Bluebirds of happiness were alighting at distributor Fox and creator Blue Sky Studios this week, as Rio 2 flew to the No. 1 spot in Rentrak’s weekly DVD and Blu-Ray sales charts in its home-entertainment debut. The sequel’s capering birds were followed at the top by two other animated hits beloved by kids and therefore their parents: Warner Bros’ The Lego Movie and Disney’s Oscar-winning and all-time animated box-office champ Frozen.
The theatrical arrival of Dawn Of The Planet Of The Apes, another Fox film, likely caused its cinematic predecessor, Rise Of The Planet Of The Apes, to swing back near the top of the charts a whopping 136 weeks (more than 2 1/2 years) after it first arrived there.
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You can thank Netflix for helping the home entertainment industry to report the coulda-been-worse numbers for video sales and rentals in Q3. Total consumer spending, at $3.97B, was up 0.05% vs the period last year — even though, The Digital Entertainment Group notes, theatrical revenues for the releases were down 6.4% from last year. Still, the numbers show a $13.5M shift from high-margin sales to low-margin rentals: Total sales (including discs and electronic sellthrough) fell 7.4% to $1.72B while rentals (again, physical and electronic) were up 16.5% to $1.06B. Optimists will find comfort in the digital data. Spending on subscription streaming was +33.1% to $815.2M. That’s probably almost all Netflix; DEG doesn’t include subscription VOD that’s “bundled with other services,” which would knock out Amazon Prime. Studios also should be encouraged by the growth of electronic sellthrough: +46.4% to $273.9M. That’s an acceleration from the quarter last year (+37.7%) and in 2011 (+12.8%). VOD spending at $468M was up 2.8%, a slow down from last year when it was +8.5%. Results continue to look dismal for discs, though. Read More »
Effective this month, Hollywood studios will package digital film and television content under the standard “Digital” or “Digital HD” brand, trade org Digital Entertainment Group announced today. The distinction applies to non-physical filmed media with the “Digital” or “Digital HD” branding to appear on DVD and Blu-ray packaging, digital downloads, advertising, social media and publicity campaigns, and merchandising as well as in the UltraViolet brand for participating studios. “Digital HD (or Digital) is a dynamic and direct approach aimed at consumers who want movies and television shows that they can access on their favorite devices,” said DEG President Amy Jo Smith in a statement. “Whether they access the DIGITAL HD version as part of a Blu-ray purchase or as transaction through a digital store, we believe this terminology will help them understand they are getting an exciting, versatile product that heightens their home entertainment experience.” Anchor Bay Entertainment, HBO Home Entertainment, Lionsgate, Paramount Home Media Distribution, Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment, Universal Studios Home Entertainment, Walt Disney Studios and Warner Bros. Home Entertainment have agreed to participate in the initiative.
Here’s yet another indication that movie theater owners are making peace with the idea that their customers also want to spend time being entertained at home. This weekend 24 Cinemark theaters in five markets – San Francisco, Dallas, Salt Lake City, Chicago, and Cleveland — will charge $5 a ticket for matinee showings of Disney’s Lady And The Tramp, Peter Pan and Cinderella. It isn’t just for nostalgia’s sake. The exhibition chain will also sell Diamond Edition Blu-ray discs for each of the movies. Cinemark still sees an opportunity to lure buyers back. They’ll receive an unspecified “free offer from Cinemark and a special gift” tied to Disney’s upcoming Oz The Great and Powerful, Cinemark says. The company’s James Meredith calls it “a very exciting and unique program” to see the films on a big screen “before they return to the Disney vault.”
The continuing decline in DVD sales, and disc rentals at bricks-and-mortar stores and subscription services led by Netflix, continued to weigh the business down according to data out today from DEG: The Digital Entertainment Group. It reports that consumers spent $5.66B in Q4, a 1.5% drop vs the period last year. That resulted in a full-year total of $18B, up 0.23%. The total sell-through figure for packaged goods — largely discs — fell 8.4% to $3.1B in Q4. That’s due to DVDs: While the trade group doesn’t break out data for Blu-ray discs (it once did), it says that spending on the high-definition format was up 10% for the year. DEG doesn’t break out sales of UltraViolet-enabled discs but says that the initiative has “achieved significant milestones in industry and consumer adoption and is rapidly becoming an integral part of the home entertainment landscape.” Spending on digital downloads is up — 50% to $295M — but not enough to compensate for the decline in DVDs. Read More »
Spending for DVDs and Blu-ray discs is falling so fast that 2012 likely will be first year when consumers will pay more to buy and rent movies via the Internet, according to a report today from IHS Screen Digest Video Intelligence Service. The research firm says that the average household will spend $123.50 to buy and rent discs this year — down from $133.21 last year and $149.53 in 2010. The average home spent $206.78 in 2006, when Blu-ray discs were introduced. Looked at another way, people spent $8.8B last year to buy packaged videos, down 12% vs 2010. That will keep falling to $5.4B in 2016 — which IHS notes is “the level in 1997 when DVDs were first launched.” Meanwhile, consumers paid $5.7B to rent discs last year, down 7.3%. Much of that drop was due to the cut backs at Blockbuster, as well as the snafus at Netflix’ DVD rental business. With that largely behind us, and rental kiosks becoming more popular, disc rentals will increase slightly to $6B in 2016. IHS says that kiosks accounted for 34% of disc rental spending last year, and will grow to 41% this year, and hit 52% in 2015. The silver lining for studios is that the online business is growing. “If revenue were to be added from other viewing options such as video-on-demand, Internet-based sales and rentals, and subscription streaming from providers like Netflix and Hulu Plus…consumer spending … Read More »
Tech news reports I saw this weekend drop this bombshell on Hollywood as well as PC consumers: the next-generation Windows 8 operating system won’t automatically play DVDs and Blu-ray – even if your laptop has a DVD or Blu-ray drive. Instead Windows 8 will require you to fork over cash. Expect from greedy Microsoft an extra-cost option to install a Windows Media Center software upgrade to allow DVD and Blu-ray playback. Let’s hope a 3rd party freebie bitchslaps this abomination.
Moguls will need a stiff drink nearby when they read Morgan Stanley analyst Benjamin Swinburne’s bracing report today about the state of the home video business — and Hollywood studios. He says that film operations at Universal, Disney, Paramount, Fox, and Warner Bros are worth about $19.3B, down from $40.2B in 2007. And a big reason for the 52% drop is that studios’ annual home video profits from each TV household fell to $100 last year from $127 in 2007 — and will continue to slide to $93 in 2015. Sales and high-priced rentals of DVDs and Blu-ray discs from retailers such as Blockbuster are simply falling too fast as consumers discover that they can do just fine paying $1.20 a night to rent a disc at a kiosk — or less to watch a movie from Netflix. The analyst says it’s possible that studios will boost sales of discs with the UltraViolet initiative, which gives buyers opportunities to stream the movies to mobile and other digital devices. But probably not: Read More »
The year-end report from market research firm The NPD Group provides yet more evidence that the disc-rental business is in trouble. That shouldn’t bother Redbox yet: The firm’s kiosks accounted for 37% of all movie DVD and Blu-ray rentals, up from 25% in 2010. Netflix remained flat for the year at 30% — although its self-inflicted wounds (remember Qwikster?) were apparent in Q4 when it had just 25% of the disc rentals, a two-year low. The big loser was Blockbuster, which shuttered hundreds of stores as it retrenched from bankruptcy. Bricks-and-mortar stores, the field Blockbuster dominates, accounted for 17% of rentals, down from 23% in 2010. The silver lining is that many consumers now are paying to rent movies from VOD services: They accounted for 31% of all paid movie rentals last year. Netflix is the leader here but can take small comfort from the NPD tally: Its VOD market share dropped from 59% in Q2 and Q3 to 55% in Q4. “The movie-rental market is clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options,” says Russ Crupnick, SVP for Industry Analysis. “Even so renting physical discs from now-ubiquitous kiosks in grocery stores and other venues has taken the lead as the most popular movie-rental method in the U.S.”
Nomura analyst Michael Nathanson doesn’t buy the spin from DEG: The Digital Entertainment Group this week that the clouds are beginning to part for the home video business. The industry group said that spending only fell 2.1% last year — the smallest decline since 2008 — due in part to a 20% increase in spending on Blu-ray discs. ”The industry’s performance clearly stabilized,” DEG said. But Nathanson says in a report this morning that the figures are misleading because they include subscription payments for digital streaming from companies such as Netflix and Hulu Plus. They “are not directly tied to the distinct purchase of one title,” Nathanson says. “Why didn’t prior DEG reports include HBO and Showtime revenues? Consumers are subscribing to these networks for similar content.” But when you take the subscription numbers out, ”the industry’s health looks a little more sickly at -6.6% vs the -2.1% reported,” Nathanson says. “Using this approach, we maintain a view that consumer demand for physical and digital home entertainment titles is still, unfortunately, in secular decline.” The bottom line? Nathanson predicts that U.S. consumers will spend $16.3B on home entertainment this year, -4%, and $15.5B in 2013, -5%.
The 2012 International CES isn’t just an opportunity for the digital cognicente to look at new gadgets. It’s also a chance to brush up on the latest industry jargon. Don’t let it throw you. If you know the following words and concepts, then you should be able to easily hold your own in a conversation with someone returning from the annual consumer electronics spectacle in Las Vegas:
Ultrabooks: These are what you get when you cross a laptop computer with a tablet, and they’re grabbling the lion’s share of attention at the 2012 International CES. Ultrabooks are thin and light; most use solid state hard drives instead of the traditional storage drives built around a rotating disc. Intel is leading the cheerleading squad for ultrabooks, which it hopes will reenergize the laptop computer market. Read More »
EXCLUSIVE: When you consider how important gadgets are in James Bond lore, it makes sense for MGM and 20th Century Fox Home Entertainment to use the 2012 International CES to announce plans to release all 22 movies in a boxed set of Blu-ray discs. This will be the first time that all of the films — from Dr. No to Quantum Of Solace – have been offered together, and that nine of the films will be available in HD. The package celebrating 007′s 50-year film career also will include 130 hours of bonus features. The set will be available this fall for about $199, but fans can pre-order on Amazon starting today. The announcement will be made at a panel about the Bond films featuring directors John Glen (For Your Eyes Only, Octopussy, A View To A Kill, The Living Daylights, and Licence To Kill), Martin Campbell (GoldenEye, Casino Royale) and Michael Apted (The World Is Not Enough). Also appearing will be actresses Olga Kurylenko (Quantum Of Solace) and Caterina Murino (Casino Royale). Last year, Fox used the CES platform to announce sales of its Star Wars Saga set of Blu-ray discs.
The years-long decline of home video sales appears finally to have stabilized, the trade organization Digital Entertainment Group reports. While filmed home entertainment dipped 2% for the year in 2011, there were genuine positive signs. Annual spending on Blu-ray discs rose 20% last year, hitting $2 billion for the first time, the DEG says. Additionally, nearly 40 million homes now have Blu-ray playback devices, 38% more than in 2010. The decline in home video revenues has leveled off, with consumer spending on filmed home entertainment rising 1% for the second half of the year. The third-quarter spending actually rose 5%, the first quarterly increase since 2008. Additionally, electronic sell-through was up 9% for the year, and spending on video-on-demand was up 7%. Consumers also continued to embrace HDTV, purchasing 27 million HD sets during 2011. HDTV penetration is now at more than 74.5 million U.S. households. Read More »
I’m told that Sony is indeed sounding out cable programmers including Discovery, NBCUniversal, and News Corp to see whether they’re willing to cut deals to have their shows streamed to Sony devices such as PlayStations and Blu-ray players. The Japanese tech and entertainment giant is thinking about a model that would resemble Amazon’s with its new Kindle Fire tablet: It might cut the price of the devices, and count on subscription payments to make up the lost revenues. But nothing is imminent. And the feeling is that The Wall Street Journal, which broke the news about Sony’s plans this morning, pushed too hard on the possibility that the tech and entertainment giant might end up with a full-fledged rival to cable TV. Sony has raised the idea with programmers of offering channels live, just as they’d appear on cable. Insiders tell me, though, that there’s only a remote possibility that Sony will make much headway with that idea — except perhaps with minor networks that have few carriage deals. They consider it significant that Sony is telling programmers that it is open to creating a more conventional subscription VOD service like Netflix, Amazon, or Hulu Plus. Google, Apple, Microsoft, and Samsung have also been sniffing around to see what programming they can offer via the Internet, and on what terms. Meanwhile, pay TV companies are working on TV Everywhere deals so they can stream shows to subscribers’ digital devices. Read More »
Harry Potter fans take heart. Just because Warner Bros says it won’t ship more DVDs or Blu-rays after December 29, that doesn’t mean Hogwarts will immediately vanish from physical or virtual shelves. Or that it won’t be available for streaming, video-on-demand or downloading. “There will be Potter product come the first of the year,” says Jeff Baker, SVP/GM of Warner Bros’ Theatrical Catalog. “Over time, there’ll be less and less of that inventory,” Baker told EW. “At some point, whether it’s next April or May or June or July, it’ll probably be very difficult to find Harry Potter product, especially if you’re looking for the third movie or the fifth movie, for example.” Pulling classics out of circulation, even a big hit like the Potter movies, isn’t uncommon. Disney has been doing it forever with animated classics that are re-issued a few years hence in newer, “enhanced” or digitally remastered versions with more extras. Warner Bros has done it too with catalog titles such as The Wizard Of Oz, Gone With The Wind, and Blade Runner — only to be reintroduced with a big splash. Even Harry Potter: The Complete 8 Film Collection, which hits stores November 11, won’t include “an Ultimate Edition on the final two films,” which means there inevitably will be “some grand kind of piece” Baker says could come at “the end of 2012 or the beginning of ’13.”
Looks like that boycott called by hardcore fans didn’t amount to much. Nor were buyers perturbed by some very controversial changes in the 9-disc Blu-ray release of Star Wars: The Complete Saga with 40 hours of extras. Instead, the Complete Saga on Blu-ray release broke global sales records with 1 million units sold and $84 million filling cash registers. It quickly becomes the #1 pre-order and #1 catalog title since the launch of the high-definition format. Needless to say, Lucasfilm Ltd and Twentieth Century Fox Home Entertainment are high-fiving today’s announcement that Star Wars is the bestselling catalog Blu-ray Disc of all time, including 515,000 units sold in North America in its first week alone. This worldwide consumer spend included $38 million in North America – unprecedented for a 9-disc Blu-ray collection at a premium price: Read More »
Universal Studios Home Entertainment will kicks its Blu-ray and DVD campaign into gear at the “Fast Five 225″ auto race on Sept. 16 at Chicagoland Speedway. The latest installment of The Fast and the Furious franchise will be released on Oct. 4. Fast Five stars Tyrese Gibson and Jordana Brewster will serve as the grand marshals. ”The combination of Fast Five and NASCAR is sure to be a huge thrill for race fans,” said Universal Studios Home Entertainment president Craig Kornblau. “No two brands are bigger crowd pleasers or deliver a better action-packed, edge-of-your-seat racing experience.”