Stephanie Prange is the editor in chief of Home Media Magazine. The Yale University graduate joined what was then Video Store Magazine in 1993 and was instrumental in transitioning the publication into a tabloid newsweekly. She spearheaded the publication’s reviews section, as well as aggressive coverage of the home video sales market. She also helped launch the magazine’s Web site in 1996. In her position as editor-in-chief since 2006, she has spearheaded the launch of such projects as the daily blast, transmitted via email each day to readers, and Agent DVD, a consumer publication aimed at genre enthusiasts who attend Comic-Con International in San Diego. She has freelanced for The Hollywood Reporter, The Los Angeles Times and parenting publications. She has an M.A. in journalism from the University of Southern California.
If there is an equivalent of a crystal ball for home entertainment, it is the box office take of films in the pipeline. When theaters have more hits, typically studios and retailers sell and rent more home entertainment product.
At the annual CinemaCon trade show in Las Vegas, John Fithian, president and CEO of the National Association of Theatre Owners, offered an optimistic view for 2015. He predicted a record-breaking year for the industry in part based on the quality, genre breadth and expert timing of releases. He also gave a shout-out to the industry’s greater appeal to women moviegoers, citing such films as Fifty Shades of Grey, Cinderella and Insurgent. He said there would be several movies topping $1 billion in box office worldwide. The hits include Furious 7 (already raking in the dough) and the anticipated “Avengers” and “Jurassic Park” sequels as well as the “Minions” spinoff. Of course, the “Star Wars” sequel is a potential blockbuster of galactic proportions.
This is welcome news after a bit of a drought in box office power. As California has thirsted for more rain, so too have the studios suffered a drought in hits. Soon it will be the home entertainment industry’s turn to reap that expected record harvest. But this time there are many more digital competitors in the home entertainment realm that will take a bite out of the crop, putting more pressure on the traditional home entertainment business. If you have a team of all stars and still can’t bring in the trophy, pundits turn to the management to blame.
It is the home entertainment industry’s job to extract as much bounty from this wealth of hits as it can. The pressure is on. New releases have made up an ever-increasing segment of the top 50 sellers on the VideoScan charts. When the new releases are stellar, it makes sense that the home entertainment business will profit. Theaters are throwing the home entertainment industry a soft ball, and the industry needs to hit it out of the park.
A group of top recording artists, led by rapper Jay Z, wants to make streaming pay talent more. They’ve launched a new music streaming service — Tidal — designed to offer artists better pay for their work.
The service starts at $10 monthly and is designed to take on the likes of Spotify and Pandora by offering better-quality audio and better remuneration for artists. Such luminaries as Beyonce, Kanye West and Madonna were on hand for the announcement.
This isn’t the first time a big-name music star has called out cheap (or free) streaming services for underpaying artists. Singer Taylor Swift, fresh off the launch of her blockbuster album 1989, pulled her catalog from subscription streaming service Spotify, saying artists and their labels aren’t paid enough for the many times listeners stream their songs on the free version of the service.
“Valuable things should be paid for. It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is,” she wrote in a column in The Wall Street Journal.
It seems Tidal may be one step in that direction, as far as artists are concerned. Artist Alicia Keys, at the press conference in New York, said Tidal will “preserve the value of music,” according to the Los Angeles Times, and will offer exclusive content not found anywhere else. Sound familiar? Tidal has no free service; it’s $9.99 monthly for basic service, with standard streaming of music and high-definition music videos, and $19.99 monthly for CD-quality streaming, HD videos and access to original content.
But in the Internet realm, who really is in charge? Is it the content producers or the technology companies that deliver content? It’s a question that has not only plagued the music business, but also the entertainment business at large.
Will Tidal’s quality streaming, offering better compensation to talent, convince consumers to pay more (or, really, pay anything at all)? That’s an open question. I, for one, hope it will, and probably so do the many movie and TV show producers out there that find they don’t get enough of the bounty from the Internet revolution. But it’s not the top stars that are really in danger. It’s the upcoming talent that is taking the biggest long-term hit for low-cost streaming. I hope Tidal finds a way to include them, too.
It wasn’t so long ago that the top dog in the video rental business was Blockbuster Video. Blockbuster executives crafted the rental deals that the rest of the industry emulated or worked around. Now that mantle seems to have passed to Redbox, the kiosk company that was characterized as an upstart not so many years ago.
I remember a spokesperson for a major public video store chain telling me that the kiosk market was just a marginal business that would never overtake stores. He said, “How could they possibly replace video store clerks?” Another such spokesperson said online physical rental (Netflix) was a side business, never to rival the store experience. (Now, by the way, Netflix executives think disc rental is a side business, too.)
Those public video store rental chains are long gone — and still standing is Redbox. Following the stores’ demise, Redbox is the dominant outlet at which consumers rent a physical disc. Netflix has sidelined its physical disc rental business in favor of streaming and original programming for streaming, and independent or mid-level chain video rental stores are few and far between.
Pretty much every time I go to a grocery store in my neighborhood, I see a Redbox kiosk with a customer or two. For most consumers who want to rent a physical disc, Redbox is the easiest, cheapest and quickest way to view content, especially movies. Just before Blockbuster went bust in late 2013, Home Media Magazine editors fanned out to find the closest rental outlets and Redbox kiosks were by far the most convenient. I personally had to get on a freeway and travel a half hour to find the nearest Blockbuster or indie rental store. The writing was on the wall.
After the demise of many video stores, Redbox has become important to content owners as well. The studios look to Redbox to buy and rent all of their new releases (popular or not) under output deals. Independent content owners look to Redbox to pick up art house or genre titles that used to find a place in a larger video store rental market, but that the mass merchants increasingly won’t sell.
“Everybody is taking them to lunch,” one industry observer told me of Redbox. Until some other market (perhaps digital) eats their lunch, Redbox looks to be on a roll.
Are gathering clouds raining on studios’ digital sales?
It seems Warner CEO Kevin Tsujihara thinks that might be the case. Different studio-backed cloud-based content ownership services are confusing consumers and slowing digital growth, he said.
Since the introduction of UltraViolet, supported by most major studios, Disney has been a holdout, preferring to support its own subsequently introduced cloud-based service, Disney Movies Anywhere, rather than join the UV accumulation. Various industry observers have debated the merits of Disney’s different path, but many came to the conclusion that both clouds could coexist nicely without damaging digital growth on the horizon.
Tsujihara appears to disagree.
“It would be my goal to bridge [UltraViolet] with what Disney is doing, so the consumer doesn’t have to guess is that a Disney movie, or is that a Fox, Sony, Paramount, Universal or Warner Bros. movie?” Tsujihara said March 4 at the Morgan Stanley Technology, Media & Telecom confab in San Francisco. He noted that while digital sales of movies increased 50% in 2013, growth slowed to 30% in 2014 and is about the same so far this year, which will not be strong enough to offset declining disc sales.
While two cloud services can coexist — indeed they do — it seems to me that they need to be connected through consistent marketing and operational logistics, making access to both seamless to the consumer. Consumers want simple services, and they really don’t care (or often even recall) which studio owned the content they want to acquire. Format options can stimulate, rather than kill, a market. But sometimes, as with the many TV versions of 3D, they scramble the message so much that consumers begin to boycott the market altogether.
“We have to focus on what the consumer is looking for: Simplicity. The magical thing about DVD was it was simple, easy and worked everywhere. I think we have to replicate that in EST,” Tsujihara said.
Making that sort of simplicity work for non-physical ownership is one of the key challenges facing studios, no matter which cloud they follow.
Digital ownership took a hit recently with news that Target had abandoned its Target Ticket service, a key supporter of UltraViolet, the cloud-based digital content storage platform supported by most of the major studios. But Target’s digital surrender may be less of a defeat for digital ownership, than it is a case of the tortoise losing to the hare.
A key reason why another retailer, Walmart, has been able to bridge the digital gap is its quick decision to embrace digital technology and ownership with its Vudu service and its adoption of the UltraViolet platform as well as Disney’s cloud-based service, Disney Movies Anywhere. In the digital arena, often companies that move more quickly win the race. Unfortunately, Target’s caution may have cost it, making it an also-ran.
That’s why Walmart’s Louis Greth and Chris Nagelson are so worthy of our Visionary Award this year. Walmart’s decisive move (before competitor Target) to embrace UltraViolet digital cloud ownership as a complement to its robust physical disc business put it at the forefront of innovation in the retail arena. Walmart was key to supporting the UltraViolet service, and working with its studio partners, has helped consumers get what they really want from entertainment ownership — the ability to possess a physical copy with the highest possible quality and numerous extras, as well as the option of viewing content they already own on their digital devices, from tablets to PCs to cell phones. Walmart this January accepted a Software Retailer of the Year award from DEG: The Digital Entertainment Group, and Greth put it best in accepting the award for the retailer: “Our customers love your product.” Giving customers what they want is the top calling of retailers, and Walmart has never lost sight of that, whether it be physical product or digital.
As the competition heats up in the retail space, Walmart is facing the future and embracing it. Target, still an important physical disc retailer, seems to have ceded control of the digital territory, finding that it was too far behind in the digital race.
It’s hard to see now how this marathon will ultimately end. Digital ownership certainly faces challenges, as Warner Bros. CEO Kevin Tsujihara reportedly told a tech group Feb. 18 at Re/code’s Code Media confab in Dana Point, Calif. But in this tale of two retailers, one competitor is out of the race.
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.
“It’s the Wild West,” a top digital executive told me during the Consumer Electronics Show as we discussed what was happening both domestically and abroad with content distribution. Recently, the digital shootout with traditional Hollywood has resulted in more broken windows and online series lassoing some of the industry’s top awards.
Amazon has followed Netflix into the theatrical realm through its Amazon Original Movies, planning to produce and acquire original films for theatrical release (and release on Amazon Prime Instant Video subscription video-on-demand four to eight weeks later). Netflix made its own deal with The Weinstein Co. to debut the Crouching Tiger, Hidden Dragon follow-up simultaneously in theaters and via streaming. Amazon has inked a deal with legendary filmmaker Woody Allen, Netflix with Adam Sandler. Both Sandler and Allen previously had been theatrical heavyweights.
Sony’s The Interview, plagued by controversy after terrorists threatened harm, hit the VOD market early, stepping on the theatrical window, and will be released on Netflix before its traditional window on disc.
Meanwhile, among the Golden Globe nominees and winners were several from Netflix and Amazon original series. Amazon Prime's critically lauded "Transparent," a comedy starring Jeffrey Tambor as a family's transgendered patriarch, won two major awards — Best TV Comedy or Musical Series and Best Actor for Tambor —a first for Amazon. Netflix’s “House of Cards” earned a Best Actor in a TV Drama trophy for Kevin Spacey.
Exercise programming started with home video — Jane Austen in fact got her start in exercise videos with our magazine’s founder Stuart Karl — but is now moving further into SVOD. Comcast Cable and Gaiam have unveiled Gaiam TV Fit & Yoga, a subscription-based video-on-demand service enabling Xfinity TV subscribers access to yoga and fitness training. Lionsgate is planning its own fitness SVOD service under the BeFit brand, which has more than 1.3 million subscribers to its ad-supported YouTube channel.
If this were a poker game to dominate Hollywood in an Old West saloon, there would be a lot of deck shuffling. And, to really push this Western metaphor, the real question is: “Is there gold in them thar hills?” Will digital models ever be able to rival the kind of money that Hollywood has earned with the traditional window system? Or will the digital players get a bigger part of a shrinking pot? So far, indications are fuzzy.
The release of The Interview — which is an unprecedented case — has earned plaudits for its revenue on VOD, but I’m fairly sure the traditional release schedule would have generated more profit. We will never know, but those who say this Hollywood Western is in the final showdown are wrong. I think we have only seen the first few scenes.
One overwhelming trend at the Consumer Electronics Show in Las Vegas, at least for the home entertainment industry, was the shift to 4K, a resolution standard that promises roughly four times what HD can offer.
And yet, just a few years ago, the number three — as in 3D —was everywhere on the show floor. This year 3D was hard to find in the TV-heavy Central Hall of the Las Vegas Convention Center, while 4K (or its other moniker, Ultra-HD) was plastered on all the big booths, from LG to Sony.
In a very interesting panel put on by our colleagues at FierceCable, and moderated by its editor, Daniel Frankel, representatives from Comcast Cable, Samsung Electronics Smart TV Services, Qualcomm, MLB Advanced Media and Arris pondered the shift to 4K. Notably, they addressed the squelched 3D push, as well as format ghosts, such as (from the not so distant past) HD DVD. They said 4K stood a better chance of adoption, if only because the hardware will be everywhere at a consumer-friendly price. Pretty soon, every new TV will be 4K whether consumers desire it or not. And then, they said, the content will come, pushed by OTT (over the top) services such as Netflix.
The transition is inevitable, but is it truly a step forward? Can the human eye really see the difference of the higher resolution, especially on small screens such as cell phones? Panelists noted that the difference in visual quality isn’t just the higher resolution, but the more vivid color and sound quality. Also, 4K allows for a more complex graphics presentation. One panelist noted that, as with HD versus standard-definition, "It's one of those things that once you see it, you can never go back."
That may well be, but I reminisced on the show floor by trying to find good old 3D, especially without those pesky glasses, which I think proved to be the format’s downfall. And — low and behold — I finally saw a presentation, from Stream TV Networks that presented glasses-free 3D that didn’t make me sick and looked pretty good from different angles. They can even upconvert classics such as It’s a Wonderful Life. It’s just too bad that 3D technology, which finally seems to be overcoming those glasses, is a day late and a digit short.
The damaging cyber attack against Sony Pictures, which most speculate North Korean hackers launched as punishment for production of the film The Interview, may have put the comedy in the can permanently. Originally scheduled for theatrical release Christmas day, The Interview, about reporters attempting to assassinate North Korean leader Kim Jong-un, may never officially see the light of day, even on home video. Sony pulled the theatrical launch after threats to movie theaters, and the home video release is up in the air.
While the situation is unprecedented, it will not be the first big studio title to never get an official release in the U.S. home entertainment market. Home entertainment fans have long clamored to see Disney’s Song of the South, based on the Uncle Remus stories and featuring the Academy Award-winning song “Zip-a-Dee-Doo-Dah,” but it has never been released officially on home video in its entirety in the United States. The 1946 musical’s subject matter, which has not aged well in these enlightened times and which many find racist, has kept that film off cassette and disc (at least officially). Certain other countries and pirates have released the title, but U.S. fans may only see it in snippets on other home entertainment releases, such as the Brer Rabbit animated segments, which are the basis for Disneyland’s Splash Mountain attraction.
Other content with touchy subject matter, racist or otherwise, from the early days of film and cartoons is also stuck in the vault and has not been released on home video.
While The Interview is quite different from Song of the South, controversy haunts both. A terrible controversy such as the one facing Sony seems to be a very damaging wound that could kill a film’s video release. Studios are backers of the First Amendment — to a point. Studios are corporations, with responsibilities to stockholders, business partners and their own employees, whose private emails and other information have leaked for everyone to see. The legal heat may prove too searing for a studio that could be blamed for basically any attack associated with the film, cyber or otherwise.
Still, that doesn’t mean viewers will never see The Interview. Like Song of the South, The Interview will likely be bootlegged. Already, pirated scenes are leaking out on the Web, and, likely, hackers will beat Sony’s attackers at their own game and disseminate a copy online. But, officially, a home entertainment release may have hit a permanent roadblock, meaning Sony will take another hit and so will free speech.
Dec. 3 I attended a wonderful and informative holiday event sponsored by the Canon Club, held by DEG: the Digital Entertainment Group and hosted by Deloitte at The Peninsula Beverly Hills.
The DEG created the forum, "Canon Club: Where Women in Home Entertainment Meet," for women in home entertainment to come together to learn, share and engage, and the holiday event certainly delivered on that promise.
The event’s featured speaker, Madeline Di Nonno, CEO of the Geena Davis Institute on Gender in Media, offered some compelling statistics on the state of female representation in the media, both domestically and internationally (seejane.org/symposiums-on-gender-in-media/gender-bias-without-borders/).
Di Nonno told the assembly progress has been very slow. As the study says of the United States, “Research reveals that the percentage of female speaking characters in top-grossing movies has not meaningfully changed in roughly a half of a century.”
The focus on women in media seems to be on their physical attributes.
“Female characters just can’t escape an emphasis on appearance,” she said, adding that females 13-39 are “equally sexualized.”
Still, some progress has been made. The Institute has been able to get more female characters included, if only in the background on various animated films. But it’s hard to get Hollywood to change the mindset that men won’t go to female-driven films, while women will go to male-centered films. With regard to that, I think Di Nonno made a great point, saying that if female characters are written compellingly, both men and women will flock to content. Case in point: Disney’s Frozen.
“Boys loved Frozen,” she said.
And girls loved it, too, for its strong female characters. “I want the sparkle, but I want the Jedi thing,” Di Nonno said of the Institute’s research on the attitude of today’s young girls.
Perhaps it’s not so much that consumers don’t flock to see female-oriented films as it is that they want to see well-written female characters, characters as well-written as the male ones. And that will probably require more female involvement in the writing, producing and directing of content.
I commend Di Nonno and the Geena Davis Institute for tackling this problem, and I think the Institute’s research and outreach is important to Hollywood as it looks to attract consumers with stories that are new and effectively target more than half the population. I think progress will be both rewarding for women and profitable for the industry.