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.
'The Dark Knight Rises' second-screen app
Last week I attended a demonstration of Warner Bros.’ latest app for a home entertainment release, The Dark Knight Rises.
Apps, as I have noted before in this column, are the latest embodiment of extras in the home entertainment realm. Unlike the traditional disc extras we are used to, they are non-linear. They allow consumers the option of taking off on many different tangents that interest them about a particular movie. They can complement both a theatrical release and a home entertainment release. They can offer more content for both television series and features.
For those who may consider them just a fad, contemplate this: My 10-year-old asked me what I was doing at Warner last week. I said I was looking at an app for a movie, and she volunteered, “Oh, it’s second screen.”
“Huh?” I said, honestly dumbfounded. “How do you know that?”
“TV!” she volunteered enthusiastically.
Granted my 10-year-old may know more about this stuff than your average fifth-grader, but considering she’s never used a second-screen app I found it pretty interesting that she knew what it was.
I offer this anecdote to demonstrate that technology is more easily digested by the elementary school set. They don’t see a complicated, newfangled way to access extras. They easily get the concept of a second screen.
Speakers at the Nov. 29 Variety Entertainment Apps Conference wrung their hands about how “confounding” and confusing second-screen apps were for the consumer, but I think they may not notice that the consumer of tomorrow — the elementary set — already understands the second screen and apps. Heck, many kids are using iPads and iPods in school to access textbooks and research. They are constantly on their mobile phones. I don’t think I see my 14-year-old without a phone in her hand.
Confounding or not, apps are going to be a part of the entertainment future. It’s elementary.
Last week the Home Media Magazine staff gathered at Dress for Success Worldwide in Hollywood to donate time and money to this worthy organization.
The nonprofit promotes economic independence for disadvantaged women and provides professional attire, support and career advice to help women succeed in the workplace.
The outing and donation coincided with the publishing of our fifth annual Women in Home Entertainment section in last week’s issue, and it seemed a fitting way to celebrate the project. The staff dug into an enormous pile of donated items and helped the organization sort and size the clothes. It was a big job made a lot easier with all our hands on deck. We were so grateful for their hospitality and were delighted we could help out.
But that wasn’t the only charity outing in the industry last week. The Entertainment AIDS Alliance Visionary Awards took place at the Beverly Hilton Nov. 14, honoring David Bishop, Sony Pictures Home Entertainment president; Chris Long, SVP of entertainment and production for DirecTV; and Amazon for their longtime commitment to fighting HIV and AIDS.
EAA (formerly known as the Video Industry AIDS Action Committee) is the home entertainment industry’s homegrown charity, and its continuing vigor and success is a testament to the talent and commitment of the many wonderful people in this business. I want to commend EAA co-president David Bowers and the rest of the EAA officers and board for putting on yet another classy and well-attended event.
In the throes of the all-important fourth-quarter season, it is gratifying to see top home entertainment executives take time off to support this cause. While we keep up on Facebook, via email, text or phone, it is always nice to meet in person at such events.
Finally, two veteran video publicists, Vicki Greenleaf and Dorrit Ragosine, announced a new firm last week devoted to helping nonprofits, Social Change Public Relations & Marketing. I’m sure many will benefit from their expertise.
Goodwill was in ample supply on the eve of the holiday season.
The always irreverent and often biting satire “South Park” gave the video rental business a haunting send-up before Halloween.
In the Oct. 24 episode, one of the kids’ fathers, Randy Marsh, buys a Blockbuster Video outlet for “only $10,000,” expecting to make a killing, only to find his customers are literally ghosts from the 1980s, wearing leg warmers and asking for films such as Turner and Hooch. Very quickly, Randy finds his investment evaporating like the spirits of video rental past. Still, he continues to insist that not all areas have the bandwidth for streaming content online as his son Stan streams everything he wants on an iPad while hanging out inside his dad’s Blockbuster store.
Meanwhile, the physical rental market has moved on, but not necessarily to a more profitable future. Bandits target Redbox kiosks to steal the money inside, only to find what amounts to spare change.
The “South Park” writers put their finger on the scary specter of shrinking content value that has been tormenting the studios for years. Netflix’s low-cost streaming and Redbox’s pocket-change rentals combined with tough economic times have sucked value out of content that studios pay big bucks to produce. The studios have been trying to put a stake in that vampire with windows and lawsuits ever since.
But as the saying goes, “If you can’t beat them, join them.” Most recently, Warner — which along with other studios has fought back with the cloud service UltraViolet as a way to inoculate content from low-cost streaming — decided to enlist low-cost disc rental company Redbox in promoting the studios’ preferred version of the digital future.
Whether this alliance of frenemies will help boost the video industry and promote the value of content is obviously not yet known, but it is probably a move in the right direction.
If low-cost services continue to drain the value of the very content they depend on, no one, not even the consumers who enjoy the cheap rentals, will ultimately be well satisfied.
Netflix has officially launched subscription streaming in several Scandinavian countries last week.
It was just the latest international expansion for a company that is looking to grow its way out of its domestic problems, which include competition from Hulu and Amazon. The philosophy seems to be that if Netflix can expand fast enough in the streaming arena, it will outrun all other competitors.
“We remain concerned that Netflix is expanding too quickly internationally with incremental content commitments and mixed results at a time when domestic competition is increasing,” analyst Eric Wold wrote in an Oct. 17 note.
At the same time, Netflix is trying to get into the content creation business, funding original productions such as “Lilyhammer” and “House of Cards.” The story here is that content creators and owners are making them pay too much for content, so why can’t Netflix create its own?
The missing ingredient in Netflix’s plan seems to be focus. Does it want to be an international streaming distributor or a content creator?
Certainly, Reed Hastings has made no secret of the fact that streaming is the company’s focus (even though disc rentals are the major profit center). But, even within the streaming realm, it seems to me that Netflix needs to find a target: distribution dominance both internationally and domestically, or content owner/driver.
Underneath all of Wall Street’s bleating about Netflix being a “broken model” is the question of just which model Netflix wants to follow: omnipresent distributor or content creator. I’m not sure it can be both.
In the end, the label of “first mover” can only get Netflix so far in the streaming business. And its quest to be the next AMC or HBO is up in the air as far as its original programming. The company needs to define itself more clearly, and figure out how to make money at it.
What does Netflix want to be when it grows up? A content distributor or content creator.
While there are many historic and legendary spots in Hollywood, the Warner lot is one of the most iconic. As Warner Bros. sets out to celebrate its 90th anniversary next year, which will occur on April 4, 2013, studio executives last week chronicled the studio’s long history — from its visionaries, the four Warner brothers, to its groundbreaking launch of sound pictures, to its longstanding relationships with and championing of talent such as Clint Eastwood.
The unveiling of the anniversary plans occurred on a studio lot where such legends as Bette Davis once strolled. While film was the original medium that made the Warner lot what it is today, it is mostly likely on disc that many younger fans learned to appreciate the work of Davis, the Warner brothers and numerous other filmmakers, technicians and stars that graced its avenues.
Thus, it is fitting that Warner’s celebration will include the release of numerous — some truly gigantic — disc collections. From The Jazz Singer, which helped launch sound pictures and is being released for the first time on Blu-ray, to James Dean and Best Picture Oscar collections, among other gems, the home entertainment team at Warner will unveil a feast of films on disc in 2013.
In an environment in which “going digital” is pervasive, disc still is the best medium consumers have to own a studio’s memories in permanent, collectible form.
A few years ago at the Consumer Electronics Show in Las Vegas, director Oliver Stone lamented the fact that many consumers are watching films digitally on small screens, in low quality, calling it “depressing” to filmmakers. He urged the audience to watch films on disc. “Go against the grain — collect!” he said.
Luckily, Warner Bros. Home Entertainment Group is making collecting films from its studio library more enticing than ever. The studio has been known for spending millions to restore its library, and has continued to enhance the value of its classic content in preparation for the 90th. Film aficionados no doubt will appreciate the effort and care studio executives have taken for the 90th anniversary for years to come.
George Feltenstein, the veteran video executive and knowledgeable TV and film buff who spearheads the Warner Archive Collection, the studio’s manufacture-on-demand (MOD) arm, calls it a “boutique” operation. But he has some big ideas about how it can help studios adapt to the ever-changing disc business.
Shelf space has been shrinking with the demise of Borders and Circuit City and with the dropping store count at Best Buy, among other brick-and-mortar retail woes. Enter MOD.
The process allows consumers to order the titles they want — many of them, but not all, appealing to a very limited audience — and have them manufactured and delivered a la carte. The process eliminates many of the problems catalog titles face, notably the difficulty of getting noticed or even placed on the shelf among all the blockbusters at big-box retailers and the stigma of unwanted returns to the studio. As Feltenstein puts it, it’s simply a more efficient distribution plan for many catalog titles.
While there are headwinds to overcome, including the cost of music rights for television series, Feltenstein sees a bright future for MOD. It’s a win-win for fans and the studio. “I am an advocate for the fan, but with responsibility to the studio’s bottom line,” he said, noting he connects with fans via social media such as Facebook polls to gauge title demand.
It’s a win in another way as well, as MOD helps preserve studio history that might have been lost. TV veterans, including Patrick Duffy (“The Man From Atlantis”), Ron Ely (“Tarzan”) and Clint Walker (“Cheyenne”), recently appeared at the Paley Center for Media in Beverly Hills, Calif., to tout the series coming out on Warner MOD. Duffy talked about holding his breath without blowing bubbles, Ely about wrestling tigers and lions (really!), and Walker about sinking in freezing faux quicksand to get a shot. These actors reflect a history of Hollywood, and their efforts should be preserved.
Feltenstein recalls a studio memo about a collection of catalog titles years ago: “These films are worthless. We don’t care if they get destroyed.” MOD is testament to the fact that value is in the eye of the beholder.
Recently, my 14-year-old daughter has been obsessed with the movie Donnie Darko, a film that’s nearly as old as she is. She first discovered it via a recommendation from a friend. Since that recommendation, she’s watched it numerous times, and I feel sure, had we not already owned that film, she would be buying it in some form — on DVD, on Blu-ray Disc or via electronic sellthrough of some kind, possibly UltraViolet.
Netflix has been at the forefront of the recommendation engine for films, albeit only for those who want to rent. Amazon, too, offers recommendations and reviews to help customers discover new content. But I think the avenues for marketing films via recommendation have only begun to be tapped.
How do we replicate the experience of having a friend suggest we watch a movie and then convert that experience into not just a one-time rental but into a purchase?
I think rental, perhaps via Netflix, may have a place in this type of marketing. Suppose my daughter had watched Donnie Darko first via Netflix — and soon found she wanted to watch it again and again. I would bet that on the umpteenth viewing she might consider purchasing that title for her Blu-ray Disc or DVD collection, especially to watch in-depth extras.
Just a thought, but might the studios look into writing some sort of marketing prompt into their deals for Netflix. Say on the second or third time one views a title, might not a prompt come up that offers viewers the option to buy that title via EST or disc, with some sort of tease about the extras.
Facebook is another for-the-most-part untapped social marketing tool. Here, the industry needs to proceed cautiously, as many Facebook users are fiercely trying to guard their privacy. But offering Facebook viewers an incentive, perhaps via an entry into a drawing for free stuff, might convince them to recommend films they like.
Like the old Breck commercial (“I tell two friends, and she tells two friends, and so on …”), social media recommendation multiplies. If our business could somehow learn to harness it, sales might multiply as well.
The creative destruction that the Internet has wrought includes the spectacular fall of Best Buy.
While Amazon pushed lowball pricing, in most states boosted by a tax break, Best Buy unwittingly acted as a “showroom” for Amazon. Consumers could check out, test and make queries about products in Best Buy stores that they would ultimately buy on Amazon’s site at a lower price.
This sort of “showrooming” is not a profitable venture for Best Buy. The brick-and-mortar chain does all the work (renting real estate, displaying products, hiring workers, etc.) while Amazon gets the final sale, albeit at a lower margin.
Ultimately, it cannot continue.
Many analysts have been noting that Amazon might buy Best Buy. It seems an advantageous deal to me for both, but particularly for Best Buy. Instead of reaping no advantage whatsoever from lookiloo customers, the physical stores would become part of a retail ecosystem. Amazon’s “showroom” would be supported by the customers that actually buy from Amazon. Unfortunately, should this occur Amazon would lose one of its biggest advantages — drafting off of other retailers who have to charge sales taxes and absorb other costs that Amazon doesn’t.
This Amazon (Internet) advantage may have made sense in the beginning, but now it gives an unfair advantage to virtual retailers that brick-and-mortar retailers have no hope of combating.
I can’t help but draw a comparison to Netflix, which also benefited from the virtual world of movie rentals and movie streaming without having to build infrastructure. While Blockbuster had to maintain locations and pay clerks, Netflix used the existing infrastructure of the federal mail service to reach its customers. Once it collected the monetary advantage that afforded, Netflix drafted off of the bandwidth that others built for its streaming service.
It seems to me the best move is not to buy or own anything concrete, but to take advantage of the brick-and-mortar investments of others. Eventually, however, there may be few actual retailers to act as showrooms for the virtual ones.
While consumers seem to be interested in catching up on episodes of TV shows on Netflix, they are more interested in watching longer movies in higher quality on disc, according to a new report from The NPD Group.
The majority (80%) of Netflix streaming views are of TV shows. Meanwhile, DVD and Blu-ray Disc rentals from kiosks, brick-and-mortar retailers and Netflix accounted for 62% of movie rental orders during the first half of this year.
It seems to me that consumers are opting to watch TV shows — which are shorter and often not as picture- or sound-quality sensitive — via streaming, while opting to see movies — which are better enhanced by sound and video quality and require a longer time commitment — on physical disc. For movies, quality really counts, while for TV shows, it’s not as important.
The report points to one of streaming’s real Achilles heels: Streaming video and audio (especially when viewed on a small screen like a phone) doesn’t offer the quality that movie-viewers often seek.
As a viewer of content, I concur. I can view a less-than-30-minute sitcom on a small screen or in low quality, but if I want to watch a two-hour movie, I’d prefer a high-quality disc.
Certainly, transactional video-on-demand can offer similar movie quality to disc, but for some reason cable and satellite VOD has never really taken off with consumers. I’m not sure whether that is a marketing problem, a customer-relations problem (many folks can’t stand their cable company) or a billing problem (I, for one, am nervous that I will be billed for multiple VOD viewings that will jack up my total). But consumers still prefer to get their high-quality movies on disc.
Content, of course, plays a role. Studios have been reticent to offer new releases on streaming services such as Netflix. My daughter recently stayed with my aunt, who has only Netflix for movie viewing, and bemoaned the quality of content.
Obviously, quality — of content, as well as picture and sound — counts with movie consumers.
Consumer spending on home entertainment is growing despite the economic headwinds, according to the latest first-half numbers from DEG: The Digital Entertainment Group, but home entertainment is a multifaceted business. It encompasses physical rental and sellthrough spending and digital spending on subscriptions and individual title rentals.
Certain sellthrough segments are growing, such as Blu-ray Disc sales and electronic sellthrough (EST), albeit coming off a very low base and boosted by Walmart’s disc-to-digital conversion (those $2 and $5 fees consumers have been paying to get digital copies of their disc libraries).
Meanwhile, subscription (Netflix) and kiosk (Redbox) rentals continue to grow, taking over a market, for the most part, ceded to them by brick-and-mortar stores.
Digital is making strides in both rental and sellthrough, which shows the business is moving into the virtual world on both fronts. It is particularly important that EST is starting to make it off the mat, thanks in large part to the boost from UltraViolet.
Packaged-goods sellthrough — a particularly profitable segment for the studios — is holding up pretty well, down 3.6% in the first half from the same period of 2011. Adding in EST — also a studio priority — sellthrough is down less than 2%. As UltraViolet conversion gains momentum, EST may prove an even bigger boost to the all-important sellthrough business in the future.
While growth in consumer spending on home entertainment is always encouraging, having stability or growth in diverse markets — sellthrough, digital and rental — is key to the overall market’s health. The fact that that’s happening shows consumer spending on home entertainment is on more solid ground.
It has often been said that the entertainment pie grows even as new businesses — from television to VHS to DVD to rental and digital — each take a slice. Recent DEG numbers seem to show that may indeed be the case in the multi-slice home entertainment market.