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.
Purists will say that ideally every Oscar-lauded title should be seen in the theater, and I understand that sentiment. Sitting in the middle seat of a packed theater offers an experience that is truly unique.
But that ideal experience doesn’t always occur. Often, arriving late to a packed theater I have to squeeze into a seat way up front or way at the back. Perhaps the focus is off or there is a screaming baby in the theater. If you arrive early, you often are forced to sit through numerous commercials. In short, the theater experience isn’t always the ideal that filmmakers, who are often treated to private screenings, extoll.
At the Oscars this year, the Academy of Motion Pictures Arts and Sciences made a point of touting the virtues of going out to the movies. Ushers handed out popcorn and other goodies to the theater audience at the ceremony, a nostalgic nod to the movie-going experience of yesteryear. It only made me recall that the last time I got popcorn, I had to wait in line at the refreshment counter and pay $4 for a snack that cost the theater pennies.
I can’t exactly blame the Academy for romanticizing the movie experience. That’s sort of its job. But I do think the home viewing experience has an important place in exposing consumers to these critically acclaimed films.
Last year’s best picture winner, The King’s Speech, wasn’t easily accessible to my mother after the ceremony. She couldn’t find it playing theatrically anywhere near her Texas town, and she asked me when the disc was due. I told her it would be weeks away. A few years ago, I tried to see Frost/Nixon, another Oscar-lauded film, but could only find it at one theater in my area in Orange County, Calif. This disc wasn’t yet available.
While it’s great that this year’s Academy Award juggernaut and best picture winner The Artist, may be opening up to more theatrical screens, I wish it were available immediately on the home screen.
The Oscar ceremony’s marketing push lasts only so long, and disc often is the best medium to capture that fever.
We can thank a glittering vampire for injecting some new vigor into the sellthrough business. The latest “Twilight” movie, Breaking Dawn — Part 1, sold 5 million disc units in its first 11 days of release, according to Summit Entertainment, which is owned by Lionsgate. The studio last week announced disc sales of the title are about 13% ahead of sales of the third film in the franchise, The Twilight Saga: Eclipse, at the same point in its release.
Breaking Dawn — Part 1 helped push overall disc sales revenue for the week up almost 20% from the same week the previous year, according to Home Media Magazine research. The last up period was the week ended Nov. 12, which included the debut of another juggernaut, Harry Potter and the Deathly Hallows — Part 2. The lesson: Consumers continue to collect the big hits in large numbers and are interested in owning them on disc.
Meanwhile, the cloud-based digital storage platform backed by five of the six major studios continues to add consumers (see story, cover). Consumers have redeemed UltraViolet digital rights to more than 1 million title copies, according to research firm IHS, with 50,000 new accounts opened since early January.
“One million [UV titles] may not sound like much compared to the 504 million movie discs sold in 2011,” said Tom Adams, analyst at IHS. “However, we have projected that only 19 million digital film files were sold during the entire year of 2011 by electronic sellthrough (EST) vendors like iTunes, Xbox Live and Vudu. This suggests that if UV can continue to gain momentum this year, it could encourage consumers to buy more movies.”
Also, considering the small number of films offering UltraViolet at the moment, it seems use of the service cannot help but pick up speed. I know UltraViolet has come up against a wave of criticism from consumers and industry observers, but the fact that it is gaining accounts in spite of that criticism is a very good sign — and an indication that consumers want to own, not just rent, content digitally. Where EST has faltered, UltraViolet may succeed.
Ownership is staging a comeback.
When we first moved into our house, there were two Blockbuster Video stores and a Hollywood Video within about a mile. A few years later, I heard about neighbors waiting to get movies in their queue at Netflix. I noted to these neighbors that they could easily get what they wanted at the local rental store (either Blockbuster or Hollywood). But they all were content to wait in the queue (after all, the price couldn’t be beaten). First one Blockbuster closed, then the Hollywood, then the other Blockbuster.
Then I noticed the stream of people waiting in line at the local grocery store to rent a movie from Redbox (at that time $1 a day). It was a different kind of queue, but one that seemed to be making inroads in its battle with Netflix.
The studios soon took notice and slapped windows on the kiosk company and subscriber rental service Netflix, both of which were charging what the studios considered too small a sum for content. Lawsuits were filed, they made up, and we got a window. But it wasn’t big enough for Warner, which in January announced a 56-day window (widened from 28) for rental companies such as Netflix and Redbox. Netflix agreed, as it continued its laser focus on streaming content from a vast library of (albeit older) licensed TV shows and movies.
But Redbox said (to quote a popular film), “Bring it on.”
And here we stand: Once again in a window war. But this time, Redbox is definitely bigger and probably wiser. According to The NPD Group, the kiosk vendor’s share of the disc rental business rose from 25% in 2010 to 37% in 2011. Meanwhile, Blockbuster’s and Netflix’s share of the disc rental business receded. Just this month, Blockbuster parent Dish Network announced it was closing more of the chain’s stores than originally planned.
Redbox says it will work around the window by obtaining its discs through “alternative means,” according to an executive. Even so, with more than a third of the rental market, and as the only disc rental business in my town, I believe consumers will wait in that queue to get their second or third choice, if No. 1 is unavailable.
At this month’s International Consumer Electronics Show, we got a clearer picture of the support behind UltraViolet, the cloud-based digital copy platform backed by five of the six major studios.
At least one retailer, Amazon, is on board with the concept, as well as consumer electronics companies Samsung and Panasonic. Also, 750,000 households have opened accounts in the first three months of launch.
We also got an idea of the outliers, namely Disney, which has not yet joined the UltraViolet bandwagon and is touting its own yet-to-be-clarified (if it ever will be) All Access concept, and Netflix, which has put all its eggs in the rental streaming basket and reportedly has left the Digital Entertainment Content Ecosystem (DECE), the cross-industry consortium behind UltraViolet. Rental isn’t the aim of UltraViolet, as the studio representatives on the CES panel seemed to stress by their continued focus on its sellthrough possibilities.
Also, if you happened by Samsung’s “Disc to Digital” demo on the show floor, there were hints about future revenue possibilities from UltraViolet. Samsung’s demo included the possibility to charge for upgrading a DVD-quality copy to high-definition, or charging for the upload of library discs into the cloud. Will studios charge consumers a nominal fee to upload their existing disc libraries into UltraViolet? What will that fee be? What fee would consumers swallow for getting a digital version of discs they already own?
While DECE made a significant step forward with its CES press conference — making this editor at least a little more comfortable about the future — it can’t stop there. There needs to be a continuous drumbeat of information about UltraViolet — all communication lines need to be open, lest the studios repeat the debacle they are facing with the piracy bills in Congress (see story, cover). When my daughter (13), who wants to be a writer, is on the side of the pirates, the studios haven’t gotten their message across.
A concerted and sustained consumer campaign about UltraViolet — and the antipiracy bills in Congress — is in order, and the studios better make it quick.
In between line-dancing and two-stepping at Billy Bob’s in Fort Worth, Texas, and eating various casseroles cooked up by my aunts over the holidays, we watched movies, as no doubt many families did this holiday season.
While many may have streamed their favorites via Netflix or some other service, my family watched films on disc.
We watched one of my favorites, Meet Me in St. Louis, as well as It’s a Wonderful Life, among other old classics. “Ma and Pa Kettle” films made an appearance, as they are a favorite of my mother’s.
Growing up, we watched classics such as The Wizard of Oz, which happened to be broadcast during the holidays, but these days families have more choices afforded them by disc and other services.
Today, we can watch The Wizard of Oz in all its restored glory on Blu-ray Disc, which is a far cry from the grainy, blurry version broadcast in previous years.
Meet Me in St. Louis, too, has been cleaned up and polished for Blu-ray by Warner Home Video, offering a wonderful experience of that film, which includes Judy Garland’s unforgettable rendition of “Have Yourself a Merry Little Christmas.”
While viewing such a classic in any form is a treat, seeing the film restored and presented on Blu-ray is especially rewarding, allowing the family to experience it without the graininess and blurriness that could mar the experience.
The restored Blu-ray version helped my kids, 13 and 9, see the film as it was meant to be viewed, and allowed them to appreciate a nearly 70-year-old masterpiece even though they live in a world far removed.
It has now become one of their favorite films, and I’m sure we will be watching it again next holiday season.
While grainy YouTube videos and streaming may be garnering attention at the moment, I want to hail the quality experience of Blu-ray Disc. A quality restoration on Blu-ray is a great tool in introducing new generations to old classics, allowing the films to truly shine despite their age.
A few years ago, I made predictions about what would happen in the home entertainment business based on past experience. But, as have the past few years, 2011 has proved hard to fathom.
Who could have predicted the spectacular fall of Net-flix from Wall Street darling and cutting-edge digital delivery visionary to its present status in the financial pundits’ doghouse? Heck, CEO Reed Hastings — who just months before had been the subject of glowing profiles — was counted by some among the worst chief executives of the year for mishandling a price increase and upsetting subscribers with an ill-conceived (and quickly rescinded) split of the company into streaming and disc businesses. Who would have predicted an analyst would call Netflix a “broken model” for the future of home entertainment?
And what of Redbox’s much-telegraphed move into the digital realm? There’s a lot of telegraphing (i.e. a rumored deal with Verizon) but not much action.
About the only thing that has been true to form is the studios’ reaction to the devaluation of content via cheap rentals. Content owners have fought back, and, as evidenced by Netflix’s fall from grace as it had to raise prices to pay for content, have succeeded in reasserting that content is king.
Meanwhile, sales of Blu-ray Disc have continued to grow, despite the headwinds of a terrible economy and competition from digital delivery and its star predecessor, DVD. As an indicator of the format’s reach, my dad, who was happy with VHS, has asked for a Blu-ray player for the holidays.
We gave this year’s analysis headline a question mark at the end, and that about sums up 2011. There are a lot of questions about the future direction of the business.
In addition to the developments at Netflix and Redbox, this year saw the launch of the UltraViolet cloud service, supported by several of the studios, whereby consumers can buy a disc and access a digital copy online. It seems very much a work in progress, but a promising one. Indications are that at the International Consumer Electronics Show in January, we’ll get more details.
But, as for 2011, it’s remained unpredictable.
What a spectacular fall the industry has seen in the past few months with Netflix. Once the darling of Wall Street, the company is now turning into a cautionary tale. Once a shining example of the new world of all-you-can-eat streaming entertainment delivery, the company has now been termed a ‘broken’ model.
“In our view, the company’s business model was broken when it raised prices [in September] for its hybrid [disc and streaming] customers,” Wedbush Securities analyst Michael Pachter wrote in a note, as he downgraded the stock.
Wow. The change in Netflix’s fortunes could give you whiplash.
Recently, I wrote about the ownership model that had dominated our business with the advent of DVD. As I said, ownership is a very efficient way to get consumers the movies they want — without making them pay for a bunch of titles (via licensing deals with Netflix) that they don’t ever want to see. As long as consumers can access those titles they buy, not only on their big-screen TV via Blu-ray disc, but on any device they want — perhaps via the newfangled UltraViolet cloud-based locker — the ownership model seems to be the most viable way to serve the consumer.
When I like a song, I own it, and I play it for friends so that they, too, can appreciate it. The same holds true for a movie. When I like a film, I would like to own it, both on disc and in the cloud, so that I can show it to friends that they may also appreciate it and perhaps buy it themselves.
This only works in the subscription model if Netflix offers ALL the movies and TV shows that I like — and that all of their subscribers like. Frankly, there isn’t enough money in the world to satisfy that constituency. Netflix can try to satisfy enough subscribers to keep them just happy enough not to quit the service, but the content owners soon will squeeze Netflix to the point where even that is not possible.
I don’t envy the Netflix team as they try to make the subscription model pay dividends. Pleasing everybody may prove impossible.
What a whirlwind week it was with, first, Warner Bros.’s Veterans Day weekend gala celebration of the release of the final disc in the “Harry Potter” series at the Wizarding World of Harry Potter park at Universal Studios in Orlando, Fla. Then Nov. 14 came the annual Entertainment AIDS Alliance Visionary Awards at the Beverly Hilton, and Nov. 15 our annual Women in Home Entertainment luncheon at the Beverly Wilshire, both in Beverly Hills, Calif.
Warner pulled out all the stops for the release of the final disc in the “Harry Potter” series, Harry Potter and the Deathly Hallows — Part 2. It was a wonderful coda to a franchise that has spanned the eras of VHS, DVD, Blu-ray Disc and, now, UltraViolet, the industry’s new digital copy in the cloud format, which the “Potter” stars dutifully promoted.
The EAA’s Visionary dinner drew such stars as honoree Pam Grier and presenters Jennifer Beals and Steve Carell. Producer and honoree Steve Tisch gave a moving speech about the ravages of AIDS.
The women at our Women in Home Entertainment luncheon were such an accomplished lot that I am still awed.
B.A.s, M.B.A.s, J.D.s, Fulbright Award winners, speaking multiple languages — I am truly awed by the women in this industry. I bow to your awesome accomplishments. At one point, during our editing of the Women in Home Entertainment section, I had a kind of brain freeze on accomplishments. You are geniuses. And don’t ever forget it. As a mother of two girls, I applaud your groundbreaking achievements!
I know that it has been a hard year in this industry, as it has been for most. But I think this industry has the best minds on tap — and not just the women — to lead us into the home entertainment future.
Whatever may come, remember content is king. And good content will always win out. Great people also rise to the top. And after this week, I’m sure our industry has the greatest people around.
The only thing that’s constant in the video rental business is change, and in the past few weeks that change has accelerated again.
While low-price leaders Redbox, Blockbuster Express and Netflix have begun to raise prices, Blockbuster is taking a page from the Netflix playbook and offering an in-store subscription program.
Dubbed Blockbuster Movie Combo, the new sub program allows users to rent one movie (DVD or Blu-ray Disc) or video game at a time in store with the option to order one by-mail rental per month with no due dates for $7.49 for the first month and $14.99 a month thereafter.
Meanwhile, the much-publicized and much-maligned Netflix price jump (for those who want both to rent physical discs and stream) has given kiosk companies Redbox and Blockbuster Express cover to raise their prices as well.
Redbox is upping its DVD rental price to $1.20 a night, from $1 (Blu-rays rentals are still $1.50 a night, and games, $2). Blockbuster Express has taken a slightly different tack, making new releases, many of which are not available at Redbox, $3 for the first night, with the older titles costing less and Blu-ray titles rented at a $1 a night premium on the DVD price.
Finally, rental dealers have stopped devaluing content, which should please their studio suppliers. No longer, thanks to windows and increased pricing, will a customer see the same new release sold for $16 or more at Walmart available for rent for $1 at a Redbox kiosk. With the new pricing structure from Blockbuster Express, customers will again begin to associate new-release rentals with a higher value. Over at Netflix, streaming isn’t just a value-added freebie; it has a cost associated with it.
While the studios have not always embraced the rental business, recent pricing changes are certain to cheer executives who have tried to stave off the devaluation of their home entertainment product — and of content in general. That, along with the stabilization of the business as evidenced by the Q3 numbers from DEG: The Digital Entertainment Group, should make for a merrier holidays.
UltraViolet, All Access, iCloud — the cloud storage future is finally beginning to take shape for movie and TV content, but that future is still, pardon the term, cloudy.
I still haven’t seen the kind of plans envisioned when the industry was first discussing Blu-ray Disc. Even in the early days of the high-definition format, there was talk of offering a digital copy that consumers could unlock after they purchased a disc — that they could easily access and use at their leisure on many different devices. We got something like that in the digital copy discs included with most releases, but it seemed a stop-gap, clunky measure until the industry could somehow store consumers’ electronic copies in the cloud. Many digital copies weren’t compatible with Apple devices or were only compatible with Apple devices. How copies were downloaded, how many devices they worked on — all of that changed from disc to disc.
Unfortunately, the movement into the cloud doesn’t seem like it is going to be any simpler. Warner has employed Flixster to launch its first UltraViolet titles for better “everywhere” access. Apps and hardware to more seamlessly launch the service are a work in progress. One plus is UltraViolet’s broad studio support, save Disney.
The Disney Studio All Access concept is still just that — a concept. Details on the service are slim and the launch date is murky (if it ever launches). With Apple’s connection to Disney, I wouldn’t be surprised if Disney goes with iCloud in the end. But where will that leave viewers who want the superior quality of disc as well as digital copies for portability?
Apple’s rumored iCloud service looks like it will chuck discs altogether, offering only a digital copy in the cloud unconnected to a disc purchase. Digital copies are nice for mobile phones and laptops, but nothing surpasses the kind of in-home experience that Blu-ray Disc can offer. I’m not sure iCloud will fully satisfy consumers’ desire for home theater-quality viewing, or the 3D experience that Blu-ray can offer.
If UltraViolet can shine in the cloud, it just might be the answer the industry is looking for, but seeing through the cloud is still murky.