Tuesday Musings

Sometimes it feels as though the DVD era never happened. We have rental flying high, even though everything now is issued at a sellthrough price, and Amazon, the leading Internet home video merchant, is talking about opening up brick-and-mortar stores. Of course, Amazon's model focuses on grocery pickup centers, but as we all know, one thing leads to another...

Speaking of which, I keep hearing of all these great catalog reissues, campaigns and promotions — from 20th Century Fox's 50th anniversary edition of The Diary of Anne Frank (coming June 16 to both DVD and Blu-ray Disc) to the recent flurry of boxed sets of saucy 1920s and 1930s pictures released before the studios in 1934 began enforcing their restrictive Production Code — and I just can't help wondering why on earth are catalog sales still down? Box office is way up for the year, and I would think home video would be keeping pace. But from what I keep hearing from studio executives, new theatricals are hit or miss, resulting in a wash, while the real category drag is catalog. Maybe our industry, as a whole, needs to do a better job of informing the public of what's out there and why they should own it.

It's funny — I still remember the yearly calls for an industrywide awareness campaign back in the middle 1990s, when VHS was maturing and consumer spending was flattening out. It seems to me our industry could use an awareness campaign now, more than ever — and yet no one's even brought up the concept, much less a realistic game plan. Studio executives, are you listening?

Memorial Day Weekend: Box Office Bonanza

Summit In September!

We’ve gotten a lot of inquiries about our 2009 Home Entertainment Summit, which several weeks ago was moved from its originally slotted location in La Costa, Calif., to Loew’s Santa Monica. Now comes another change. The summit will still take place at Loew’s, a great beachfront hotel close to most of the major studios, but we are pushing it back to late September from its originally scheduled date of June 29. We are doing this because, frankly, this is the home entertainment community’s annual showcase, and right now we don’t have much to showcase other than a weak first quarter and lots of uncertainty over new technologies such as 3-D for the home. 

The new date — and we will announce a specific day within three weeks, pending confirmation of a very special keynote speaker — will bring us to the threshold of the fourth quarter, with the summer theatricals behind us and everyone focused on these big summer movies arriving on DVD and Blu-ray Disc. We also should have a clearer picture on what’s happening with 3-D, which many consider Blu-ray Disc’s potential “killer app.”

In the meantime we are keeping registration open, and the deadline for our annual DVD/Blu-ray Disc Critics Awards remains unchanged. If you need any more info, please contact our show coordinator, John Latchem, at . Here’s the original announcement:

The time has come again. We are now accepting submissions for the DVD Critics Awards, which will be presented June 30 in Los Angeles.

Details of categories and the entry form can be found here.

This year we are accepting submissions by title as opposed to DVD or Blu-ray. So titles that are released on DVD, or on both DVD and Blu-ray at the same time, are eligible for most of the categories. The exception is the High-Def category, which is only for Blu-ray Disc releases.

Only titles released in 2008 are eligible. Please do not submit anything specifically for Best of Show.

If you choose to submit the Blu-ray version of a title, please include at least one copy of the Standard-Def version.
 

'Taken' Takes Top Chart Spots

No surprise, folks — 20th Century Fox Home Entertainment's Taken took the top spot on the home video sales as well as rental charts its first week in stores, blowing away the competition. The film, with a $144.6 million box office pedigree, had sported Titanic-like legs since its early February 2009 theatrical bow. Here's the complete story. My hunch is this film is going to have long legs on home video as well. My oldest son, Justin, has been asking for this film for months; apparently it's not just a hit with adults, but also with the teen set.

Shades of Red

From the get-go, studios never much cared for rental, since there’s no direct benefit to their revenue stream. In the early days of home video the studios even tried to stop rental dealers from renting movies they had purchased. The First Sale Doctrine put an end to that, ushering in an era of grudging acceptance—made more palatable through the introduction of revenue-sharing, which at last gave the studios a bite of the action.
 
These days, the attitude in Hollywood toward rental has taken a decided nosedive. Part of it, no doubt, is the fact that rental is enjoying something of a resurgence due to the down economy, while sales have sunk. But of all the rental dealers out there, perhaps none has raised the ire of the studios so much as Redbox, a once-little company that puts kiosks in retail stores where consumers can rent movies for a dollar a night.
 
Over the last six years Redbox has set up nearly 13,000 kiosks in supermarkets, discount stores, drugstores and restaurants, with plans to open another 7,100 by the end of this year. What has the studios seeing red is not just the low rental rate, which they feel devalues their product, but also the fact that Redbox kiosks have begun popping up at Wal-Mart, the nation’s No. 1 seller of DVD. “It’s cannibalization, pure and simple,” one studio executive told me.
 
Universal Studios Home Entertainment last year began withholding DVDs from Redbox until 45 days after their release to lessen competition with sales and later ordered distributors to cut off supplies. The two parties are now squaring off in court over a lawsuit Redbox has filed against Universal, alleging restraint of trade.
 
Through it all, Redbox has continued to grow. Just this morning, I received word that Redbox has cut a deal with Circle K to expand its kiosks to more locations throughout the convenience store chain’s network. Currently, Redbox kiosks are limited to select Circle K stores in Arizona, California and Ohio.
 
I have mixed feeling about the Redbox phenomenon. I can see how dollar rentals could be perceived as devaluing DVDs in the consumer’s mind, but is this really any more damaging than, say, those ubiquitous $5 dump bins at Wal-Mart? And while I, too, believe there is a risk of cannibalization by having Redbox kiosks, with dollar rentals, inside a Wal-Mart, where movies traditionally have only been sold, isn’t this sort of in keeping with the broad “entertainment emporium” concept we’ve all supported at one point or another? You know, a place where consumers can buy or rent movies and video games and buy music?
 
On the one hand, Redbox certainly satisfies consumer demand. If the demand for dollar rentals at Wal-Mart, McDonald’s, Circle K and elsewhere wasn’t there, Redbox wouldn’t be in a business. And yet our industry can’t rely solely on consumer demand — otherwise, there would be unlimited free downloading, which is what consumers really want, as evidenced by the music industry’s experience with Napster and other illegal file-swapping services a decade ago.
 
These are tough times for the studios, folks. As always, they have to manage distribution and the supply chain. In these turbulent economic times, they also have to manage their own, and their shareholders’, expectations. And now, on top of all that, they have to manage consumer demand.
 
No wonder so many faces in Hollywood are seeing red over Redbox.
 
 

Paris Hilton Sued Over DVD

'Angels' Fly

The much-ballyhooed The Da Vinci Code sequel Angels & Demons opened to an estimated $48 million this weekend to take the three-day crown in box office receipts. It was on the high end of expectations. Paramount's Star Trek came in a close second its sophmore weekend with a gross of $43 million, a drop of just 43% from last weekend's opening. The film's total gross so far is estimated at $147.6 million, which according to our friends at Box Office Mojo makes it the highest-grossing "Star Trek" movie of all time. X-Men Origins: Wolverine came in at No. 3 its third weekend on the big screen, earning $14.8 million to bring its gross to $151.1 million. Ghosts of Girlfriends Past took in $6.9 million to snag the No. 4 spot, while fifth place went to Obsessed, with $4.6 million.

A Little Customer Service, Please

I just got back from Best Buy and I must say I was disappointed on two fronts.

For starters, seven people were waiting in line, and yet only one of 14 checkstands were open. And before a second clerk could be found, I overheard two say to the manager, "I'm off the clock," before a third walked over to a vacant checkstand and turned on the light. The guy ahead of me unceremoniously dropped the two Blu-ray Discs he had been waiting patiently to buy into a candy bin and stormed off.

But wait, it gets better. The $14.99 video game I had come there to buy was rung up as $43 and change. I asked the clerk about the price, telling him it was $14.99. He scanned it again and said, "OK." No apology, nothing.

I know the economy is in trouble and retai is hurting, but let's not throw customer service out the door!

Blu-ray Debate

I had an interesting conversation with an independent DVD/Blu-ray Disc supplier who shall remain nameless. The gentleman opined that Blu-ray Disc has a long, hard road ahead of it, and that the masses just don't care. He cited as an example a title he recently put out on DVD and Blu-ray Disc at the same time, at the same price, with zero premium, and just 5% of total sales came from Blu-ray. "We're in the industry, so of course we have Blu-ray players and watch Blu-ray Discs," he said. "But we have to think of the other people."

Well, it just so happens the title he was referring to was a fitness video for pregnant moms. I pointed out this was hardly the demographic Blu-ray Disc marketers are targeting, and that 5% was actually pretty good. "But that's my point," he said. "Blu-ray is not yet at the masses, and it's been nearly three years since the format came out."

I pointed out that a good chunk of my non-work circle does, in fact, now have a Blu-ray Disc player, including a) a painting contractor who coaches my oldest son's baseball team; 2) a young woman who sells ads for print publications; 3) a ski shop clerk up in Big Bear; and 4) Richard, my plumber. None of these people are what you would call an early adopter, and the fact that they all bought Blu-ray players when their DVD players went kaput certainly says something about the format's future reach.

I also noted a recent blog posting of mine about a study that indicate Blu-ray Disc players are enjoying quite a sales boom, despite the down economy (you can read it by clicking here).

He seemed unconvinced, although I added up all my points and felt even better about Blu-ray Disc than I had before.

To add to everyone's optimism about Blu-ray, let's take a look at the latest Nielsen VideoScan charts that break down the percentage of a title's buy by format. We see titles like Quantum of Solace (26%) and Transformers (17%), and I'm thinking, Blu-ray is responsible for a significant percentage of those titles' total sales.  Then again, those two titles are tailor-made for the early adopter, the young adult male who likes lots of action and lots of special effects.

But if you look further down the chart you'll see that some pretty atypical titles also are picking up some Blu-ray traction. Just last week, The Curious Case of Benjamin Button generated 14% of its sales from Blu-ray. We're talking a drama here, and one that stars Brad Pitt, with high appeal among women viewers. Then you've got Frost/Nixon, which I would imagine skews toward older viewers, with a 10% Blu-ray share. Even Bride Wars, a chick flick if there ever was one, generated 6% of its sales from Blu-ray.

Those are decent percentages, dear readers--and a far cry from just this past holiday season, when an across-the-board percentage of about 3% was the norm.

Blu-ray's got momentum, folks. The evidence just keeps piling up.

A Big Hit for Pitt

Yes, dramas do sometimes sell--and rent! Paramount Home Entertainment's The Curious Case of Benjamin Button was an easy victor on all three DVD/Blu-ray Disc charts its first week in stores, coasting to No. 1 and beating the competition by a longshot. For the complete story click here.