http://streamingmedia.com/article.asp?id=11730

http://www.broadcastingcable.com/art…stitutions.php

http://www.multichannel.com/article/…_For_Cable.php

Perhaps he can spend more time understanding the business when he does not have to worry about his company getting de-listed by the NYSE.

http://www.homemediamagazine.com/blo…-netflix-17663

http://www.videobusiness.com/blog/11…550050555.html

http://www.variety.com/article/VR1118010062.html

RedboxKioskIn what passes for good news these days, Hollywood’s biggest and most profitable business shrank a little slower in the third quarter than in the first half of the year, thanks entirely to rentals.

Overall home-entertainment revenue, including DVD and Blu-ray sales, rentals, video-on-demand and digital downloads and streaming, fell 3.2% in the third quarter to $4 billion, reflecting an ongoing decline driven by the economic downturn and plummeting consumer interest in buying movies and TV shows on shiny discs.

The Digital Entertainment Group, an industry trade association, reported that rental revenue rose 9.9% in the three-month period ending Sept. 30, even faster than the 8.3% growth it experienced in the first half of the year.

Every other sector of the home entertainment business, including DVD sales, high definition Blu-ray disc sales and digital transactions, grew slower or shrank faster than during the first half of 2009.

In its news release with the data, DEG attempted to highlight sales of Blu-ray disc sales, which rose an impressive 66.3% in the quarter. That’s a substantial slowdown, however, from the category’s 91% growth in the first half of the year.

Studios love Blu-ray disc sales more than any other type of transaction because profit margins are the highest. Although they’re growing fast, Blu-ray sales in the quarter were $161 million, just 4% of the home-entertainment industry’s $4 billion total. Industry hopes that Blu-ray could make up for plummeting sales of standard-definition DVDs have not been realized.

Total disc sales, including standard DVDs and Blu-ray, plunged 13.9%, a slightly bigger drop than the 13.5% decline in the first six months of 2009. In an effort to downplay just how dismal revenue from DVD sales has become, DEG didn’t disclose total revenue for the category.

[Update (5:45 PM): According to Rentrak Corp., which tracks industry sales and provides data to DEG, total DVD and Blu-ray sales were $1.98 billion last quarter, while rental revenue was $1.57 billion.]

Digital distribution, which includes online downloads and streaming as well as cable video-on-demand, rose 18%, down slightly from 21% in the first six months. It remains about 10% of the total industry with $420 million worth of revenue.

The accelerating growth of rentals appears to be driven almost entirely by fast-growing mail subscription service Netflix and $1 per night kiosk rental company Redbox. Blockbuster, the nation’s biggest physical DVD rental company, saw its revenue plunge by 22% in the quarter ended June 30.

However, the profit margins on rentals are substantially lower than for sales. That’s why three studios — Twentieth Century Fox, Universal Pictures and Warner Bros. — are attempting to block Redbox from offering their movies until several weeks after they go on sale. Warner Bros. is also trying to do the same to Netflix.

The fourth quarter is always the biggest by far for home-entertainment revenue, as that’s when most summer tentpole films, such as "Harry Potter and the Half-Blood Prince" and "Transformers: Revenge of the Fallen," are released on DVD. Many studios this year are taking aggressive steps this year to push consumers toward buying discs, particularly Blu-ray, instead of renting them.

Update (5:35 PM): Fox, Warner Bros. and Universal have all instructed their distributors not to provide DVDs to Redbox until several weeks after they go on sale at retail outlets. However, a Fox spokesman noted that that his studio did offer potential terms to Redbox for it to rent movies the same day they go on sale, but the two companies were unable to reach a deal.

–Ben Fritz
http://latimesblogs.latimes.com/ente…nment-biz.html

http://www.videobusiness.com/blog/11…440049344.html

IT’S DIFFICULT TO THINK OF A BETTER FILM released in the past year than Hunger. The directorial debut of video artist Steve McQueen, it traces the events of the 1981 Provisional Irish Republican Army hunger strike in Northern Ireland’s Maze Prison in which Bobby Sands (played by Michael Fassbender) starved himself to death, along with nine others, as the world counted the days. Given McQueen’s background in visual arts, it’s not surprising that Hunger isn’t a straight historical drama, instead taking an elliptical, visually beguiling look at the grim realities of men living in filth and destroying their bodies to fight back the only way they can. McQueen makes clear the toll the brutal prison regime took on the Protestant guards as well. To top it off, the film hinges around a 17-minute-plus single-take scene of Fassbender’s Sands and a priest played by Liam Cunningham performing a virtuoso duet for boyo patter and grim moral rhetoric.

When it first hit the film festival circuit in 2008, Hunger won several shelves full of awards, including the Toronto Film Festival’s Discovery Award, the Cannes Film Festival’s Golden Camera for McQueen and a British Independent Film Awards Best Actor trophy for Fassbender. Riding a wave of rapturous early reviews, it was picked up by IFC Films for distribution in the United States and opened in New York and Los Angeles in December 2008 — just in time for Academy Award consideration.

Assuming successful runs in the two biggest and most discerning movie markets in the country, Hunger would ordinarily have rolled out to art houses in bigger markets, then smaller markets all across the country; if it did well, it might even elbow its way into some mainstream multiplexes. But Hunger tanked in New York and Los Angeles — maybe shriveling hunger strikers and trembling guards were a bit too much as the recession deepened and the holidays approached — so it never made it to many markets. (It screened in Cleveland this summer.)

But Hunger did wind up having a local run, of sorts, this spring via Comcast Cable. For the past two years, the Independent Film Channel (IFC) has been making titles such as Steven Soderbergh’s two-part bio-epic Che, gritty Italian crime drama Gomorrah and Israeli/Palestinian drama Lemon Tree available on demand via its cable-TV arm at around the same time they hit theaters. For $6.99 — a good bit less than the going rate at most movie theaters these days — you can sit on your couch and watch movies that have yet to make it to the local art-house theater and may never.

Americans’ love of big popcorn movies seen on a big screen on opening weekend — especially summer weekends — is so well established and so lucrative that it’s hard to imagine the basic model changing any time soon. In fact, the blockbuster business is only getting bigger, with more mainstream filmmakers embracing overwhelming technologies such as 3D and IMAX. But at almost any level of film-viewing below the Terminator Salvations and The Hangovers of the world, all bets are off.

The rise of the Internet has created a world where, if you can type a title, no matter how old or obscure, into a search bar and hit return, you can track down a DVD copy, legitimate or otherwise, for delivery to your door. The proliferation of broadband means that attaching the word "torrent" to your search may lead you to a site where you can just download a bit torrent of the movie straight to your laptop. And that’s just the unofficial traffic in films: In addition to video-on-demand (VOD) offerings like IFC in Theaters, there are companies like Netflix that specialize in delivering DVDs to your mailbox, or now, through a broadband connection, directly to your TV. And web-streaming of full-length feature films with decent picture quality is on the rise.

In short, film lovers have become increasingly accustomed to wanting more and being able to get it, often whenever they want, if they can’t get it legitimately, many don’t let that slow them down. As consumer desires and expectations expand, companies ranging from movie studios to online retailers are trying a slew of new technologies and approaches in an attempt to adapt and arrive at the Next Big Thing in home entertainment, whatever that is, before the rest of the pack. It’s too early to tell how this will shake out in 10 years time, but film nerds will win out, as will some format or delivery system probably in the works right now. And just as some will win, others will lose.

THERE ARE ALWAYS PEOPLE looking for something they don’t have, and Mike White is one of those people. A lifelong film fan, he is the editor of the film ‘zine Cashiers du Cinemart and an occasional contributor to Scene sister paper Metro Times in his hometown of Detroit. (He is no relation to the actor/screenwriter/director of the same name, or the former Cleveland mayor.) White has spent years amassing a huge assortment of VHS tapes, laser discs and DVDs of his favorite movies, often illicit copies of obscure films that had never been available on home video. In the early ’00s, within the network of fans and websites devoted to such films, he began to make copies of some of his rarest items for other people.

"I had quite a collection and just tried to help folks out with finding obscure films," he says. "After a while it got to the point where I was sending out so many tapes that it didn’t make any sense to keep doing it for free, so that’s how superhappyfun.com was born."

Through superhappyfun.com, White and a partner sold DVD-Rs of hundreds of otherwise unavailable titles — everything from Japan-only films by shockmeister Takashi Miike to Change of Mind, a rare 1969 exploitation film in which a white man’s brain is transplanted into a black man’s body. And it turns out that it wasn’t just cult-y titles that people who stopped by the site wanted. The full-length version of 1976 TV movie Sybil, starring Sally Field, proved to be a popular request, as was Follow Me, Boys!, an obscure 1966 family film starring Fred MacMurray.

Of course, a "popular" film for superhappyfun.com might sell a few hundred copies. White says the site never brought in more than "pocket money … It might have helped pay for [acquiring] the movies themselves." But then, unlike organized pirates who churn out thousands of shoddy copies of hot new releases, White was focused on films, not profits. "I tried to be the most ethical bootlegger I possibly could be," he says. "My whole idea was that I wanted to be put out of business, in that all of the movies that I carried were available legally and easily for folks to get their hands on. It wasn’t to my chagrin that I would pull a title because it was coming on Criterion DVD, it was like, ‘OK, finally. Instead of a 12th-generation copy, here it is on DVD for everyone to see.’"

White gave up his part in superhappyfun.com in 2008, in part because of a conflict with his partner, in part because of "checking the mail every day to see if I had any cease and desist orders — after a while it got to be a little too unnerving." But the trade in bootleg copies of obscure films on the web continues, with sites such as Just for the Hell of It (j4hi.com) and Shocking Videos (revengeismydestiny.com) going strong. "Business is still pretty darn good out there for folks," says White.

"Our goal is to not only put those people out of business, but hopefully in jail," says George Feltenstein, senior vice president of marketing for Warner Home Video Theatrical Catalog. But even Feltenstein acknowledges that "the best cure to piracy is to make the product available. It all exists because there’s demand."

To that end, in March Warner Home Video launched the Warner Archive, a new retail program that has the potential to revolutionize the way studios deal with their film libraries and movie fans score copies of their undersung favorites.

For the past 23 years, Feltenstein has overseen Warner Home Video’s catalog business, releasing and marketing thousands of older titles from the vaults of Warner Bros., MGM (through 1986), RKO Pictures and other classic studio libraries — more than 14,000 titles in all, stretching all the way back to 1914. He’s been steadily bombarded with requests for titles that haven’t yet appeared on VHS or DVD. Even with what Feltenstein describes as Warner Home Video’s "aggressive" mining of its catalog — which includes everything from A Charlie Brown Christmas to Zabriskie Point — there have always been people willing to pay for obscure titles that it made no financial sense to release.

"Generally, we tend to need to break even at retail at around the 20,000-unit mark," says Feltenstein. "And if a title can’t make that threshold, it would make the likelihood of a retail release [very small]." The demise of stock-everything retail chains like Tower Records and Virgin Megastore has made releasing catalog titles even tougher.

Cue the Warner Archive. Via the program’s web page (wbshop.com/archive) consumers can now click on one of nearly 200 titles and counting from the Warner Home Video library and buy a DVD copy of the film, individually burned and packaged in a standard DVD keep case with printed cover art. While Feltenstein might find it hard to justify authorizing the manufacturing of 20,000 units of vérité-style ’70s heroin film Dusty and Sweets McGee or Christopher Strong, Katharine Hepburn’s 1933 leading-role debut, being able to sell individual copies on demand for a profit represents a win-win for consumer and studio alike.

"All these little nooks and crannies in our library, they become viable," he says. "At some point, every one of our 6,800 feature films and multi-thousand television shows, short subjects, cartoons — anything in our library — will be available to the consumer ordering through the Warner Archive collection."

The Warner Archive also offers on-demand downloads of the films for a lower (but not much lower) price. So far, Feltenstein says, download sales have been "basically a blip on the radar — the overwhelming majority of purchases have been for DVD." He declined to discuss actual sales figures, but concedes, "It would be foolish to believe that downloads from our library are not going to be a growing aspect of our business."

JUST AS PEOPLE HAVE ADAPTED to the idea of listening to a downloaded digital bundle of compressed 1s and 0s as an album, so have people begun to adapt to the idea of watching movies on a computer screen, or even the tiny window of a cell phone or MP3 player. Apple currently sells or rents thousands of films through its iTunes online store, and Amazon has followed with its own video-on-demand selection of 40,000 titles. Netflix offers a streaming library of some 12,000 titles, all free to its 10.3 million mail subscribers (up from 6.3 million in 2006).

"We think DVD rental by mail will continue to grow for five to 10 more years," says Steve Swasey, Netflix’s vice president for corporate communications. "But ultimately, 15, 20 years from now, it’ll all be streaming, and we believe that we’ve got a great stake in the ground for that."

Indeed, if anything is holding back an explosion of movies streaming over the Internet right now, it’s that in most broadband households, the Internet ends at a computer. But streaming is creeping ever closer to being as easy and appealing as flipping on the tube. A company called Roku manufactures a small black box that, for about $100, transfers streaming web video from Netflix or Amazon to your TV set. Perhaps even more decisive, Microsoft’s Xbox 360 videogame console performs the same trick. More than 11 million Xbox 360s have been sold in the United States, and according to Swasey, Microsoft has reported that more than a million Xbox owners have used the console to watch Netflix streaming.

The titles Netflix offers on streaming tend to be "catalog" films — older films, foreign films, TV episodes, not the current hits — and, at 12,000 titles, a fraction of its DVD and Blu-ray library of more than 100,000 titles. "When we buy the DVD, we own the DVD, but we’re licensing the streaming content differently," says Swasey. "This is new and it’s evolving. It’s a whole new economic model for the studios." In some cases, he says, Netflix doesn’t have a title for streaming because of expense — The Dark Knight doesn’t come cheap for any licensee in any form — and in other cases, it’s a matter of studios not wanting to compromise other licensing deals.

Those who hold the rights to films seem to be holding back online streaming somewhat too. In November 2008, Efe Cakarel launched the Auteurs (theauteurs.com), a website that’s a combination online streaming art-house theater and social-networking nexus. ("We want to … take foreign, classic and independent films to the people — and the people are on Facebook and Twitter," Cakarel writes via e-mail.) The fledgling site has formed partnerships with gold-standard DVD imprint the Criterion Collection and the World Cinema Foundation, and hosts an impressive array of curiosity-stoking contemporary films from all over the world. But so far it offers a total of 500 films for paid streaming.

"The big film studios who own a lot of the classic films still make a lot of money from TV deals and are afraid that doing smaller online deals will erode this lucrative source of income," writes Cakarel. "For undistributed films, rights holders hold on to the illusion that niche films have the potential to make them rich when released in the U.S. market and ask for unrealistic prices to show their wonderful films that are destined for small audiences."

So far, the Auteurs can boast 240,000 unique visitors a month and more than 80,000 registered users, though, as Cakarel acknowledges "not many people have paid for streams yet, but these are the early days for feature length [video on demand]."

Cable television — the other fat pipe of information flowing into many American homes — has been offering movies on demand and recent film releases on a pay-per-view basis for years. With the growth of VOD and the wane of theater screens devoted to independent and foreign films, IFC Films launched its IFC in Theaters program two years ago to make its films available on VOD via the IFC Channel to coincide with their theatrical releases.

"We found that it was very successful in terms of the way we were releasing," says Arianna Bocco, vice president of acquisitions and production for IFC Films. Not only does adding VOD offer "two revenue streams for all the marketing and publicity we [do] at the time," she adds, it creates "a wider outreach and wider footprint."

Bocco declines to offer any numbers, but does note that IFC in Theaters was successful enough that, in March 2008, her company launched IFC Festival Direct to bring to VOD new films that weren’t going to be getting anywhere near a theater anyway, from Fear Me Not — a Danish drama about a man taking part in an antidepressant study and suffering from ever more sinister side effects — to Faintheart, a British comedy about historical reenactors.

"You’re still spending money to release the movies," says Bocco. "But you’re really cutting out the most prohibitive costs of releasing a film [theatrically], which is the ‘P&A’" — prints and advertising. There’s some potential that if it does well on VOD that the film could actually make some money for the filmmaker, as opposed to what most films do, which is lose a lot of money."

OF COURSE, THIS BRAVE NEW world of obscure DVDs ordered up with one click and new films streaming instantly to your home doesn’t excite everyone, least of all those who have done the most to support discerning cinema culture over the past 50 years or so — namely the art-house theater and the serious video store.

George Mansour, now 75, has been booking art-house films since he was 30 years old, so he has witnessed the early waves of foreign films shaking up these shores, the collapse of the old Hollywood studio system and the rise of the independent filmmaker, the advent of home video and the heyday of crossover "indie" hits. In addition to consulting for New York’s famed Angelika Film Center, he now books 21 screens around the country. Asked if VOD programs like that of IFC affect the business such films do at theaters he books, he answers, "I think it does.

"Magnolia and IFC and companies like that are trying to have their cake and eat it too — trying to have theatrical runs and also have the money from on-demand," he continues. "It’s fine for them, but it is cutting into the grosses of the small, independent art houses. I don’t know whether ultimately it’s going to be something that’s self-defeating."

Neither IFC nor Mansour will discuss numbers for box office or VOD take, but Mansour cites recent IFC theatrical release The Girlfriend Experience, Steven Soderbergh’s hotly hyped film about an escort played by porn star Sasha Grey, as a film he suspects may have done better at in art houses if it hadn’t also been available via VOD.

"Maybe if I were a little more Olympian about this idea [I could say], ‘Well, this is a great way for someone in Lincoln, Nebraska, or some cut-off rural area, to be able to access specialized movies," says Mansour. "But why not wait three months, four months? At least give the theatrical run a chance for it to breathe and to generate grosses and to keep the places that advertise and that make people aware of these movies alive."

"For the kinds of movies we release, I think there’s room for both" theatrical release and VOD, says IFC’s Bocca. "And I don’t think that the theatrical experience will go away, because it’s a social experience. There’s so much more to it than watching a movie on a big screen." In the long term, she argues, "DVD has a larger chance of being in jeopardy" as a format than the classic art house.

Streaming may be coming on strong, but Blu-ray technology has given movies-on-disc a boost with its exquisitely sharp picture, rich sound and boatloads of features. "I personally don’t see a great rush of people who wanna build a collection of movies on their computer," says Warner Home Video’s Feltenstein. "But they want to have them to watch on their 100-foot screen. That’s what Blu-ray offers." And just as it took DVD a number of years to catch on, it will take it a number of years to die out, says Netflix’s Swasey. After all, he notes, "the VHS tape is still clinging to its last breath of life. You still have Americans with VHS players on their rack and tapes they just can’t part with. DVDs are only 10 years old."

Mike White just wants to watch more movies, and the format matters less than the fact that he knows they’re out there, out of his reach.

"What about all those films that still aren’t available on DVD and were never available on VHS?" he asks. "Are we ever going to catch up to that point? Or is that going to be version 4.0, where we actually have that dream that we’ve all had — you know, it’s three o’clock in the morning and I suddenly want to see The General with Buster Keaton, and I can just go to my interface unit and punch a code and there it is. It’s what they’ve been promising us for years. ‘Oh yeah, we’ll have every movie in the world and it’ll download immediately.’ You’ll turn on the chip in your head."

news@clevescene.com
http://www.clevescene.com/cleveland/…nt?oid=1632710

http://www.videobusiness.com/article/CA6687934.html