Familiar script: Home entertainment spending slips
Spending on home viewing of movies and television, on a downward spiral in recent years, fell again in 2011 as sales of DVDs and rentals at video stores dropped.
Total U.S. consumer dollars spent on home entertainment — including DVDs, video on demand and online streaming — declined 2.1 percent to $18 billion for the year, according to industry group DEG: The Digital Entertainment Group. Consumers continued to shift to lower-priced rentals from companies such as Netflix and Coinstar’s Redbox kiosks, eschewing outright ownership.
The DEG pointed to bright spots, including a 20 percent jump in sales of high-definition Blu-ray discs that topped $2 billion for the first time. “The industry’s performance clearly stabilized in 2011,” it said in a statement. (The top choices for the year? “Harry Potter and the Deathly Hallows – Part 1,” followed by “Part 2″ at No. 2)
Meanwhile, Hollywood is trying to reinvigorate interest in movie ownership with a cloud-based digital locker called Ultraviolet that allows viewing anytime from Internet-connected devices. The consortium that runs Ultraviolet, in an announcement at the Consumer Electronics Show in Las Vegas, said movie studios will offer hundreds of titles with the Ultraviolet option this year, up from a paltry, initial 19.
More than 750,000 households have registered with UltraViolet to create digital libraries since last fall’s launch, Mark Teitell, general manager of the Ultraviolet consortium, said in an interview. Photo Credit: Warner Bros. Pictures
Wow! My Blockbuster is closed
The fate of the Blockbuster movie rental chain really hit home this weekend when I saw a “for rent” sign on what was once a busy location. That particular shop — on a high-traffic Westchester, NY strip, across the street from a always-busy mall — was once a bustling spot, particularly on weekends. The economy is rough, of course, but I would have bet it would outlive its smaller neighbors.
Nope. The mom-and-pop pet supply store a few doors down, which is spitting distance from a mega-PetSmart and PetGoods? Still open. The baseball card memorabilia/comic book shop? Open AND buying stuff.
Sure, Blockbuster, which is facing tough competition from Netflix and Redbox, has said it planned to close up to 1,560 stores by the end of this year. And I — a Netflix member and cable on-demand user — can’t remember the last time I was actually in that store. Maybe its my fault.
Nah. Even the the movie studies and cable companies want to eat Blockbusters lunch. And these are no shortage of Blockbuster gripe stories (http://www.ihateblockbuster.com/).
But I’ll tell you one thing, it will be interesting to see if Blockbuster CEO Jim Keyes can turn aroung the death spiral talk surrounding the company. He’s laid out some interesting and optimistic ideas and plans for the stores. His vision is for stores that serve as a content hub. The problem is the number of folks who still see Blockbuster as it is portrayed in this 1990′s ad:
Perhaps Keyes he can work magic on those stores. That is, the ones that are still open.
Blockbuster gets kicked when it’s down by cable companies
It’s a tough time to be a video rental store owner wherever you are, but it’s especially tough if you’re Blockbuster Inc and have 6,500 stores to manage, thousands of employees, expensive debt repayments and a sinking share price.
Yesterday Blockbuster warned for the first time that it may need to file for bankruptcy protection and its auditors at Pricewaterhouse raised doubts about its ability to continue as a going concern.
It doesn’t get any worse than that right? No, it does.
According to a story we spotted today from Hollywood Reporter, movie studios and cable companies are joining forces for a $30 million advertising campaign over the coming months to promote awareness of movies available on cable’s video on demand services.
From Hollywood Reporter:
The Movies on Demand initiative comes as on-demand film rentals have hit new highs as viewing habits are changing, and studios are increasingly looking to capitalize on their high margins amid a more mature DVD market.
The TV, print and online ad campaign runs under the theme “The Video Store Just Moved In” and highlights how easy it is for digital cable subscribers to view movies at home with a simple click of their remote. It also includes a dedicated website at CableVideoStore.com and a Movies on Demand logo.
I worked for a locally owned video rental store (6 locations) in 2008. It’s numbers each month were hand over fist higher than 2007. I still stop in occasionally, and my former manager assures me that buisness is still going up.
Perhaps it’s just blockbuster that sucks?
Soccer clubs and mortgages: How a media mogul spends $10 million
Unlike many of us, media executives know what it’s like to play around with large wads of cash. So it seemed natural to ask them about what kind of investment opportunities they’re seeing when they gathered in New York this week for the Reuters Global Media Summit.
We gave each media honcho $10 million in hypothetical cash and told them to put the money to work without buying stock in their own companies.
Some executives plowed the money into broad sectors and regions, like emerging markets, while others zeroed in on specific stocks, like Electronic Arts’ CEO John Riccitiello’s penchant for software maker Adobe.
Zynga CEO Mark Pincus said he already owns shares of privately-held Facebook, the Internet social network on which many of Zynga’s video games are designed to be played on, and that he’d buy more on the secondary markets (OK, so he creatively sidestepped the rule against investing in his own company).
And some media moguls seemed to have investment strategies driven by goals other than maximizing returns:
“I would put it in US-based international equities. I mean, if you said….If you forced me to invest a dollar.”
(Reuters: You can put it in your pillow if you want.) That’s what I’ve been doing. Unfortunately, the pillow was unsleepable
from Summit Notebook:
Redbox: Paving the way for “G.I. Joe” rentals
You thought that maybe that giant Redbox machine in your local food mart, offering $1 DVDs, was simply a low-cost way to share a movie night with the family.
Its REALLY a (nearly) free pass for guys to grab testosterone-rich, leave-your-brain-at-the-door, man-cinema, where stuff blows up reaaal gooood.
You know: "Predator" or "Conan the Destroyer." Or something else starring Govenor Arnold. Redbox President Mitch Lowe said the low price allows people to explore their taste universe...
"What is misunderstood is that that dollar price point gets you to watch movies and rent movies that you never would have thought of renting before."
... and reap the fringe benefit...
"I've seen examples of wives approving renting, I think, "G.I. Joe: The Rise of Cobra" just because it's just a buck, where as if it was Blockbuster, they would say "you are not going to spend three dollars on that movie I'm never going to watch."
The flip side: Don't be surprised, guys, if you develop an (ahem) "urge" to sample Jane Austen's " "Sense and Sensibility" or the "Sisterhood of the Travelling Pants."
Netflix CEO Reed Hastings on Xbox, Youtube, iPhone
We caught up with Netflix CEO Reed Hastings at the movie rental company’s event where it awarded a $1 million prize after a contest aimed at improving the accuracy of movie recommendations. He spoke about his hopes of working with Apple on the iPhone, the possibility that YouTube will beef up its movie service, and the future of the DVD.
Reuters: What will Netflix subscribers gain from the improvements in the recommendation system?
Hastings: It’s doubling the quality of our movie recommendation and that helps our subscribers get more enjoyment from movies. Because more often they love the movie they watch. More often the movies recommended will will turn out to be movies that you love. If you watch a couple of movies and don’t like many, you start to watch (sports and other programming). If every movie is incredible, you start to watch more.
Reuters: Netflix video streams on Microsoft’s Xbox Live system. What about the PS3 and Wii? Hastings: Eventually we want to be on all the game consoles, all the Blu-ray players, all the Internet TVs. So we are working in parallel with all of those efforts. Currently our Xbox deal is exclusive and we haven’t characterized it more than that.
Reuters: Any plans to work in partnership with Apple and the iPhone? Hastings: it’s something that’s likely to come over time. But nothing in the short term. (With) movie watching, we are not focused on mobile yet, but (instead) on the TV, on Blu-ray and on the video game consoles. We will get to mobile eventually, including the iPhone.
Reuters: What of Youtube’s potential movie service? Hastings: I think there will be a lot of competition in this market: Hulu, Apple, Amazon, Youtube, Blockbuster. Internet video is a huge opportunity. And there will be a lot of people engaged, and that is going to be great for the consumer. All of us are going to innovate and compete with each other and provide more and more value to the consumer.
Putting Netflix on a Wii is a great idea, it’s the best selling console in the nation and it’s very family centered and oriented. Obviously going from playing Wii Fit to watching a movie on the same family console is a great marketing strategy. Nintendo even does promotional stuff, like this online one I’ve found for a FREE Wii. Check out the link for more info on how to get it.
http://www.gamesncs.com/rd_p?p=192108&t= 9528&a=13190-wii&gift=3679
