2010 Year In Review

27 Dec, 2010 By: Erik Gruenwedel

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Studios opened new-release windows on Netflix, Redbox and NCR’s Blockbuster Express in 2010, striking an uneasy, but more profitable, balance with subscription and kiosk services. Meanwhile, Blu-ray Disc continued to grow and promised a new market for 3D. Laying the groundwork for what many hoped would be future growth, the industry navigated a year in transition.

JANUARY

» Warner Home Video and Netflix replace a previous revenue-sharing deal with a new agreement that pushes back the Netflix availability of new releases to 28 days after street date. Netflix says it will soon offer streaming via Nintendo’s Wii video game console.

» Walt Disney Studios reveals plans to roll out KeyChest by year’s end, allowing its films to be stored in a virtual locker in the cloud and to be playable on multiple platforms and devices.

» Movie Gallery, which also owns Hollywood Video, eyes the closure of nearly 40% of its 2,700 U.S. locations.

» Holiday retail sales of the PlayStation 3 top 3.8 million units from Nov. 24 to Dec. 28, 2009 — representing the highest recorded PS3 sales for a holiday period.

» Home entertainment industry trade magazine Video Business ceases operations after 29 years.

» Redbox sets a one-day rental record renting more than 2 million DVDs on New Year’s Eve.

» Trans World Entertainment Corp., parent of F.Y.E. stores, says average winter holiday customer purchases declined 9%, resulting in sales of $241 million, compared with $287 million during the same period the previous year.

» Blockbuster CEO Jim Keyes says proliferation of kiosks and Netflix streaming pose formidable challenges in 2010.

» YouTube begins offering video-on-demand of films screening at the Sundance Film Festival.

FEBRUARY

» Walmart and Target begin limiting the quantity of disc purchases of new-release movies — a move designed to undermine rental kiosks acquiring content through retailers, instead of distributors.

» Netflix shows interest in acquiring content from HBO, Showtime and Epix, among others. The service boasts 12.3 million subscribers.

» Sony Pictures Home Entertainment president David Bishop restructures the studio’s executive team.

» Price drops will help Blu-ray Disc players and recorders surpass 80 million units sold by 2013, a research report says.

» Universal Studios Home Entertainment for the first time offers a new release, Pirate Radio, to cable video-on-demand, electronic sellthrough and streaming one month ahead of the disc release.

» Movie Gallery, owner of Hollywood Video, files for Chapter 11 bankruptcy protection a second time.

» Technicolor says it will begin handling disc replication and distribution services for Warner Home Video, beginning in the third quarter of this year. Cinram loses that business.

» Rental kiosk operator e-Play suspends operations.

» Redbox argues its lawsuit against Warner should go forward since a judge already allowed it to argue antitrust violations against Universal in a similar case.

» Blockbuster Express parent NCR says rental kiosks were the “headline event” of 2009 for the company.

» Media executives give kudos to beleaguered packaged media for helping to produce strong quarterly results at their respective studio units.

» Redbox surpasses analysts’ expectations, reporting fourth-quarter DVD revenue of $231.8 million.

» Sony says the BDP-S470 Blu-ray player will be 3D-capable with a firmware update.

» Warner Home Video and Redbox iron out an agreement under which the kiosk vendor agrees to 28-day windows on new releases. Coinstar’s CEO says Redbox will likely carry Blu-ray by mid-year.

MARCH

» Image Entertainment reduces its workforce by 30%, or about 36 people.

» Walmart acquires movie-download service Vudu for a reported $100 million.

» Blockbuster says it will accelerate store closures should all studios not agree to delay new-release discs to kiosks and subscription services. Warner Home Video obliges, giving Blockbuster The Blind Side and Sherlock Holmes nearly a month before Netflix and Redbox.

» Blockbuster reinstitutes late fees and hints it could cease operations due to severe liquidity and debt issues.

» RealNetworks agrees to pay studios $4.5 million in litigation fees associated with the ill-fated RealDVD copying software.

» An Indiana county orders kiosks to remove all DVDs rated above ‘G’ or face prosecution under state law.

» Panasonic becomes the first manufacturer to sell a 3D home entertainment system at a Best Buy in New York. Samsung and Sony debut 3D-ready LED televisions and Blu-ray Disc players.

» Viacom says unsealed e-mails prove YouTube intentionally ignored copyrights for years.

» Hollywood studios and cable/satellite operators launch a PR campaign aimed at increasing consumer awareness of VOD.

» Hastings Entertainment fourth-quarter profit increases.

APRIL

» A Netflix app is included with the launch of Apple’s iPad tablet computer.

» Nearly 36 million households prefer renting a new release, compared with 31 million households that prefer purchasing, according to a research report.

» Barron’s names Netflix founder Reed Hastings among its annual selection of top 30 CEOs.

» An appeals court says the Federal Communications Commission doesn’t have the authority to keep Internet service providers from blocking some Web traffic.

» Netflix inks new distribution deals with 20th Century Fox Film Corp. and Universal Studios Home Entertainment, gaining access for the first time to primetime TV streaming content in exchange for windows on disc new releases.

» Walmart co-produces the made-for-TV movie Secrets of the Mountain, which is released on DVD the day after its network broadcast.

» Netflix shares reach a record high when its iPad app becomes the top free downloaded software application by consumers of the tablet computer.

» Consumer spending on home entertainment rose 2% in the first quarter, reports The DEG: Digital Entertainment Group.

» Traditional video stores are on track to generate 47% of domestic rental revenue in 2010 — down 12% from 2009, according to a research report.

» NCR Corp. says Blockbuster Express kiosks in the summer will offer new-release DVD movies for sale and rental.

» Netflix reports nearly 14 million net subscribers at the end of the first quarter, topping analyst predictions.

» Redbox agrees to 28-day delays for new releases from 20th Century Fox Home Entertainment and Universal Studios Home Entertainment. NCR Corp., which owns Blockbuster Express, is considering windows as well.

» YouTube expands its VOD from independent films to major studio releases.

» Hulu plans to offer a $10-a-month subscription service for viewing catalog TV episodes.

» A Chinese software company bows software it claims converts DVDs to files playable on the Apple iPad.

» A Los Angeles production company launches a chain of automated stores selling and renting DVD/Blu-ray Disc movies and video games.

MAY

» Twentieth Century Fox Home Entertainment says consumers bought a record 2.7 million Blu-ray Disc units of Avatar in the first four days of the film’s home entertainment release, making it the fastest-selling and top-selling Blu-ray Disc ever.

» Netflix’s stock soars past the $100-per-share mark.

» The NPD Group says Blu-ray player penetration in the United States has nearly doubled to 11%.

» Bankrupt Movie Gallery, owner of Hollywood Video, says it will cease operations.

» NCR Corp., which owns Blockbuster Express, signs a distribution deal with Xtra Mart.

» Strong home entertainment sales from Sherlock Holmes, The Blind Side and Valentine’s Day contribute to Warner Bros. posting first-quarter operating income of $307 million, up 43% from income during the same period a year before.

» Blockbuster posts a $65 million quarterly loss; CEO Jim Keyes calls for increased studio support.

» Walmart expands its home entertainment presence in more than 1,200 stores nationwide, including allocating up to 50% more floor space for Blu-ray Disc players and movies.

» The FCC approves the Motion Picture Association of America’s request for premium VOD, opening a new window for home release prior to a film’s packaged-media release.

» DVD and Blu-ray Disc sales from Michael Jackson: This Is It, Angels & Demons and Armageddon contribute to Sony Pictures posting fiscal-year operating income of $460 million, up 78% from last year.

» Best Buy launches a movie-download service with the CinemaNow brand name.

» Netflix CEO Reed Hastings says the cost to license electronic titles from the studios exceeds that of comparable DVDs.

» Screen Digest projects 13-week U.S. sales for Avatar will reach 14 million copies, including 3.9 million copies on Blu-ray and 10.1 million DVDs.

JUNE

» Redbox bows Blu-ray Disc rentals at $1.50 a night.

» Walt Disney Studios Home Entertainment baffles some analysts by releasing Alice in Wonderland to discount rental channels Redbox and Netflix on retail street date. Walt Disney CEO Bob Iger defends the company’s decision as a necessity to staying relevant in the changing home entertainment market.

» Apple sells 2 million units of its iPad in less than 60 days after launch and says the free Netflix app will be available for the iPhone in the summer.

» Time Warner CFO John Martin says Warner Bros. generated 10% of the media company’s profit, in large part due to its aggressive move into VOD.

» Joe Malugen, co-founder of shuttered Movie Gallery/Hollywood Video, is working to roll out a chain of automated rental/retail stores. In an interview with Home Media Magazine, he says he remains dumbfounded by the studios’ support for $1-per-day kiosks.

» Redbox and Paramount Home Entertainment extend a distribution deal granting the kiosk vendor continued access to DVD and for the first time Blu-ray Disc new releases on street date.

» Best Buy begins accepting used video games in exchange for gift cards.

» Market research firm IMS Research, in a survey of U.S. and Western European consumers, found that of the 13% of respondents who planned to buy a 3DTV in the next two years, 62% also planned to buy a 3D-enabled Blu-ray player in that same time period.

» Netflix CFO Barry McCarthy says limited content devalues a streaming service as a standalone property.

» A U.S. District Court judge dismisses Viacom’s 3-year-old, $1 billion copyright infringement suit against Google-owned YouTube.
» Lionsgate and MGM are reportedly in discussions about a possible merger.

» The 28-day delay of new-release movies to kiosks continues to hurt investor confidence in parent Coinstar, an analyst says.

JULY

» Hulu launches a $9.99 monthly subscription service, dubbed Hulu Plus.

» Blockbuster shares are briefly delisted by the New York Stock Exchange after the company fails to acquire shareholder approval for a reverse stock split.

» NCR Corp. signs deals to add 500 Blockbuster Express kiosks to convenience stores in the mid-South.

» Image Entertainment’s ongoing reorganization helps narrow its fourth-quarter loss.

» Netflix signs a distribution deal with Relativity Media to stream select theatrical movies ahead of pay-TV channels such as Starz, HBO and Showtime.

» A survey shows that awareness of 3DTV has jumped from 39% in December 2009 to 89% in May.

» Dean Wilson, COO for First Look Studios and co-founder of Blockbuster’s former in-house production company, DEJ Productions, dies July 20 after suffering a heart attack.

» Warner Home Video and Netflix expand an existing streaming content agreement to add catalog TV shows, including all episodes of “Nip/Tuck.”

» Netflix reports second-quarter income of $43.5 million, up more than 32% from net income of $32.4 million during the prior-year period.
» The Digital Entertainment Content Ecosystem unveils a consumer brand name for its “cloud-based” storage system: UltraViolet.

AUGUST

» Redbox bows Blu-ray Disc rentals as second-quarter results disappoint.

» Redbox announces a deal to install rental kiosks in thousands of CVS/pharmacy locations nationwide, in Puerto Rico and in subsidiary Longs Drugs locations in Hawaii.

» Time Warner CEO Jeff Bewkes says windowing of new-release titles is having a desired effect on rental kiosks, in addition to increasing electronic sellthrough and VOD revenue.

» Replicator Cinram announces plans to cut 310 jobs at its Olyphant, Penn., facility in December.

» Shuttered Movie Gallery/Hollywood Video posted a net loss of $46.4 million from June 7 through July 4, according to a bankruptcy court filing.

» Disc sales of the James Cameron’s all-time global box office champ Avatar and Ice Age: Dawn of the Dinosaurs drive a record $1.3 billion in operating income for 20th Century Fox Studios.

» Image Entertainment reports a first-quarter loss of $41,000, compared with a loss of more than $3 million during the same period a year before.

» Hastings Entertainment narrows its net loss for the second quarter to approximately $100,000 from $400,000 during the same quarter in 2009.

» Netflix makes available free apps for the Apple iPhone and iPod Touch that allow subscribers to stream movie rentals onto the portable media devices.

» Blockbuster talks to studios and creditors as it prepares a pre-packaged bankruptcy filing.

SEPTEMBER

» Apple unveils a downsized edition of the AppleTV, which for the first time offers users digital access to rental streams of new-release movies and TV programs.

» Blockbuster misses a Sept. 1 interest payment to holders of a junior secured note or bond.

» Venerable Jane Fonda, one of the early proponents of home video, returns with a new series of fitness titles from Lionsgate.

» Walmart settles an antitrust lawsuit that alleged the retail behemoth entered into an illegal agreement with Netflix when it exited the online DVD rental business.

» Redbox rents its 1 billionth disc.

» Comcast’s CFO says the cable operator has the technology to compete with Netflix streaming.

» Warner Home Video says it will release six 3D Blu-ray Disc titles at retail, including Cats & Dogs: The Revenge of Kitty Galore, Clash of the Titans, The Polar Express, Imax Deep Sea 3D, Imax Under the Sea 3D and Imax Space Station 3D.

» Blockbuster CFO Thomas Casey tenders his resignation on Sept. 11.

» Redbox customers have little interest in downloading or streaming movies from kiosks, a Coinstar executive tells an investor group.

» Best Buy reports second-quarter net income of $254 million, up 60% from net income of $158 million during the prior-year period, despite ongoing recessionary pressure on consumer spending.

» Sony Pictures Home Entertainment launches a manufacture-on-demand online service that allows film buffs to purchase more than 100 classic titles from its Columbia Pictures catalog for the first time on DVD.

» Blockbuster files a pre-packaged bankruptcy in U.S. Bankruptcy Court in New York and initiates a $125 million debtor-in-possession financing loan provided by senior bondholders to maintain operations.

» Netflix formally launches a monthly subscription-based streaming service that allows Canadian users to stream movies and TV programming for $7.99 (Canadian) per month.

» Warner Bros. Home Entertainment’s 28-day delay of new-release movies to Redbox and Netflix helps increase packaged-media sales 15% since implementation of the strategy earlier in the year, Time Warner Inc. CFO Martin tells an investor group.

OCTOBER

» A bankruptcy court judge authorizes Blockbuster to pay initial pre-petition claims to 20th Century Fox Home Entertainment, Warner Home Video and Sony Pictures Home Entertainment totaling $28 million — a little more than half the $53.8 million owed to the studios.

» The percentage of U.S. households with at least one Blu-ray Disc player has doubled since 2008, reaching 17% in July, according to a new report.

» Paramount Pictures restructures internal operations, a move that eliminates 53 positions worldwide and consolidates the studio’s direct-to-video DVD segment.

» With the critical fourth quarter well underway, the latest DEG: Digital Entertainment Group statistics show consumer spending on home entertainment through the third quarter to be running about 4% behind the previous year.

» Google bows its Google TV platform via a premium-priced Sony Bravia unit.

» Netflix considers a streaming-only service in the United States, despite research that says subscribers prefer to rent discs. The company adds 2 million subscribers in the third quarter.

» NCR Corp. signs a distribution deal with Universal Studios Home Entertainment that gives the owner of Blockbuster Express kiosks access to new-release titles 28 days after street date.

» Sony Pictures Home Entertainment and Netflix agree to 28-day delays on a title-by-title basis.

» ABI Research says nearly 50 million 3DTV units will be shipped by 2015; Blu-ray player sales are projected to approach 24 million in 2010.
» Media reports say Blockbuster CEO Jim Keyes may be out by the end of the year.

NOVEMBER

» Blockbuster gets approved to appoint a chief restructuring officer and pay off some of its studio claims.

» Vudu says it will expand its VOD service with Boxee software and the upcoming launch of the Boxee Box set-top platform.

» Time Warner CEO Jeff Bewkes considers extending its 28-day retail window agreement.

» MGM files a pre-packaged Chapter 11 plan of reorganization in the U.S. Bankruptcy Court in New York.

» Blu-ray/DVD combo packs drive 80% of early retail sales of the Blu-ray version of Toy Story 3.

» NCR Corp. reaches an agreement with 20th Century Fox Home Entertainment for a 28-day window on new-release titles at Blockbuster Express kiosks, while also testing day-and-date premium rental in select markets.

» Blockbuster bows its first national TV ad since the 2007 Super Bowl.

» Trans World’s CEO says Blu-ray will drive holiday video sales.

» Netflix bows a U.S. streaming-only service for $7.99 per month. The service is available on more than 200 connected devices.

» Bankrupt Blockbuster rolls out tiered in-store rental pricing for movies, including offering select catalog DVD titles for 99 cents for three days.

» Viacom blocks content to upstart Google TV.

DECEMBER

» Blockbuster Express tests premium pricing on select new releases at 900 kiosks nationwide.

» Level 3 Communications — a technology service provider for Netflix — and Comcast engage in a war of words regarding the cable company’s attempt to raise Level 3’s electronic distribution fees due to increased video traffic.

» Netflix expands its license agreement with the Disney-ABC TV Group. CEO Reed Hastings says the service can survive without renewing the Starz Entertainment license deal.

» Time Warner CEO Jeff Bewkes and Viacom CEO Philippe Dauman differ on their approaches to premium VOD and Netflix streaming. Bewkes likes premium VOD and says Netflix’s streaming prices it too low. Dauman won’t give titles to premium VOD and sees Netflix deals as “incremental” revenue.

» Coinstar begins licensing the Redbox brand and business model overseas in the United Kingdom.

» Sonic Solutions says 1 million DVD movies have been manufactured on demand using its technology.

» Sales of premium-priced TVs (3DTVs and connected TVs) at Best Buy through Black Friday weekend disappoint, underscoring weak consumer demand.

» Blu-ray Disc movie and TV program production tops 400 million units in 2010, according to a report.

» Blockbuster Express and Warner Home Video sign a distribution deal calling for a 28-day delay on new releases.

» The FCC at a Dec. 21 hearing approved Internet neutrality rules that will force Internet service providers to treat all Web content equally, prohibiting the blocking of lawful content, applications, services and the connection of devices to networks. The three Democrats on the commission voted for them, while the two Republicans voted against them, calling it unnecessary regulation.

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