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Thomas K. Arnold is considered one of the leading home entertainment journalists in the country. He is publisher and editorial director of Home Media Magazine, the home entertainment industry’s weekly trade publication. He also is home entertainment editor for The Hollywood Reporter and frequently writes about home entertainment and theatrical for USA Today. He has talked about home entertainment issues on CNN’s “Showbiz Tonight,” “Entertainment Tonight,” Starz, The Hollywood Reporter and the G4 network’s “Attack of the Show,” where he has been a frequent guest. Arnold also is the executive producer of The Home Entertainment Summit, a key annual gathering of studio executives and other industry leaders, and has given speeches and presentations at a variety of other events, including Home Media Expo and the Entertainment Supply Chain Academy.


TK's Take
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20 Aug, 2009

Year's Top Movie Coming to Disc Oct. 20

Big news this morning: The year's biggest box office hit, Transformers: Revenge of the Fallen, will be released on DVD and Blu-ray Disc Oct. 20 by Paramount Home Entertainment. Special features include a comprehensive documentary chronicling the making of the Michael Bay blockbuster, which has taken in around $820 million worldwide; an "all-access" featurette that lets viewers spend a day with Bay; indepth looks at a dozen characters in the movie; and multi-angle breakdowns of several of the film's most compelling action scenes.

The Blu-ray Disc and two-disc special-edition DVD also will include something called "augmented reality technology" that lets viewers interact with a holographic image of Optimus Prime using their own webcams and a special website. They can play a game in which they are asked to piece together the matrix of leadership to bring Optimus back to life, help repair his armor and calibrate his weapons by controlling his aim during target practice.

Exclusive to the Blu-ray Disc release is another interactive feature that lets viewers customize their own robot characters and catch a glimpse of a rogue robot. Out of all the various permutations, one will unlock an exclusive interview with Bay (sort of like the Easter eggs of old) in which the director talks about plans for his next Transformers adventure.

 

  


18 Aug, 2009

Redbox Ruling Not What Most Expected

Well, the verdict is in, and it's not quite what everyone expected. Given our legal system's history of siding with intellectual property owners, studio executives were hoping a federal judge would quickly dismiss an antitrust lawsuit filed by Redbox against Universal Studios Home Entertainment over the studio's decision to impose a 45-day window on new releases. Similar windows subsequently have been imposed by 20th Century Fox (30 days) and Warner Bros. (28 days), and Redbox has already filed a similiar suit against Fox, with a third action likely against Warner. The Universal suit hasn't seen any action since last March, but today's ruling--and you can read the full story by clicking here--came as something of a surprise, since studio executives have privately said they believe a ruling in Universal's favor was imminent. Not that this is a defeat for Hollywood's attempts to maintain control over its own product, since the actual suit has yet to be heard, but it's certainly a setback.

Here's the press release that just came in from Redbox, which also directs reporters to a new site the kiosk company has launched in an attempt to get the public all riled up over the studios' attempts to crack down on dollar rentals. Studios believe the low price and ready availability of video-rental kiosks in such places as Wal-Mart stores is cannibalizing the sales business, while Redbox chief Mitch Lowe--a former independent retailer and Netflix pioneer--argues that his company is merely giving consumer what they want in these trying economic times.

 
FEDERAL COURT RULES REDBOX CAN PURSUE ANTITRUST SUIT AGAINST
UNIVERSAL STUDIOS HOME ENTERTAINMENT
 
 
For Immediate Release:  August 17, 2009
 
Oakbrook Terrace, Ill. – The United States District Court for the District of Delaware announced today that it has denied Universal Studio Home Entertainment’s motion to dismiss the antitrust lawsuit filed by redbox.
 
The Federal Court’s decision marks an important step forward in our effort to protect consumers’ right to convenient, affordable access to new release DVDs at redbox locations nationwide,” said Mitch Lowe, president, redbox.  “We appreciate the Court’s thoughtful review of this issue and look forward to pursuing our claim and protecting our consumers’ rights.” 
 
A copy of the decision can be found at www.savelowcostdvds.com, a site dedicated to educating the public on redbox’s effort to protect consumers’ rights against studio action.  

 


13 Aug, 2009

Warner Also Puts Redbox on Window Alert

As expected, Warner Home Video has chimed in with the "fight club" of studios that don't want Redbox renting their new releases for a buck the day they come out.

A day after the kiosk company fiiled suit against 20th Century Fox over imposing a 30-day delay, Warner Home Video has informed Redbox of a 28-day window before making titles available to kiosks. But while Fox's window was imposed through third-party distributors, Warner's announcement was coupled with word that it is eliminating whoilesalers and, come October, will sell direct to both kiosks and mail-order subscription rental programs (Netflix and the various Netflix wannabes).

Interesting tactic. Warner's line is that if it deals direct with different classes of vendors, it can impose different "business options," including windows (for kiosks) and revenue-sharing (for subscription rentals). We shall see if that reasoning will keep Warner from the legal line of fire Redbox already has aimed at Fox and, previously, Universal Studios, the first studio to just say "no" to Redbox last year with its 45-day window rule.

Here is the Warner press release, in its entirety:

Burbank, Calif., August 13, 2009 – Warner Home Video (WHV) today informed its wholesalers that beginning in October, WHV will engage solely in direct relationships with kiosk and mail-order subscription vendors.

Through a direct relationship, WHV can ensure that its titles are available through a variety of distribution models to serve all types of consumer preferences. WHV will be in discussions with both kiosk and mail-order subscription vendors, offering business options that will allow all parties to grow their respective businesses. The options offered to kiosk vendors will include a 28-day window, while mail-order subscription customers will also have a day-and-date revenue sharing option. Additionally, WHV has revised their wholesaler terms to prohibit the purchase and sale of WHV previously viewed product.


12 Aug, 2009

'Witch' Wins Top-Selling DVD Race

Walt Disney Studios Home Entertainment scored the top slot on the weekly home video sales chart for the week ending August 9 with Return to Witch Mountain, according to Nielsen VideoScan First Alert. Sony Pictures, meanwhile, snagged the top rental spot with Obsessed, according to Home Media Magazine's market research department. Obsessed was the No. 2 seller, while Witch Mountain was the No. 2 renter. Complete story to follow.


12 Aug, 2009

Here We Go Again!

I've got some breaking news for you!
 
Redbox Automated Retail has filed suit against 20th Century Fox Home Entertainment over the studio’s decision to withhold its new DVD releases from the kiosk company by 30 days. Last year Universal Studios imposed a 45-delay on sales to Redbox and promptly became the first studio to be sued by the kiosk company (although, in all fairness, Universal sued first, to stop Redbox from renting its titles until given the OK by the studio).
 
 
This is getting very, very interesting. Studios are fairly unanimous in their sentiments that buck-a-night kiosks rentals are hurting the DVD sellthrough business, particularly since so many of those kiosks are now situated in the lobbies of Wal-Mart stores, the nation's No. 1 retail seller of DVDs. But they are split into two camps over how to deal with this menace: Fight them to the death, or sleep with the enemy.
 
Universal and Fox, clearly, are in the former category, while both Sony Pictures and Lionsgate have cut deals with Redbox to effectively lease new DVD releases to the kiosk company. Under those deals, sales of previously viewed rental product--which studios see as another big factor behind sagging DVD sales--is verboten.
 
I wonder what's going to happen next. My hunch: Warner will join Fox and Universal in their battle to treat Redox like a dollar movie house that shouldn't get first-run movies, while Paramount will cut some sort of deal, following Sony and Lionsgate. The wild card: Disney.


11 Aug, 2009

Justin's Done With YouTube, Back Into Watching DVDs

My oldest son, 13-year-old Justin, fits squarely and neatly in the YouTube demographic. And, indeed, he loves watching short clips he finds and then recommends, via text, to his friends (his latest find, I admit, is a real treasure; see for yourself).
 
But recently I've noticed a change in his behavior. He's not as avid a YouTube watcher as he once was, telling me it gets boring, after awhile. He also seems to want a little more depth, more substance, in his entertainment. Not having the attention span to download full-length movies, guess where he's spending more and more of his summer down time, when he's not reading, hiking, going to the beach or playing video games? You guessed it--on the family room sofa, watching movies. Virtually every day he calls me at work, asking me to recommend something. And when he sees a movie that he likes, such as 1999's Stir of Echoes, he promptly recommends it to his friends, via text, of course.
 
No, I'm not too worried about our business.

 


10 Aug, 2009

10 Big Ones

We’re getting ready to celebrate our 30th anniversary. Yes, it’s been exactly three decades since Stuart Karl, who would later rise to fame for launching the Jane Fonda fitness video series, started publishing what was then known as Video Store Magazine in the garage of his Orange County, Calif., home.
 
To celebrate our 30th birthday, we are planning a special issue next month, and a key part of that issue will be a retrospective feature highlighting what our editors consider the 10 biggest stories of the home video era.
           
This task gets harder each time we celebrate an anniversary, since so much tends to happen every five years. Since our last anniversary issue was published in 2004, we’ve seen an end to soaring year-over-year DVD sales gains, the launch of a new format, a divisive format war and the unexpected resurgence of rental. We’ve also seen the emergence of digital delivery. Five years ago YouTube, “user-generated content,” Hulu and EST were in no one’s vocabulary; today, they’re every bit as much a part of our business as DVD, Blu-ray Disc, sellthrough and rental.
           
I’d like to throw my own personal list of the video era’s 10 biggest stories out there for our readers to review. This list was compiled one morning on my Blackberry during my daily pre-work hike, stream-of-consciousness style, and is presented here in reverse chronological order. I’d love to hear from you—please email me with your comments at tarnold@questex.com.
 
10. The resurgence of rental (and studio haplessness as kiosks proliferate but share none of the spoils, at a time when the economy, and DVD sales, take a tumble).
 
9. Digital delivery takes off (not so much streaming and downloading of movies as the fast acceptance of alternative forms of entertainment, from YouTube clips to Hulu).
 
8. The launch of Blu-ray Disc (and the protracted format war that preceded it).
 
7. Rental’s do-or-die transformation (from traditional brick-and-mortar to the Netflix subscription model and the proliferation of kiosks).
 
6. Sellthrough’s explosive growth, 2001-2004, and home video eclipsing theatrical as Hollywood’s primary revenue stream.

5. The demise of the independent video rental store (round two, as DVD takes the business sellthrough and the mass merchants take over).
 
4. The launch of DVD (which changed consumer habits from renting to buying and took our industry to new heights).
 
3. The rise of the public video chains (which grew the business but also undermined the base of independent rental stores, triggering significant changes in the way the business operates—including revenue-sharing, supply-side economics and direct selling by studios).
 
2. The First Sale Doctrine, which solidified retail’s right to rent just as our first format war,
between VHS and Beta, was beginning to wind down.
 
1. Andre Blay birthing the business by licensing 50 films from 20th Century Fox and releasing them on videocassette.
 


7 Aug, 2009

Redbox Plays the Customer Card

All right, I'm back. In case you were wondering where I was and aren't following me on Twitter or Facebook, I spent the last week backpacking in Yosemite National Park, making do without running water, bathrooms and electricity. Am I glad to be back? HECK YES!!!
 

 I spent last night catching up on emails and industry news and saw that another salvo has landed in the stare-off between the studios and Redbox: 20th Century Fox is calling for a 30-day delay in new release DVD movies becoming available in buck-a-night rental kiosks (for the original story, click here). 

That's in sync with the perception by some studios that rental kiosks are the home entertainment industry's equivalent of dollar movie houses and, like their theatrical brethren, should not get first-run movies. 

Our story prompted this official rebuke from Redbox, which appeared in my email box early this morning: 

Oakbrook Terrace, Ill. – Despite 20th Century Fox’s effort to delay consumer access to new release DVDs by 30 days at rental kiosks, redbox reaffirms its commitment to providing consumers new release DVDs.  Redbox will protect consumers’ rights to access new release DVDs at their preferred retail channel at the price the consumer deems reasonable.  Redbox will continue to carry all major new releases, including 20th Century Fox titles, at the more than 17,000 redbox locations nationwide. The first priority at redbox is the customer.  

Smart move by Redbox to play the customer card--although the studios could rightly argue that if the customer is always in the driver's seat, new release movies routinely could be downloaded for free over the Internet. The customer, you see, is not always right, particularly in this new era of entitlement when nobody feels they should have to pay for anything. But by the same token, Redbox is complying with the law, specifically the First Sale Doctrine--and it does have a point, saying it is merely following the business. 

The real issue, of course, comes down to dollars. Redbox is making a mint by renting studio movies and not sharing any of the proceeds with Hollywood. And at the same time, the kiosks are undercutting not just regular rental dealers, but also the sellthrough business, which in the studios' eyes is far more important. 

I don't think this matter will be resolved anytime soon, if ever--hence, the differing approaches the studios have taken in dealing with Redbox, from Universal Studios' lawsuit to Sony Pictures' five-year deal to lease its titles to the kiosk company. 

Stay tuned for what happens next.

 


1 Aug, 2009

A Picture's Worth a Thousand Words

Thanks, David!
Thanks, David!

After reading one of my columns on the Redbox rental kiosk phenomenon, a reader by the name of David Sedman of Dallas sent in this photo he snapped at the Dallas-Forth Worth Airport. "I think the people in DFW think that Redbox is a service consumers are well pleased with, based on this photo I shot last weekend," he writes. Sedman also noted that some stores in the Dallas area with Redbox kiosks "added second units to alleviate long lines."

 


30 Jul, 2009

Following the Money

You’ve got to hand it to the studios—if nothing else, they sure know how to follow the money.
 
After more than half a year of slumping DVD sales but soaring rental action, studios that had previously all but ignored the rental market are all of a sudden clamoring to get back in.
 
Two studios, Paramount Home Entertainment and Summit Entertainment, last week announced a “back to the future” ploy in which they will release titles exclusively to the rental market before selling them to the big retail sellers of DVD and Blu-ray Disc software.
 
When Summit’s “The Brothers Bloom,” currently near the end of a limited theatrical release, hits DVD and Blu-ray Disc Sept. 29, sales will be limited to rental dealers. Wal-Mart, Best Buy and other big sellthrough merchants are going to have to wait until the first part of 2010 before they can buy the title from Summit, at a discount from the usual wholesale price for a new release.
 
Similarly, Paramount announced that when the Wayans brothers comedy “Dance Flick” comes out on disc Sept. 8, a DVD of the original, rated version will only be sold to rental dealers. Sellthrough retailers will have to pick up the Blu-ray Disc edition, featuring an unrated version of the film plus gobs of extras, or wait four to eight weeks for a sellthrough DVD release.
 
Both moves came just one week after Sony Pictures Home Entertainment stunned—and, some say, angered—other studios by reaching an agreement with Redbox to effectively lease its titles for distribution through the chain’s 17,000 rental kiosks, in a five-year deal valued at $460 million. Studio executives have long railed against Redbox for allegedly devaluing DVDs by renting them for only a buck—and, more recently, for cannibalizing the sellthrough business by setting up shop in the entryways of Wal-Mart stores. Universal Studios Home Entertainment has even gone to court to try to stop Redbox from renting its titles, while another studio president told me that in his view Redbox kiosks are the equivalent of “dollar movie houses” that certainly should not get first-run releases.
 
But hey—according to mid-year estimates from Rentrak, consumer spending on video rentals is up a remarkable 8.3% so far this year. And studio executives, who undoubtedly are getting hammered by their bosses for lackluster DVD sales numbers, are going to do what they have to do to make those elusive budgets and forecasts—even if it means sleeping with the enemy.
 
Business, after all, is business.