracula Untold.

Among other promotions, Best Buy offered a limited-edition minion hat for $1.99 with the purchase of a select title for $9.99 each.

In addition, Best Buy offered a $10 gift card with the purchase of two select TV seasons, and triple My Best Buy membership points on any movie purchase.

Walmart offered a $12.96 DVD (with Vudu digital copy) movie called A Little Game, starring F. Murray Abraham, Ralph Macchio, Janeane Garofalo and Olympia Dukakis.

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New on Disc: 'Breaking Away' and more …

Breaking Away (Blu-ray)

Available via ScreenArchives.com
Twilight Time, Drama, $29.95 Blu-ray, ‘PG.’
Stars Dennis Christopher, Dennis Quaid, Barbara Barrie, Paul Dooley.
1979. There are enough loopy moments in this minor pleasantry about competitive bicycling to argue against anyone calling these affable hundred minutes conventional.
Read the Full Review

Method to the Madness of Jerry Lewis

Anchor Bay, Documentary, $19.98 DVD, NR.
Featuring Jerry Lewis, Jerry Seinfeld, Steven Spielberg, Carol Burnett.
2011. This Encore presentation isn’t a warts-and-all documentary, but it’s still OK because a love song to Jerry Lewis (especially one that plumbs his unsurpassed archives) was years overdue, and this one got me misty more than a few times (not to mention how some of the clips made me laugh out loud). This film tribute has been around on DVD for a couple of years but has been given a big push recently at Costco.
Read the Full Review
 

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'Fury' Over Retail 'Throne'

Best Buy's 'Justice League: Throne of Atlantis' with Aquaman figurine

The two big titles Jan. 27 in terms of retail exclusives were Sony Pictures’ World War II drama Fury and Warner’s animated superhero adventure Justice League: Throne of Atlantis.

For Fury, Best Buy offered several exclusive extras, including additional behind-the-scenes documentaries. Target offered Fury with steelbook packaging, while Walmart offered a two-pack of Fury with Company of Heroes.

Best Buy offered a Blu-ray edition of Throne of Atlantis with a pack-on Aquaman figurine. Target offered the film with a steelbook case, while Walmart had an exclusive early window on a Throne of Atlantis two-DVD special edition.

For PBS’s Downton Abbey: Season 5, Target offered the disc with an exclusive “Music of Downton” CD.

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New on Disc: 'Inherit the Wind' and more …

Inherit the Wind (Blu-ray)

Available via ScreenArchives.com
Twilight Time, Drama, $29.95 Blu-ray, NR.
Stars Spencer Tracy, Fredric March, Gene Kelly, Florence Eldredge, Dick York.
1960. This in some way fabricated take on 1925’s Scopes Trial in Dayton, Tenn., has rarely been more topical.
Extras: To sell the film, director Stanley Kramer filmed a coming attraction, included on this Twilight Time release, where he pretended to be one of those boxing ring announcers who launch the contest and later bellow out the final decision.
Read the Full Review

The Black Scorpion

Available via Warner Archive
Warner, Horror, $17.99 DVD, NR.
Stars Richard Denning, Mara Corday, Carlos Rivas.
1957. The effects, which are why anyone will be watching, are hit and miss in this cheapie about volcanoes unleashing hitherto trapped scorpions into the Mexican countryside.
Read the Full Review
 

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