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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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29 Jun, 2009

Just What Exactly Is Wal-Mart Doing?

I wanted to share with you some tidbits, thoughts and observations as the week gets underway, three-dot style ...
I get it now why studios are in a tizzy over kiosks that rent DVDs for a buck. For starters, from what I understand, there are no revenue-sharing deals between any studios and Redbox, the largest supplier of kiosks. Secondly, speculation that rental and, in particular, kiosks are cannibalizing sellthrough is perfect understandable, given than so many Redbox kiosks are now in Wal-Mart stores. I went to the local Wal-Mart on Saturday to get some gear for a trout-fishing trip the next day and saw a line of people waiting to rent a DVD from the Redbox kiosk. Meanwhile, at the sales counter, the only activity was around the DVD dump bin, where movies had been cut to two for $10 (from $7.50)....
Speaking of Wal-Mart, the big chain's supposed efforts on behalf of Blu-ray Disc are laughable. Blu-ray is still locked up in an endcap display case, virtually invisible to casual passers-by. Come on, Wal-Mart. You have as much at stake in the success of Blu-ray Disc as any of us do, so why not give it a little more of a push? At least dedicate a row of regular shelving to Blu-ray Disc — just don't hide it away behind lock and key. This approach might work for video games, but gamers have come to expect it. Movie buyers want to browse; they want to feel and touch the merchandise. Wal-Mart didn't lock up DVD in the early stages of that business, so why do so now?
Congratulations to Eisuke Tsuyuzaki on his promotion to chief technology officer at Panasonic Corp. of North America (click here to read our full story). Eisuke was previously managing director of Panasonic Hollywood Laboratory, where he led Panasonic's charge into first Blu-ray Disc and now 3D. He's an amazing guy who truly becamse the CE community's point person in their efforts to promote Blu-ray Disc in tandem with the studios, and we just hope there's a little Eisuke waiting in the wings to carry on his fine work.


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25 Jun, 2009

Harris Interactive Survey Gets Slammed

I thought I would pass on an email I just received from Corporate Advocates about a recent survey on high-definition packaged media. It reads as follows:
As you may have seen, there has been some recent reporting on the results of a Harris Interactive survey that arrived at some highly questionable findings on the number of Blu-ray Disc and HD DVD players currently in US households.  By way of background, the recent Harris Interactive poll asked consumers whether they owned an HD DVD player, a Blu-ray Disc player, a PS3, etc.  The survey has garnered some media attention despite the fact that, according to analyst groups that regularly track Blu-ray Disc hardware sales (as well as HD DVD sales before the format was pulled from the market), the survey results don't square with the actual shipping and sales numbers.
Given the grossly inaccurate results with respect to HD DVD sales (many times greater than those previously reported by the HD DVD group itself), and given that the sales-based numbers and the dramatic increase in Blu-ray Disc hardware and software sales clearly indicate that the format has in fact reached critical mass (surpassing even DVD penetration at the same point in DVD's lifespan), we thought it important to take a moment to provide you with actual data based on manufacturers' shipments and retail sales.
The 2008 sales data and the latest 2009 projections from Adams Media Research are as follows:

    * As of December 31, 2008, 2.7% of US TV homes had a Blu-ray Disc set top player, and by the end of 2009 that number will have grown to 6.2% of US TV homes (6.1% and 11.0%, respectively, of HDTV homes)
    * As of December 31, 2008, 5.6% of US TV homes had a PS3, and by the end of 2009 that number will have grown to 10.0% of US homes (12.5% and 17.6%, respectively, of HDTV homes).
    * As of December 31, 2008 7.8% of US TV homes had either a Blu-ray Disc set top player, a PS3 or both, and by the end of 2009 that number will have grown to 14.8% of US TV homes (17.5% and 26%, respectively, of HDTV homes).
    * As of December 31, 2008 0.3% of US TV homes had an HD DVD set top player, and by the end of 2009, that number will have shrunk to 0.2% of US homes (0.7% and 0.4%, respectively, of HDTV homes).

The estimates reported by Adams Media Research are based on its research into actual manufacturer shipments to retail and actual retail sales to consumers, and are significantly different than the survey-based numbers reported by Harris.  In fact, the Harris numbers don't even square with the numbers reported by the HD DVD Promotions Group toward the end of that format's lifespan.  As of the end of 2007, some 50 days before the announcement that the HD DVD format would be discontinued, the HD DVD Promotions Group was reporting set top sales of less than 1 million units….nowhere near the 9% of households that Harris claims based on its survey results.
As for the discrepancy between the survey results and the actual data, Tom Adams, president of Adams Media Research notes:

"The media industry has long known you can't trust the average survey respondent to correctly identify the high-tech devices in their homes; this finding suggesting that HD DVD player penetration grew from 6% to 9% in the period since the Blu-ray victory in the format war simply can't be right. Our research on shipments and retail sales of players suggests that some 340,000 homes had an HD-DVD player by the end of 2008 v. 3.1 million homes with a dedicated Blu-ray player, and 9 million homes with either a dedicated player, a PS3 or both. So far, despite the recession, sales this year put dedicated  Blu-ray players on track to be in 7.2 million homes by year's end, with the number of homes having a BD-Player, a PS3, or both growing to 17.1 million. Meanwhile, HD DVD machines are long gone from store shelves and household penetration is shrinking dramatically. By way of comparison to what had been the most successful format launch in consumer electronics history, at the same point in DVD’s lifespan (four years in, at the end of 2000), DVD-enabled homes (set-tops or game machines) numbered 13.7 million”

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25 Jun, 2009

The More the Merrier

Reaction in Hollywood is mixed to the move by the Academy of Motion Picture Arts and Sciences to broaden the field of best picture nominees from five to 10, but I for one am a strong proponent of this — and everyone else in home entertainment should be, as well. We've all written about the "Oscar lift" that sees consumer interest in Oscar-nominated titles soar once the nominations are announced, particularly those getting a nod for the most coveted of all the awards, best picture. Lots of people out there want to see all the nominated films before the winner is announced — and each year at least some of the nominated films are already out on DVD/Blu-ray Disc when the noms roll out. See my point?
That's the commercial T.K. From an artistic standpoint, I also believe it's a good thing, since best picture nominees typically hog the spotlight and all the Academy is doing is casting the spotlight on a wider assortment of films that otherwise might have been overlooked. Academy members, after all, typically don't vote by box office. They do tend to choose quality films, for the most part. Now, they just get to pick more of them.


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24 Jun, 2009

Toshiba to Go Blu?

Interesting buzz today about Toshiba potentially going Blu-ray. Apparently outgoing Toshiba president Atsutoshi Nishida, in a company shareholder meeting, said the Japanese consumer electronics giant may finally have a change of heart regarding the victorious high-definition optical disc format.
"It makes no sense to decide not to enter the Blu-ray market simply because we lost the DVD format war," he is reported to have said. "We cannot change the fact that we lost." (Check out our story by Erik Gruenwedel by clicking here.)
If true, it's about time! I've always felt Toshiba was acting irrationally by refusing to go Blu after the bitter defeat of its HD DVD format in January 2008. I hate cliches, but this truly was a case of cutting off one's nose to spite the face. Toshiba is a great company — all my DVD players have been Toshiba — and the company probably lost a lot of momentum, and business, by sitting on the sidelines while Sony, Panasonic, Pioneer and others were busy producing Blu-ray Disc players, especially since Toshiba's first course of action was to rev up its DVD "upconverters," a silly ploy that only made it look foolish and petty. "The other high-def format won and ours lost, so you know what? Maybe we don't need any high-def format! DVD is just fine! Take that, Blu-ray!"
Until last year, I've always considered Toshiba a first-class CE company. Let's hope Toshiba does the right thing and starts producing Blu-ray Disc players, like just about everyone else.


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22 Jun, 2009

Gardening or Gaming--Gee, That's a Tough Choice...

Stop the presses! Monday begins with the earth-shattering announcement from the Pew Internet & American Life Project that a new study shows that 97% of all teens between the ages of 12 and 17 play video games. Gee, who would have thought....

What I find interesting, though, is that while the study says 90% of gamer parents know what they're kids are playing, just 13% believe that video games have a negative influence on their children's behavior.

I'm definitely in that 90%--my oldest son, 13-year-old Justin, loves Call of Duty, while the two younger boys, 11-year-old Conner and 7-year-old Hunter, like Wii Fitness and anything SpongeBob--but I'm not quite in the majority who believe there are no negative ramifications. The principal of my sons' school, Denise Coates, has an interesting view that makes more and more sense the more I think about it. The problem with video games, as she sees it, is that the only way to gain something--to win a prize, gold coins, advance in the game, you name it--is by hurting someone else. This can be as benign as SpongeBob zapping some strange sea creatures, or as realistic as the Call of Duty soldiers lobbing a grenade into an enemy encampment. In any event, it doesn't exactly send a good message to our children.

I ran this by another parent and she nodded in agreement, but then added, "I don't know what's worse, though--when we were kids we didn't blow each other up in video games, we shot each other with toy guns."

She's got a point, but I can't help but feel too much exposure to violence does tend to desensitize kids. I'm not for censorship of any fashion, mind you--just some parental control. And that's the approach I am taking. I'm not banning my kids from video games, but I am limiting their time in front of the screen and encouraging them to read, ride their bikes, play in the pool, etc. And when I'm home, I make sure we engage in some form of physical activity, from going to the beach and swimming, surfing or paddle-boarding to hiking, biking and kayaking. I'm also taking the boys to museums, to the zoo, to the harbor--anywhere that's part of the real world, not the virtual one.

And you know what? All this extra exercise and mental stimulation--heck, we even drove up to the Ronald Reagan Library and Museum a few weeks ago--is making me feel better, as well, both physically and mentally. Why, the other day I even let a little old lady merge into my lane instead of speeding up and honking had she tried to cut in.

I wonder if the boys would like to try gardening?

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19 Jun, 2009

Digital Delivery Not All It's Cracked Up To Be

Analysts, for some unknown reason, might still love downloads over packaged media. But what's known in the biz as "EST," for "electronic sellthrough," has been getting quite a bum rap of late, chiefly because consumers don't seem to want to spend $20 or even $12.99 for a downloaded movie when they can get the real thing for about the same, or even less.
There's a great column in Electronic House by Arlen Schweiger called "Blu-ray vs. Digital Downloads: Tale of the Tape."  Arlen makes a compelling case for why he believes Blu-ray Disc, as the new standard-bearer for packaged media, will prevail. He notes the quality is unsurpassed, while "pickings are slim if you're searching for HD downloads in 1080p." The same goes for audio quality, extras and even content availability, when you factor in DVD (and you should, since all Blu-ray players are backwards compatible).
And while a certain segment of the population certainly will be drawn to the ease and convenience of digital delivery (chiefly on the rental side, however), "for dedicated home theater/projection system owners, who realize the quality difference between Blu-ray and everything else, it's a no-brainer."
And my point earlier about analysts loving downloads may be eroding quicker than we think. Our senior editor, Erik Gruenwedel, wrote a great story (click here to see it on our Web site) titled "Show Me the Money: Analysts Sour on Streaming." He noted that while analysts by and large are still "enamored by the promise of streaming," a growing number of them now 'contend a Pandora’s box scenario is emerging that could result in revenue and margins that pale in comparison to the traditional business models.... Laura Martin, analyst with Soleil Media Metrics, said the rush to migrate professionally produced TV content on the Internet for free could turn out to be 'anti-consumer,' 'anti-media' and even 'anti-America'."
Food for thought, eh?


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17 Jun, 2009

'Gran Torino' Wins Triple Crown

Warner Home Video's Gran Torino, fresh off a $148 million box office rally, topped all three DVD/Blu-ray Disc charts its first week in stores: the Nielsen VideoScan First Alert sales chart, Home Media Magazine's video rental chart and the Nielsen VideoScan Blu-ray Disc sales chart. For the full story, click here.

For Blu-ray Disc watchers, here's some additional information not in the chart story: Of Gran Torino's total sales, 14% of all units sold were on Blu-ray Disc. For second-ranked The International, from Sony Pictures Home Entertainment, the ratio is higher, at 20%.

Warner's 40th anniversary edition of Woodstock, which debuted at No. 7 on the sales chart, generated 21% of its total unit sales from Blu-ray Disc.

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16 Jun, 2009

Catalog Resurgence?

One of the most common refrains in home entertainment circles is that among our industry's many maladies is a dramatic slump in catalog sales. It's been going on for several years in the DVD arena, and has been attributed largely to the fact that most so-called "saleable" older movies were released on DVD years ago, so for the typical collector there's nothing left to buy. The sagging economy has only made matters worse, and now we're seeing valiant efforts by studios to release classic films on Blu-ray Disc also met with consumer indifference.

And make no mistake: studios are cranking out an admirable stream of great old movies on Blu-ray Disc, from How the West Was Won and Woodstock to more contemporary classics such as The ShiningForrest Gump and Ghostbusters.

Sales, so far, have been marginal, but I sincerely believe we're in for a turnaround, and here's why.

There's the quality issue — do old movies really look better in high-definition? — that has led to some hesitation among Blu-ray owners, but that's becoming less and less of a factor, as the consensus is a resounding "Yes." Check out some of the forums and chat groups — there's a growing chorus of fans who say just about any old movie looks better on Blu-ray, simply because old movies were shot on film, which has a higher resolution than even modern HD cameras.

As one recent post said: "Basically you can get the catalog films that have been released on BD with no worry. It'll look as good if not better than when you or your parent/s saw it in theaters."

With the quality issue settled, then, it becomes more a question of need — and whether or not that need supersedes our growing propensity to pinch pennies.

Ultimately, it will. I have a friend who pulled out a copy of Monster, to watch again. The case, he said, has gotten shabby (my friend's DVD collection was moved several times and spent a few months in the garage during a family room remodel) and the disc has several scratches. It still plays OK, but he likes the movie so much he doesn't want to risk future disappointment and wants to buy a new copy. His first question to me: "Is it available on Blu-ray?" I told him it's coming out on Blu-ray Sept. 1 and he was ecstatic, saying he'll surely pick it up.

Another friend, who loves uniformity, now has several dozen Blu-ray Discs sprinkled among a library of some 1,000 movies. "When I put a Blu-ray Disc back on the shelf and pull out a DVD, it feels like a VHS cassette," he said. "Blu-ray looks better on the screen, but it also looks better on the shelf."

Let's all keep our fingers crossed my scenario holds true. Our business could use some good news.

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10 Jun, 2009

Inside the Charts

Warner Home Video's He's Just Not That Into You swept the national home video sales and rental charts its first week in stores, in large part because it was the only big theatrical title to arrive in stores the week ending June 7. You can read the full story by clicking here. But you didn't come here just for the traditional 220-word chart story, did you? You came for a more thorough inspection of the weekly sales and rental charts, and that, dear reader, is what you shall receive, in the form of eight points of interest.

1. Of the Nielsen VideoScan First Alert for the week ending June 7, six of the top 20 sellers are new releases. Of the holdovers, two have been on the chart for three months: Summit Entertainment's Twilight, which actually rose to No. 10 from No. 13 the previous week, and Walt Disney Home Entertainment's Bolt (No. 19 this week, No. 9 last week).

2. Lionsgate's season four set of "Weeds," the week's top-selling TV release, generated a healthy 17% of its total sales from the Blu-ray Disc edition.

3. Defiance was the top-selling Blu-ray Disc for the week, followed closely by Final Fantasy 7: Advent Children, which sold 87% as many copies as Defiance. That's significant, our market research director, Kelly Burner, tells me, because Final Fantasy appeals to a niche anime/video game fan demographic and has been out on DVD for more than a year.(This information didn't make it into the regular chart story because the data was late this week.) In fact, Blu-ray sales were so strong that they propelled Final Fantasy back into the overall top 20 sellers list (it was No. 17).

4. The top-selling title so far this year continues to be Twilight, by far. The year's No. 2 seller, Bolt, and No. 3 seller, 20th Century Fox's Marley & Me, sold fewer copies, combined, than Twilight did on its own.

5. The theatrical catalog market can't seem to shake its doldrums. Recent catalog releases just aren't showing up in the First Alert top 20, and even if you dig deeper, you'll find Blu-ray Disc fans aren't rushing out and replacing their libraries. Two catalog titles that are bubbling under the top 20, Seven and Dodgeball, aren't even available on Blu-ray Disc.

6. Only three new releases made it into Home Media Magazine's top 50 rental list for the week ending June 7, which shows you that the rental business, which used to be home to all sorts of adventurous home video explorers, is now largely a matter of convenience and is as hit-driven as sellthrough, if not more.

7. Rental customers also don't mind waiting. After three weeks, Paul Blart: Mall Cop is still the country's No. 3 rental, and the falloff between this week and last week is just 18%.

8. Even though it's a classic sellthrough title, the 20th Century Fox family film Marley & Me is still among the nation's top 20 rentals more than two months after its release. Indeed, it's tied for 20th place with Sony Pictures' Seven Pounds, released the same day but a much more typical rental title.


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9 Jun, 2009

Psst! I've Got A Secret....

Check back at the Home Media Magazine Web site promptly at 7 tonight (that's Pacific Time) for a major Blu-ray Disc catalog title announcement. I promised the studio I wouldn't give any hints, but believe me this is one we've all been waiting for!

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