Extreme Reach leaderboard - 11-8-20

Analysis for 'Studios'

  • UltraViolet and TV Everywhere: It's All About Devices and Access. But That's Not Enough.

    I'd wager the two most spoken words in the media and entertainment industries these days are "devices" and "access." Executives are gripped by the idea that consumers must have access to their content across a growing universe of video-enabled devices. In fact, the premise of the industry's two most strategic initiatives - UltraViolet and TV Everywhere - is that by enabling access to content on multiple devices, traditional business models will either be reinvigorated (in UV's case for DVD purchases) or buttressed against attack (in TVE's case for pay-TV's multichannel bundle).

    If only things were that straightforward. While it's undeniable that improved access on multiple devices is extremely valuable, especially for today's on-the-go viewer, the shortcoming of both UV and TVE is that neither addresses fundamental changes in consumer behaviors or preferences. Broader access is only half the battle here; the other half is devising the right business model that meets consumers' vastly changed expectations. Until this piece of the equation is solved, I doubt that either UV or TVE is going to have the industry's hoped-for impact.

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • VideoNuze Report Podcast #123 - Aereo, Starz-Netflix, UltraViolet

    I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 123rd edition of the VideoNuze Report podcast, for Mar. 2, 2012. This week's podcast has a different format; instead of discussing one topic in depth, we touch on three areas - the new lawsuit against Aereo, Netflix's deal with Starz ending (and whether the "flix" is coming out of Netflix) and UltraViolet's strategy of using discs to drive adoption.

    continue reading

     
  • Penthera full banner - 3-10-20
  • With New Disney Deal, Is YouTube Poised to Disrupt Online Movie Rentals?

    Last Wednesday, just before the Thanksgiving break, YouTube announced a deal with Walt Disney Studios which will make hundreds of new and classic movies from Disney, Pixar and DreamWorks available for rental. The Disney deal adds to the online movie rentals (or "iVOD" as this category is also known) initiative YouTube announced last May. Between the breadth of movies soon to be available, its aggressive pricing - including $.99 rentals on recently-released blockbusters, its integration in numerous connected devices and of course, its status as the online video market's 800-pound gorilla, YouTube may just have what it takes to disrupt the iVOD market, impacting the broader Hollywood and movie distribution industries.

    continue reading

     
  • Penthera full banner - 3-10-20
  • AnyClip Licenses Warner Bros. Movies for Clip Library

    AnyClip is announcing this morning that it has licensed thousands of Warner Bros. movies to be able to tag and create searchable clips for its library. Movies include select Harry Potter and Batman movies, Ocean's Eleven, Sex and the City, Dirty Harry, Casablanca and others. AnyClip tags each movie with over 5,000 unique elements to create a rich index. To date AnyClip's has been offering access to 50,000 clips from 12,000 movies sourced from Universal, Vivendi and others.

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • Cinemark Shouldn't Worry: Universal's "Tower Heist" $60 VOD Test Will Also Flop

    Late yesterday, the LA Times reported that Cinemark, the 3rd-largest theater chain in the U.S., will boycott "Tower Heist," the new Eddie Murphy-Ben Stiller comedy, because of a test unveiled by its studio Universal Pictures to offer the movie just 3 weeks after its theatrical release for $60 on video-on-demand. Cinemark is concerned that the test would cannibalize box office sales. From my perspective, it needn't worry much as the test is likely to be yet another flop in what has become known as "Premium VOD."

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • DreamWorks Gives Netflix A Much-Needed Lift, But Not Until 2013

    DreamWorks Animation's new output deal with Netflix gives the beleaguered streaming-only provider a much-needed lift, but unfortunately not until DreamWorks' 2013 movies are released. Under the deal, Netflix may pay up to $30 million per movie, an increase from the $20 million that HBO is believed to have been paying DreamWorks. The press release also notes that some of DreamWorks' catalog movies such as "Kung Fu Panda," "Madagascar 2," "Chicken Run" and "Antz" will also be included over time.  The DreamWorks deal comes on the heels of last week's news that Netflix licensed library programs from Discovery Communications.

    continue reading

     
  • Penthera full banner - 3-10-20
  • Amazon Gets Universal Movies to Stream That Netflix Already Has

    Amazon announced a new licensing deal with NBCU that gives it streaming rights to a batch of older movies from Universal Pictures, bumping to 9,000 the number of movies and TV shows available for its Amazon Prime Members. However, the move is unlikely to have the folks at Netflix quaking in their boots; like Amazon's licensing deal with CBS from last week, virtually all of the Universal movies are already available on Netflix (by my count 9 of the 11 titles identified in today's press release can be streamed on Netflix while only "Elizabeth" and "Fletch" are available solely on DVD).

    Don't get me wrong, more content is always a good thing, and these deals, along with an acquisition of Pushbutton, a UK app developer for connected devices, suggest things may be ramping up at Amazon. But the content deals do underscore the catch-up game that Amazon is playing with Netflix. That's the dynamic in today's market - Netflix got a head start in aggregating Hollywood content for online distribution. Now, to the extent it has a willingness to pay, Amazon must go do similar deals.

    continue reading

     
  • Penthera full banner - 3-10-20
  • Netflix Inks Miramax Deal; Streaming Movies Still Plenty Important

    Netflix is announcing a new multi-year deal with independent film studio Miramax, giving it streaming access to hundreds of films in the U.S., including Best Picture winners "The English Patient" and "Shakespeare in Love" plus others like "Good Will Hunting," "Pulp Fiction," "Kill Bill," "The Piano," etc. In all, the films coming to Netflix have gained 284 Oscar nominations and won 68 times. Miramax was recently spun-off from Disney, and this is the first time the films have become available in any digital subscription service.

    The deal is another significant win for Netflix and underscores the point that movies are still plenty important to the company's streaming content strategy, despite the fact that most of its recent content acquisitions have been catalog TV programs. The challenge with acquiring streaming film rights is that "windowing" (i.e. the process by which a film passes through predetermined distribution outlets - theatrical, VOD, DVD, online sell-through, etc.) is still quite strictly enforced by studios, making it challenging for Netflix to accelerate its acquisition efforts.

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • Premium VOD is a Train Wreck Though It Just Doesn't Matter

    Yesterday marked the official launch of "Premium VOD" by DirecTV, a plan under which movies will be released just 60 days after their theatrical opening (half the usual time) for 48-hour rental by subscribers for $30. The first movie being offered this way, which DirecTV dubs "Home Premiere," was Sony Pictures' "Just Go With It" starring Adam Sandler. Three other studios, Warner Bros., Universal Pictures and Fox have already signaled their intent to release movies on Premium VOD with DirecTV and other pay-TV operators who have expressed interest.  

    Theater owners and the Hollywood creative community are livid about Premium VOD, which they perceive as paving the road to cannibalizing theatrical attendance which would in turn harm a movie's overall economics, creating a dangerous downward spiral. In addition, there's concern that if consumers switch to watching movies on the small screen then the creative license implicit in a big screen emphasis will get squeezed. While their concerns are completely justified, the good news for them is that Premium VOD will be lucky to achieve even minimal success. Instead it will more than likely end up being a short-lived experiment that will have virtually no impact on larger Hollywood dynamics. Here's why:

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • New Netflix Deals Show How Little "Dexter" and "Californication" Really Matter

    A couple of weeks ago, in "Showtime Circles Its Wagons, But to What End?" I questioned Showtime's decision to withdraw from Netflix streaming rights to early seasons of 2 of its hit shows, "Dexter" and "Californication." One of the points I made was that Netflix would survive this loss just fine because they have enough streaming content already, and more coming all the time.

    Sure enough, Netflix has more than proved my point, announcing a deal last Friday with 20th Century Fox that gives it streaming rights to the first season of the Fox hit "Glee," the first 2 seasons of the FX favorite, "Sons of Anarchy" and the library of "Ally McBeal" and "The Wonder Years." Then this past Wednesday, Netflix announced a deal with Lionsgate for streaming rights to the first 4 seasons of AMC's signature series "Mad Men," with 3 more seasons to follow after their on-air run (Netflix already had the Canadian streaming rights to the show).

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • Sony Pictures Taps Value of Archive With Thought Equity's Metadata Editor

    Major content providers are continuing to realize that new value can be mined from archives of long-form premium content by creating and indexing metadata in order to distribute shorter clips of key scenes. The latest example came this week as Sony Pictures Entertainment struck a deal with Thought Equity Motion to use its T3 Metadata (screen shot below) for its enormous catalog of entertainment content.

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • Movie Windows Back in the Spotlight

    Movie windows were back in the spotlight this week as Hollywood executives continue to air out their anxiety over digital distribution's impact. In a pair of articles (here and here), Home Media Magazine covered remarks by Disney CFO Jay Rasulo and Time Warner CEO Jeff Bewkes at the Deutsche Bank conference in Palm Beach, FL. Rasulo put his finger on Hollywood's challenge of how to "re-work release windows to generate incremental revenue, without cannibalizing existing revenue streams and upsetting distribution partners."

    However, as Disney knows from its experiment last year of accelerating the DVD release of "Alice in Wonderland," which raised the ire of British theater owners, balancing these objectives is no easy feat. Meanwhile, as "Premium Video-on-Demand," an early window release plan for $30-$40 per movie approaches, theater owners' unhappiness will become even more apparent.

    continue reading

     
  • Penthera full banner - 3-10-20
  • Facebook-Warner Bros.: Big Deal or Little Deal?

    Speaking of movies, this week brought news that Facebook was dipping its toe into Hollywood's waters, by offering Warner Bros. "The Dark Knight" for purchase and rental to its members. Though Warner positioned the move as an experiment, Netflix stock went into a free-fall as investors swooned over Facebook's possibilities. But as a former business school professor of mine was fond of asking his class, "Is this a BIG deal or a LITTLE deal?"

    continue reading

     
  • Penthera full banner - 3-10-20
  • As DVD Sales Wane, Experiments With Movies' Digital Delivery Windows Rise

    Yesterday brought more evidence of how digital distribution release windows and promotions are rising as DVD sales wane. First there was news that Disney had teamed up with Wal-mart to allow buyers of the Toy Story 3 DVD to get a bonus digital version of the film playable through the company's recently acquired Vudu digital outlet. That offer was quickly one-upped by Amazon which announced an increase from 300 to 10,000 movies in its "Disc+" program, which provides a digital copy to the user's Amazon VOD account when they purchase a qualifying DVD.    

    Meanwhile at the Blu-con conference in Beverly Hills, studio executives debated how to best calibrate digital, VOD and DVD distribution. Even emerging practices come with exceptions and debates about results. For example, while VOD has largely gained day-and-date release with DVD, exceptions are still made on a case-by-case basis, such as with Universal's "Despicable Me" which will have its DVD go on sale on Dec 14, but its VOD release not until after Christmas.

    continue reading

     
  • Extreme Reach full banner - 11-8-20
  • Time Warner's "Premium Video-on-Demand" Experiment is a Blind Alley

    Talk about an initiative that flies in the face of all prevailing sentiment: Time Warner is moving forward on testing a new window for early-release movies on VOD priced at $20-30 apiece in 2011, according to comments its CFO John Martin made yesterday at the Goldman Sachs conference. Never mind the wrath the idea will stir up among movie theater owners whose traditional windows get cannibalized as a consequence (Disney learned about that with its "Alice in Wonderland" early DVD release experiment last February), the real issue is that pay-TV operators should deem the idea a non-starter.

    Typical VOD rental rates of $4-5 already look expensive to consumers compared to Netflix's $9 all-you-can-eat monthly plans and Redbox's $1 DVD rentals. And while there are scenarios where getting a group or family together to watch a movie makes sense, it's getting harder than ever to do so. The reality is that families are atomizing to their individual activities; perusing or playing on Facebook, watching YouTube/Hulu/Netflix/etc., playing with the Wii or Farmville, chatting on Skype, shopping on Amazon, etc. Corralling this crowd and getting them to agree on any one movie is already a challenge; the prospect of paying $20-30 for the pleasure just sets the bar that much higher.

    continue reading

     
  • Penthera full banner - 3-10-20
  • Hollywood Considers Squeezing Theatrical Window

    An article in the WSJ.com this past weekend, "Hollywood Eyes Shortcut to TV," describes how some Hollywood studios' appear ready to further squeeze their bread-and-butter theatrical relationships in the name of accelerated electronic distribution to viewers' TVs.

    The article cites proposals that Time Warner Cable, America's 2nd largest cable operator, is discussing with studios to offer movies to Video-on-Demand (VOD) just 1 month after they open in theaters, instead of today's typical 4 months. The idea, dubbed "home theater on demand" ("HTOD" for short) would mean a movie would be available on HTOD while still playing in theaters. Adopting such an approach would be akin to Hollywood sticking its finger in the eye of its theatrical partners, who would obviously suffer some degree of diminished ticket sales.

    Hollywood studios surely know the firestorm an HTOD move would create. In the past 6 months, plans to overlap theatrical and electronic distribution - with Disney's "Alice in Wonderland" and Sony's "Cloudy With a Chance of Meatballs" - met with stiff resistance from theater owners. With the new HTOD concept, studios seem intent on pushing further into this perilous territory, motivated by a desire to get movies into viewers' hands earlier than ever before.

    In general I applaud studios willingness to experiment, but I think the value of HTOD and other early release plans is overestimated and more likely to backfire on studios than produce any tangible financial benefits.

    The first issue is cannibalization. It's hard to imagine, given all the marketing effort around a movie's premiere, that the aggregate short-term audience for a particular movie can be expanded all that much. Certainly few people who just paid to see the movie in the theater will pay again to see it at home so quickly thereafter. And if you really wanted to see a movie, wouldn't you have made it to the theater in the first place?

    Instead of tempting people to not bother going out, studios should be giving consumers more reasons to actually do so. Studios have so many new opportunities with social media, local-based services and user-generated content to add excitement to movie premieres. This is particularly true for younger audiences critical to box office results. Some of these new efforts can extend all the way through a movie's DVD and electronic release, adding downstream value as well.

    In addition, even with movie ticket prices now approaching or hitting $20 apiece, in my opinion, HTOD's proposed fee of $20-30 is way too high. Most VOD movies today cost around $5-6; trying to justify a multiple of that price for HTOD, for the sole benefit of earlier in-home access, is a huge stretch. In reality, consumers seem plenty willing to wait in exchange for lower prices. That's the key takeaway from Netflix's willingness to do the 28-day DVD window deals with major studios. If a consumer can pay a paltry $9/mo they'll be just fine waiting until the movie becomes available on DVD or for streaming. Hollywood needs to be careful not to overestimate the value of its product.

    Last but not least, HTOD is a risky play because cable-delivered VOD itself is going to be coming under intensifying competition. Recently I explained how competition for movie rentals is intensifying, making VOD just one of many, many choices for consumers. Initiatives like Google TV undermine VOD because when a consumer can just as easily access movies from various online outlets directly on their TVs, VOD usage will inevitably suffer. Though I'm skeptical about new efforts from retailers like Wal-Mart and Best Buy, they will add more on-demand movie choices and will further turn up the pressure on VOD.

    Electronic distribution is a hot topic these days, and studios are right to explore their options. But while studios' relationships with theater owners are far from optimal, in my opinion studios need to be very careful about jeopardizing them further. Rather than undermining theatrical release with ever-earlier electronic distribution plans, studios should be figuring out how to build more value into them.

    (Note - if you want to learn more about how Hollywood succeeds in the digital distribution era, make sure to join us for the upcoming VideoSchmooze breakfast in Beverly Hills on June 15th! Click here to learn more and register for the early bird discount)

    What do you think? Post a comment now (no sign-in required).
     
  • Extreme Reach full banner - 11-8-20
  • Fox and Netflix Agree to 28-Day Window

    Netflix and Fox are announcing this morning an expanded content licensing agreement which creates a 28-day DVD window and gives Netflix streaming access to certain prior season Fox TV shows. The 28-day window, which delays Netflix access to new DVDs until 28 days after their release date is similar to a deal that Netflix struck with Warner Bros. earlier this year.

    I continue to be a fan of the 28-day window, as it allows studios a little more time to eke further revenue out of the rapidly-declining DVD sales business, while expanding Netflix's catalog for streaming and reducing its cost on physical DVD purchases. Netflix's Watch Instantly streaming feature has been a game-changer for the company, essentially reinventing the company's value proposition from a DVD subscription business defined by the number of discs out at any time, to one where subscribers get unlimited digital use. The key to its success is building the library of titles for streaming and that's what these 28-day deals are all about.

    Update: Universal also announced a 28-day deal with Netflix this morning. Release is here.

    What do you think? Post a comment now (no sign-in required).

     
  • Extreme Reach full banner - 11-8-20
  • Blockbuster Hangs In with New Fox, Sony and Warner Deals

    Netflix wasn't the only distributor modifying how it does business with Hollywood studios this week; Blockbuster also unveiled new deals with Fox, Sony and Warner, giving it "day-and-date" availability of these studios' films for store and mail rental (note, not for its on demand streaming service). Blockbuster also got "enhanced payment terms" from the studios in exchange for giving them a first lien on Blockbuster's Canadian assets (which would imply that if Blockbuster files for bankruptcy, the studios could end up owning/operating a slew of Canadian stores). Seems like steep terms for Blockbuster to hang in there.

    As I wrote a few weeks ago in "The Battle Over Movie Rentals is Intensifying," there are multiple distributors jockeying to be the consumer's preferred movie source. That means consumers need to figure out, on a title by title basis what works best for them.

    For example, I'm a Netflix subscriber and let's say I want to watch the recently released "Sherlock Holmes" DVD. Netflix doesn't get it until April 27th per its 28-day window with Warner Bros. But when I check online, a local Blockbuster store I've never been to shows that it's in stock (though I'm a little skeptical). Do I want to drive down there to find out? Meanwhile, Comcast is offering it on-demand. But do I want to pay $4.99 for it when I'm already paying a monthly Netflix subscription? Alternatively, there's iTunes and Amazon VOD. But then I need to either watch on my computer or on the TV that's hooked to the Roku or temporarily connect my laptop to the TV. See what I mean about the choices facing consumers?

    (Note - online movie distribution is among the topics we'll cover at the next VideoSchmooze on April 26th. Early bird discounted tickets available for just one more week!)

    What do you think? Post a comment now (no sign-in required).

     
  • Extreme Reach full banner - 11-8-20
  • The Battle Over Movie Rentals is Intensifying

    News this morning of a $30 million advertising campaign being launched by 8 Hollywood studios and 8 cable operators promoting "Movies on Demand" is fresh evidence that the battle over movie rentals is intensifying. According to the press release, the 12-week campaign, dubbed "The Video Store Just Moved In" is meant to raise consumer awareness of the convenience and affordability of renting movies on cable.

    Cable Video-on-Demand (VOD) has been around for a long while (in fact 20 years ago my summer internship for Continental Cablevision was studying the ROIs for VOD's precursor, "Pay-per-view"). What's new more recently is the growth of so-called "day-and-date" availability - which means movies are released to VOD at the same time as they become available on DVD. The other recent phenomenon is the widespread adoption of digital set-top boxes and other technologies which makes selection, ordering and delivery easier than ever.

    Day-and-date availability is a key competitive differentiator for cable vs. other options, though on the surface it seems somewhat incongruous that studios are on board with this considering their desire to protect DVD sales (this was the key goal of the 28-day "DVD sale" window Netflix and Warner Bros. recently created). Yet Kevin Tsujihara, president of Warner Bros. Home Entertainment Group said that apparently research has shown that simultaneous VOD release doesn't hurt DVD sales. All titles Warner Bros. releases to VOD this year will have day-and-date availability.

    The day-and-date advantage is evident at least vs. Netflix for the 9 movies the press release cited as the opening slate being promoted: "Precious," "New Moon," "Ninja Assassin," "Pirate Radio," "Astro Boy," "Bandslam," "Did You Hear About the Morgans," Fantastic Mr. Fox" and "The Fourth Kind." A search on Netflix for the 9 revealed that 5 are listed as "Short wait," 1 becomes available on Mar 20th, 1 on Mar 23rd, and 2 on April 13th (none are available for streaming). However, it's a different story for Amazon - all of the cable VOD movies are currently available for rental from Amazon (except "Mr. Fox") and for purchase. The Amazon rental price is $3.99 for each, whereas the rental price from Comcast (my service provide) is $4.99.

    For now anyway, it seems Hollywood studios have decided that cable VOD and online rental firms get day-and-date access, while subscription services like Netflix wait longer (btw Redbox too is being pushed into the "wait longer" category). According to the NY Times article, this is likely because VOD and online rental give studios a 65% share of revenue vs. lower percentages for other outlets.

    For consumers, the cable VOD option is likely the most convenient and instantly gratifying. There's no new box to set up or pay for as with Roku, TiVo or another, which would be needed to access Amazon VOD, for example, on TV. For those that haven't bridged broadband to their TV with such a box or a direct connection, on-computer viewing only would be a limitation in the experience. Still, while the day-and-date option is key for those consumers who just have to see a particular title right then, because it's a la carte, it's a far more expensive option than a monthly Netflix subscription, which starts at $8.99/mo. Convenience clearly has its price.

    Consumers aren't monolithic though; there isn't one right or wrong model. Each viewing option offers pros and cons and consumers will choose which one, given the particular moment or circumstance, best meets their needs. With the battle for movie rentals escalating, the real winner here looks like the consumer who is being presented more choices than ever.

    What do you think? Post a comment now (no sign-in required).

     
  • Extreme Reach full banner - 11-8-20
  • U.K. Theaters Will Show "Alice in Wonderland" Ending DVD Early Release Flap

    The brinksmanship between Disney and the 3 largest U.K. theater chains over whether they would show Tim Burton's new "Alice in Wonderland" film is officially done, with all 3 chains now signed on. As I described last week in "In Trying to Preserve DVD Sales, Studios Are in a Tight Spot," in a bid to boost DVD sales, Disney was looking to trim the DVD release of "Alice" to just 12 1/2 weeks after its opening, from the customary 16 1/2. British and other European theaters revolted, angry that the move would diminish their box-office take, a particular hot-button in light of significant investments they've recently made in digital technologies.

    Specific details of the Disney-U.K. deals aren't known, but as the Guardian reported, it appears that Disney has agreed to cap the number of movies that will get earlier-than-usual DVD releases and provided some improved financial terms. Despite the U.K. resolution, some other European chains are still holding out, as is the AMC chain in the U.S. Regardless of the final outcome of the "Alice" situation, early DVD releases are going to remain a priority for Hollywood studios who are desperate to stanch the fall-off in DVD sales brought about by the recession and the shift by consumers to rental, subscription and online viewing options. There are many more chapters to be written in this saga.

    What do you think? Post a comment now (no sign-in required).

     
  • Penthera full banner - 3-10-20

Sample