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Thomas K. Arnold

July 27, 2009
A Little of This, A Little of That....

Greetings, everyone. I'm finally back in the saddle after a week of vacation--I tried to keep in touch but the Internet connection at my hotel was horrendous! I got back in town in time to visit Comic-Con on Friday and I was amazed at how big home entertainment's presence was this year. It's almost as though with no Home Media Expo to contend with, the studios unleashed everything they had at Comic-Con. I had a great evening of cocktails with the Universal Studios Home Entertainment team, still agog about Coraline, and ran into countless publicists who were all running around like chickens sans heads. 20th Century Fox Home Entertainment had its own booth for the first time, and our own Agent DVD, the consumer magazine we produce each year specifically for Comic-Con, was EVERYWHERE. It even made the Los Angeles Times, in a huge three-column photo of a handicapped girl eagerly clutching her copy on the show floor.

I spent most of today on the phone, catching up on gossip. Tongues are wagging over talk that one studio home entertainment president reportedly has approached Paramount about taking over as worldwide president, filling the shoes of Kelley Avery, but that studio higher-ups are looking for someone outside the industry. "They want a true visionary," a source close to Paramount said.

I also just received a copy of the Entertainment Merchants Association's annual report on the home entertainment industry, a bit anticlimactic now that DEG: The Digital Entertainment Group has positioned itself as the official provider of studio numbers, but still interesting. Among the report's key findings not part of any previous report: DVD rental kiosks in calendar 2008 had a 6% share of the rental market, up from just 2% the year before, while brick-and-mortar rental stores continued to have a commanding 69% share of the business. Do the math and that leaves Netflix and its various subscription competitors, all of them small potatoes, with 25%.

July 24, 2009
Guess Who's Back?

I'm back from vacation and heading down to San Diego, my hometown, for Comic-Con. For the best updates, please stay tuned to our Web site as well as that of our consumer magazine, Agent DVD, which lives in print just once a year, at Comic-Con, but online is being updated all the time. You can check out the Agent DVD Web site by clicking here.

July 20, 2009
Rental Strong in Hawaii

I'm vacationing in Maui this week with the family and I couldn't help but think about our industry when I saw the proliferation of video rental stores all over the island. Every strip mall in and around Lahaina, it seems, has one. I haven't checked out the Wal-Mart by the airport yet for any sign of Redbox, but my hunch is that if there is one, it is doing boffo business.

July 15, 2009
Scaling the Summit

Steve Nickerson must be feeling pretty good right about now. The ex-Warner Home Video executive, now in charge of Summit Entertainment's home entertainment division, just scored his second No. 1 home video seller and renter with Knowing, following a similar chart-topping feat in late March with Twilight--which, incidentally, remains the top-selling home video title of the year. For the full story, click here.

July 14, 2009
A Blockbuster of a Perception Problem

I read with interest our report on the see-saw share prices of Netlix and Blockbuster (see Erik Gruenwedel's story by clicking here). Netflix share prices see-SOARED to a three-month high on speculation that the aggressive online DVD rental pioneer may be acquired by Amazon. Blockbuster shares, meanwhile, took a dive to close yesterday at 58 cents, down 82% from a 52-week high of $3.19 per share Aug. 6, 2008. Heck, I remember when Blockbuster shares were trading at well over $15 per share--and thinking, "Man, that's bad--they sure took a hit since they started trading at $25 a share." I checked around the Web a little and found this little ditty from Smart Money, dated May 2005: "Low expectations have already taken their toll on Blockbuster's share price. The stock has bounced around a much-diminished ranged of highs and lows this year, ending 2004 at $9.54 a share, dropping below $9 for parts of March and April, and hitting a recent low of $8.45 a share on March 30. That's about half of the stock's 52-week high of $16.41 touched precisely 52 weeks ago." Boy, what Jim wouldn't give to be at $9, eh?

The sad thing is that Blockbuster's low value in the eyes of the investment community has everything to do with the perception that video rental, at least the traditional store-based model, is a relic and anyone associated with it isn't worth beans. Investors are keen on Netflix, mostly because of the company's history of strategic thinking, smart forecasting and willingness to talk about what's going to happen next (streaming). They also like Redbox because, well, those dollar kiosks are making a heck of a lot of money, and everyone's reading the reports that in this troubled economy people are looking for bargains and what's a better deal than a buck a night for a hot new movie?

And yet I can't help but wonder, if Netflix and Redbox had both emanated from a brick-and-mortar rental-store operation like Blockbuster, would they be the darlings that they are? Or would investors thumb their noses at them the way they do at Blockbuster, and accuse them of desperate tactics to remain afloat?

Everytime Netflix or Redbox make a move, investors applaud. Everytime Blockbuster makes a move--even if it's the same moves Netflix or Redbox have made, like offering subscription rentals or launching a fleet of kiosks--it gets lambasted as a dinosaur that doesn't know when it's time to sink back into its mudhole and let nature take its course.

Shaking a bad reputation can be a real bitch--even when that reputation isn't deserved.

Insights from the "voice of the home entertainment industry." Thomas K. Arnold gives the inside scoop on entertainment news, DVD, Blu-ray releases, and what's happening at the key studios and retailers.