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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So much for the high-def discs that studios once hoped would revive home entertainment. Consumers bought about 124M Blu-ray discs in the U.S. last year, + 4.2% vs 2012, research firm IHS Technology reports this morning. But with prices falling, consumer outlays only increased 2.6% — not nearly enough to compensate for the 13.6% drop in DVD sales. If the trend continues, then it could result in “a downward turn in spending for the [Blu-ray] format in 2014,” says Senior Analyst Michael Arrington. “In any case, any reasonable amount of growth in Blu-ray is unlikely to prevent what will next year become a decade of decline for a once-thriving disc market.” IHS says that total spending on home entertainment sales and rentals increased 0.7% to $18.29B in 2013, a slower pace than in 2012 when the total was +3.1%. (The market peaked in 2004 at $21.9B, when discs accounted for 96% of home entertainment spending.) The results are especially disappointing, Arrington notes, considering that “2013 was another record year for the theatrical box office.” Disc sales fell 9.3% to $7.47B while disc rental spending declined 8.8% to $4.27B. That was slightly outweighed by increased Internet business. Movie and TV online sales were +38.7% to $1.31B, with rentals +39.6% to $600M, and subscription revenues +31.4% to $3.17B. Pay TV video on demand was up 0.7% to $1.48B.
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.
Most Wall Streeters hate the movie business. It’s messy and unpredictable, and the profits typically aren’t high enough to justify the risk. But RBC Capital Markets’ David Bank urges investors to take a fresh look this morning with a 104-page report that says studios have “the greatest visibility and least downside risk in the long term versus other businesses in the [media] conglomerate mix.” He recognizes that this is a tough sell. Cash flow margins at the strongest studios rarely top 10% while cable channels typically hit 40% or more. What’s more, “investors usually do not give much credit for individual [box office] wins, while they tend to punish individual losses.” But spending on home video “has appeared to stabilize domestically” following the collapse in DVD sales. Home entertainment declined to 34% of distributors’ average revenues from about 50% in 2007. That should improve as consumers warm to electronic downloads and Blu-ray discs. Bank also expects “substantial growth” in the ranks of the middle class — and entertainment spending — in China, Brazil, Russia, and Eastern Europe. Hollywood is responding by releasing more “culturally neutral” stories, he says, “with an emphasis on action-adventure movies as opposed to comedies, which tend to be more culturally biased” and especially “globally recognized franchises.” Other tidbits in the report: The term “tentpole” was first used in 1987 for Beverly Hills Cop 2. And the film with the highest profit margin so far this year (as … 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.
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.”