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Analyst Attacks Paramount for High Prices for UltraViolet Movies

Mon Jan 30, 2012 at 02:00 PM ET
Tags: Paramount, Ultraviolet, Industry Trends (all tags)

When the studio launched UltraViolet, there seemed to be a bit of potential in the idea. Based on pricing though, it seems like Paramount doesn’t actually want to sell anything. Frost & Sullivan analyst Dan Rayburn says that Paramount’s way of doing things is completely wrong.

“What studio executive thinks consumers are going to pay $22.99 to stream a movie when we can buy the DVD for $7 or rent it for less than $2?” he writes. “The economics don't make sense.”

A fine example is the 2010 movie ‘The Fighter,’ which sells for $22.99 for an HD version and $16.99 for standard definition. For just a dollar more than the SD UltraViolet version costs, you can order the Blu-ray and enjoy special features and a better picture. For $7.99 you can watch ‘The Fighter’ on Netflix in HD and have an entire month worth of other movies.

“At some point, the studios are going to get burned just like the music industry did,” says Rayburn. “They need to wake up and realize that consumers are demanding digital content for a fair price.”

Source: Home Media Magazine

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Disc Replicators Survive by Adapting to the Digital Market

Mon Jan 30, 2012 at 12:00 PM ET
Tags: Sony, Technicolor, Industry Trends (all tags)

Companies that once provided services for disc based media have made the transition to the digital age.

Replicators – the folks that turn data into a fully pressed Blu-ray disc – aren’t getting the business they once used to. While some are feeling the pinch, others are finding a great deal of success by adapting to the new environment and embracing digital needs.

Sony DADC was one of the early adapters. They formed a New Media Solutions group which works to create content, automate digital distribution and more. Cinram has similarly adapted and now creates bonus features and works in the gaming, mobile, digital and 3D fields.

Technicolor hasn’t been left in the dust – they’ve expanded to solutions that ensure that all your devices play nice when used together. They’ve been working on applications for laptops, tablets and even a 3D certification program.

Read more about the path that replicators have taken in the new landscape at ‘Home Media Magazine.

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CES 2012 Set New Attendance Record and Boasted 20,000 New Product Announcements

Wed Jan 18, 2012 at 10:00 AM ET
Tags: CES 2012, Industry Trends, Microsoft (all tags)

This year's show was the biggest in the history of CES, which certainly bodes well for the industry.

The Consumer Electronics Show may be an industry event but in no way is it industry exclusive. In addition to buyers, execs for big companies, TV news teams and writers, non-professional bloggers and fans find their way into the show. In fact, pretty much anyone who wants to go can find a way in. This year, an additional 13,000 made it to CES.

The addition of 400 new exhibitors to the show was almost certainly instrumental in getting the number up from 140,000 attendees in 2011. All told, over 20,000 new products were announced and launched at the show and more people than ever were there to see them. That's certainly a sign of interest in the industry and something that will hopefully transform into growth.

What should be interesting to see is what happens next year. Microsoft - a CES staple for both its booth and keynote speeches - has already said that it does not plan to return next year. If other companies follow suit, CES 2013 could see a decline.

Source: PC Mag

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Blockbuster Express Customers Rented Better Movies than Redbox Customers in 2011

Tue Jan 03, 2012 at 02:55 PM ET
Tags: Blockbuster Express, Redbox, Industry Trends (all tags)

At the top of Redbox kiosks was the Adam Sandler/Jennifer Aniston movie 'Just Go With It.' Blockbuster's top title was 'Bridesmaids.' The differences get even more glaring from there.

Blockbuster and Redbox released their top rental lists for 2011 and we noticed one very glaring disparity between the two services. Blockbuster Express customers rented generally good films while the folks that picked up movies from Redbox rented the worst of the worst.

We decided to go ahead and math this out using Rotten Tomatoes as an indicator for movie quality. Blockbuster revealed a Top 10 list while Redbox posted the top five in each category. We went ahead and used the top two in each category for Redbox, which seems like a pretty fair way to go about it.

The average rating for Blockbuster Express rentals according to Rotten Tomatoes is an impressive 78.2 percent. 'The King's Speech' sits at the top of the pile with 95 percent while 'Transformers: Dark of the Moon' takes the bottom slot with 35 percent. The latter title is the only one to drop under 75 percent for Blockbuster Express.

By comparison, Redbox averages 50.7 percent. The high for the Redbox titles we used in our calculations was 'Rango,' with a score of 88. It's one of only three titles on the list to score above 75 percent. The lowest rated title is also the number one title rented from Redbox kiosks - the disastrous romantic comedy 'Just Go With It,' starring Jennifer Aniston and Adam Sandler. 'Just Go With It' scored just 19 percent on Rotten Tomatoes.

What this says about the folks that rent from Redbox as opposed to Blockbuster Express customers is up for you to decide.

Source: Home Media Magazine

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Internet Based VOD numbers are Dire, but Streaming on Game Systems on the Rise

Thu Dec 15, 2011 at 07:00 PM ET
Tags: PlayStation 3, Xbox 360, Streaming, VOD, Industry Trends, Smartphones (all tags)

On average, PS3 owners are using a over a third of system time on Blu-rays and streaming.

Two studies came out recently with some very interesting information that seems conflicting at first glance. The first is that, according to the NPD, online VOD purchases are incredibly low. The second is that streaming on videogame consoles is on the rise.

Internet based VOD numbers account for all devices capable of renting a movie online. According to the NPD report, only five percent of those that can rent VODs are doing so. " It’s understandable that smartphone owners might be hesitant to watch a full-length movie with limited screens and battery life," says NPD's Russ Crupnick, "but few of the other connected devices are showing strong uptake for Internet VOD, either."

Game consoles, however, have been seeing increased usage as streaming and entertainment machines. Nilsen says that 15 percent of the time an Xbox user is on the system, they're watching streaming movies. The PS3 accounts for 15 percent as well, while Wii users devote 33 percent of their time to videos.

An impressive 22 percent of time using the PS3 is spent watching DVDs or Blu-rays, which brings the total movie watching time to 37 percent.

Source: Home Media Magazine

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Blu-ray Sales Up 35 Percent in 2011 - Even Stronger Overseas

Thu Dec 08, 2011 at 12:00 PM ET
Tags: Blu-ray Discs, Sales Figures, Industry Trends (all tags)

As you might imagine, 'Star Wars' gave the format quite a boost.

Blu-ray sales are up significantly this year, with growth reaching 35 percent in the U.S. Last year, 85 million Blu-rays were sold. This year the estimate is sitting at 115 million. It's a big step forward and certainly a sign of things to come.

Part of the reason, of course, is the release of 'Star Wars' on Blu-ray. The HD version of the series inspired quite a few first-time Blu-ray disc purchases and spurred on sales of players. What may be even more important is the price of Blu-ray players. Customers are seeing Blu-ray players and DVD players at similar price points and at that point there's no reason to stick with DVD. It's getting to the point that making DVD players seems a bit pointless.

One thing that needs to happen, according to Futuresource analyst Jim Bottoms, is a reduction in the prices of Blu-ray discs. In Europe, where sale growth is even stronger, there's a much smaller difference between DVD and Blu-ray prices.

Source: Home Media Magazine

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Analyst Michael Pachter Says Netflix is Broken - 11 Million Lost Hybrid Subscribers by 2012

Fri Dec 02, 2011 at 01:20 PM ET
Tags: Netflix, Industry Trends (all tags)

Of those 11 million, he predicts that seven million will downgrade their plans and the rest will leave Netflix completely.

Right now, the future of Netflix is unclear. Things could go one of two very different ways for the company thanks to an incredibly aggressive plan for growth. Netflix is expanding to other countries, acquiring new contentw, and doing everything it can to get new customers, but that may be at the root of the problem.

"In our view," writes Michael Pachter of Wedbush Securities, "the company’s business model was broken when it raised prices for its hybrid customers, and continued customer defections will require it to invest ever-increasing amounts in marketing."

Pachter suggests that Netflix will lose 11 million hybrid accounts, meaning accounts that subscribe for both disc delivery and streaming. He says that four million will leave the service and the rest will downgrade to just streaming or just discs. This loss is just the beginning of what Pachter says will be a big loss for Netflix.

Source: Home Media Magazine

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One Third of New Netflix Subscriptions are Returning Subscribers

Wed Nov 30, 2011 at 02:00 PM ET
Tags: Netflix, Industry Trends, Streaming (all tags)

Netflix CFO David Wells knows he can't win everyone back, but Netflix is hoping to do a bit of rebuilding as far as the brand is concerned.

It's no secret that Netflix messed up pretty bad this year. Complain as people did about the price change, it's something that happens every once in a while. It wouldn't have been too big of a deal either if Netflix didn't try splitting their services in two and otherwise confuse and enrage loyal customers.

Internet outrage was widespread, but apparently that outrage was short lived for some people. Out of all the new subscribers Netflix picked up in October and November, 33 percent were returning customers.

CFO David Wells says that Netflix is going to have to work hard to win the rest back. "There is no one big fix that is going to undo this and set the reset button,” he says. “We are under no illusion that it will go away after 90 days."

Source: Home Media Magazine

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Entertainment Spending Up Five Percent - Blu-ray Sales Soar

Tue Nov 01, 2011 at 02:00 PM ET
Tags: Blu-ray, Industry Trends, Sales Figures, High-Def Retailing (all tags)

DVD spending is down significantly, but Blu-ray helped pick up the industry as a whole - if that's not great news for the format, we don't know what is.

The Digital Entertainment Group's latest survey indicates that high definition packaged media is on the rise in a big way. And yes, when they say "high definition packaged media" they clearly mean Blu-ray. Unless there are still HD DVDs floating around out there, but we're just going to go ahead and make the assumption.

Blu-ray disc sales rose by 58 percent this year, with a 60 percent increase in catalog titles like 'Citizen Kane,' 'The Big Lebowski' and, of course, 'Star Wars.' That's great news, but giant sales numbers for titles like this doesn't necessarily mean that the format as a whole is on the rise. We need something more solid, and we got it.

Blu-ray player sales increased by 52 percent over last year. Certainly there are some upgrades in there, but the majority of that seems to be first-time Blu-ray owners, marking a huge shift in mainstream consumer adoption. The DEG puts the number of Blu-ray enabled homes at a whopping 33.5 million.

So how much did Blu-ray help the overall increase in entertainment spending? A lot. Blu-ray was up 58 percent, electronic sellthrough was up 13 percent and VOD increased by five percent. DVD sales are

way down again, rental revenue is down again and brick and mortar stores are hurting. Only one format is truly thriving, and that's Blu-ray.

Source: Home Media Magazine

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Netflix Loses 810,000 Subscribers in Third Quarter of 2011

Tue Oct 25, 2011 at 08:00 PM ET
Tags: Netflix, Industry Trends (all tags)

Raising prices and confusing/angering people with Qwickster made them lose subscribers - who could have guessed?

The folks over at Netflix have something really amazing on their hands that no one could have predicted. They've got an impressive service with a giant subscriber base and it seems like they're at the point where they don't know exactly what to do with it.

That uncertainty has resulted in a series of moves that really upset the subscriber base. First, the company raised prices without adding anything new. People got upset, but price changes happen - it's not the first time and it won't be the last.

Then the folks at Netflix tried to split off the DVD side of the service into a new one called Qwickster. That really didn't go over well and the idea was quickly scrapped. Two big changes in a row was too much for quite a few subscribers and the service suffered for it.

Over eight hundred thousand subscribers have now left the service and, as you might expect, Netflix isn't too happy about it. They're not ignorant as to why it happened though, stating "Our primary issue is many of our long‐term members felt shocked by the pricing changes, and more of them have expressed that by cancelling Netflix than we expected."

Source: Home Media Magazine

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