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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.

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6 Sep, 2000

TK's Morning Buzz: How Far Can DVD Producers Stretch the Special Features Envelope?

Since DVD was officially launched in March 1997, special features have gone from a nice extra to a driving force.

Early advocates of adding commentaries, deleted footage, and other DVD exclusives, like New Line Home Video's Stephen Einhorn, are not only vindicated, but are being hailed for their vision and foresight. And consumers who still remember the days when the only special features on most discs consisted of subtitles, language tracks and the original theatrical trailer are now feeling short-changed if their discs don't include detailed cast bios, made-for-DVD music videos and at least one commentary track and "making of" featurette.

Looking at extras-packed discs like Artisan Home Entertainment's Terminator 2: Judgment Day, which includes more minutes of added goodies than the original film, makes you wonder where it's all going to end up. How far can DVD producers stretch the special features envelope? How high is the bar ultimately going to be raised, and in which direction will it lean?

I have to admit, when I first began getting DVDs, the movie came first. If I had time, I'd watch a few deleted scenes. Now, the extras are required viewing--and not just for me, but for other members of my family.

The other night, I watched Universal's excellent Creature from the Black Lagoon with my 4-year-old. Knowing it was a DVD, as soon as the closing credits came on the screen, he turned to me and asked, "Is that all?" I clicked onto "Back to the Black Lagoon," a historical look at the film that includes interviews with surviving cast members and mock-ups of alternative Creature costumes, and we both sat mesmerized for another 20 minutes or so.

Special features are changing our home entertainment viewing habits. We're no longer content with watching the movie--we want more. The only question, at this point, is how much more--and of what type?

I already see a trend developing--more and more, special features are taking the ROM route. Consumers watch all the extras on their disc on their TVs, and then stick it into their computer for more fun.

Columbia TriStar Home Video's innovative Men in Black disc is a harbinger of things to come--special features are going interactive, and involve the Web.

When Sony and Microsoft come out with their respective DVD-playing game machines, the PlayStation2 and the X-Box, I expect this trend to accelerate.

There will soon come a day when watching a movie is an all-day (or all-night) pursuit.

Comments? Contact TK directly at: TKArnold@aol.com

5 Sep, 2000

TK's MORNING BUZZ: Hollywood's Summer Bummer Shouldn't Chill the Thrill of Cool DVDs

The Labor Day weekend is barely over and the first press reports of what a down summer this has been at the box office are already trickling in.

As early as Saturday, two days before the official End of Summer, the Associated Press was already reporting that "Hollywood's summer fell well short of the record $3 billion that movies raked in a year ago.... There were solid successes and one unexpected blockbuster, Scary Movie, but nothing on the order of last year's string of hits and the surprise horror sensations The Sixth Sense and The Blair Witch Project."

For video retailers, such a story two or three years ago would have made them cringe and prepare for a long, hard winter. In the old days, a slow period of the box office would mean a slow period in video stores, five or six months down the line.

I remember in early 1997, when video rental was down about 5% from the previous year, Blockbuster was tanking and Forbes magazine ran a story on how the end was near for video stores. Warner Home Video put together a road show, explaining away the malaise to a weak slate of theatrical films; practically every video retailer I knew was crossing his fingers and hoping that Hollywood would get back in gear so he and his video-dealing peers could eat again.

But, as they say, that was then and this is now. And the fact that Hollywood had a bummer of a summer shouldn't send a chill up too many video retailers' spines. For one thing, the video business is in enough trouble, so what's one more blow? But, more significantly, I'm betting that DVD will be the critical factor this fourth quarter, and retailers on both the rental and the sales end of the business should stock up on the little discs and focus their marketing and merchandising efforts not on the hits, but on all things DVD.

It's not going to be a title-specific Christmas; if it's out on DVD, it will sell.

I bought a DVD player for my dad over the weekend. I went to the Best Buy near my house and the selection was dismal. I spoke with a manager and he said they'd get more players, if only they could. Player sales to consumers are already far surpassing even the most optimistic estimates, and the fourth quarter hasn't even begun.

I predict that once the fourth quarter selling season officially begins, we're going to witness something akin to the early days of VHS. Consumers are going to want to buy anything and everything on DVD; even though we're well past the early adopter phase and we're actually seeing players sell for as little as $96 (one of Best Buy's weekend specials), Best Buy executives tell me they're still selling an average of 16 discs for every player.

My only hope is that video software dealers will be there with a full array of discs, properly merchandised and promoted, instead of tightening their purse strings because Hollywood had a bad summer.

The old rules simply don't apply anymore.

Comments? Contact TK directly at: TKArnold@aol.com

1 Sep, 2000

TK's MORNING BUZZ: Warner's Crackdown on Sideways Selling May Come Back to Haunt Them

Today is the first day of Warner Home Video's controversial new Rental Direct program, and from what we hear, things went off without a hitch.

Retailers--at least, those who sent in their credit applications in a timely fashion--got their product in plenty of time for today's unusual Friday street date.

Warner also appears to be making good on its threat to crack down on sideways selling. That's their perogative--on the surface, it defeats the purpose behind copy depth--but if they continue to take a hard line against offenders, my guess is it that it may come back to haunt them.

Sideways selling, of course, is the practice in which one retailer meets goal and makes his buy, keeps only what he feels he needs, and then turns around and sells off the surplus goods to other retailers.

This helps retailers effectively lower their cost of goods even more than under the most generous studio-sanctioned copy-depth program. But it also cuts into studio revenues.

Nearly three years into the copy-depth area, sideways selling is running rampant. At last April's National Association of Video Distributors (NAVD) meeting in Indian Wells, Calif., distributors estimated as many as 80% of their retail clients engage in some form of sideways selling.

It's always been a thorn in the studios' sides, but there's never been an effective way to police it. But with Warner now in the driver's seat, selling its rental titles directly to retailers, the studio is in a far better position to closely monitor sales and punish retailers who aren't playing by the rules.

This could be a double-edged sword. For Warner's Rental Direct to succeed, the studio needs to sell as much product as it can to as many retailers as it can find. Many retailers insist that if it wasn't for sideways selling, they couldn't survive. Once word gets out about Warner's crackdown, some retailers might simply stop buying Warner product, partly because they can't afford to and partly to send a message to the other studios to please continue looking the other way.

Should that happen, Warner will have to do some serious number-crunching and figure out if it's costing the studio more, in lost sales, than it would if sideways selling were allowed to proceed.

In the end, it might just come down to profits versus principle.

What do you think? Will Warner's hard line against sideways selling come back to haunt them in the pocket book? Click on FORUMS and give us your opinion.

31 Aug, 2000

TK'S MORNING BUZZ: Are You Worried About the Class-Action Suit Against Blockbuster for Late Fees? You Should Be...

If I were a video retailer, I'd be mighty worried about the class-action lawsuit against Blockbuster Inc. for allegedly charging excessive late fees.

Sure, Blockbuster might be generating a little more revenue than the average retailer (16.7% as opposed to about 10%) due to its longer rental periods and higher rental/late fee rates.

But the underlying premise of the suit--that in the copy-depth era, retailers have so many copies of new releases in stock that they're highly unlikely to run out, thus minimizing the risk of taking a financial hit from a lost rental--applies to just about everyone.

Back in the old days, when retailers paid $60 or $70 for each new release, they were a lot more conservative in their buying habits, bringing in just enough copies to satisfy the minimum expected demand. Thus, if a customer didn't bring a tape back on time, there was a very real possibility that the retailer would lose business.

But now, even red-hot new releases are purchased in such high quantities--and not just by the big chains, with their direct revenue-sharing deals, but by most everyone who wants to remain competitive--that at least a few copies are bound to sit on the shelf. Just look at our turns-per-copy chart--dem videos just ain't flying out the door the way they used to!

Accordingly, Blockbuster's legal team would be foolish to make financial risk the focal point of their defense. A much better strategy would be to redefine "late fees" as "extended rental fees," much like hoteliers will charge you for an extra night if you check out past the deadline and car rental agencies will charge you for an extra day if you don't bring your rent-a-car back on time.

On the surface, the suit appears frivolous. And yet I don't think it would have been filed if the whole copy-depth phenomenon hadn't happened. I tried calling the plaintiff's attorney yesterday, but he was "unavailable." I bet he knows a lot more about the business than his client does.

Comments? Contact TK directly at TKArnold@aol.com

For the latest industry news and views, read the Sept. 3-9 issue of Video Store Magazine.