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Future of Film Panelists Mark Black Friday Successes

8 Dec, 2009 By: Chris Tribbey

SANTA MONICA, Calif. — Mark Horak, president of Warner Home Video Americas, has a message for those who keep talking about home entertainment as if it’s dead.

“The demise of the home entertainment business has been vastly overstated and over-reported,” he said, speaking at the Future of Film Summit Dec. 8. “I think they’re just looking for a story.”

Studio representatives acknowledged that DVD sellthrough has been on a downslide, but that new avenues of getting entertainment to the masses have been opening up regularly.

“You can’t discount the economy,” said Simon Swart, EVP and GM North American for 20th Century Fox Home Entertainment, adding that just two years ago jobs at the studios were going unfilled. “We’ve got unemployment in the teens; 30% [of consumers] are distressed.”

John Rubey, president of digital entertainment company AEG Network Live, suggested that “DVD [is] a victim of its own success.” Consumers have become so used to having the content they want, thanks to DVD, that now they want it in a number of forms from a number of outlets, he said.

The story the media did pick up was the Black Friday success of both Blu-ray Disc players and software, he and other panelists agreed.

“For those of you shopping on Black Friday, you saw most of the crowd in the back [near DVDs, Blu-rays and electronics],” Horak said.

He said Blu-ray Discs accounted for 14% of Warner home media sales during the week of Black Friday, and Blu-ray catalog titles sold four times as well during that week compared to the same week in 2008.

“The retailers were very aggressive with pricing,” he said. “They stepped up and really supported the format.”

But while the high-def format got a push from deep-discounted discs and cheap hardware, physical media is facing more challenges than ever, panelists agreed. Horak said that consumers’ first decision is whether they want to rent or own, and then they decide whether they want the content on a disc or not.

“We have to be open to new business models,” Swart said. “When you look beyond packaged media, I see nothing but opportunity.”

He suggested the home entertainment industry take a long look at the screens in Best Buy, and not just the HDTVs, but the mobile phones and other, smaller electronic devices.

“We have to create business models that fit every one of those screens,” he said.

Blair Westlake, VP of Microsoft’s media and entertainment group, said the biggest challenge content owners face is the breadth of available outlets for media.

“You’re competing with yourself,” he said, noting that consumers have spent 15 million hours on Netflix via the Xbox 360. “The amount of choices just goes on and on. The real challenge now is [to find] the business model that makes sense.”

That thought was seconded — and backed up with data — by Jamie McCabe, EVP of worldwide PPV, VOD and electronic sellthrough for Fox. He said that year-over-year VOD has been up 100%, mostly through cable outlets. “[And] the Internet is upping the ante for everybody,” he said.

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