Warner’s Sanders Remains DEG President; Disney’s Chapek Steps Down
The Digital Entertainment Group (DEG) named its new board of directors for the coming fiscal year (Aug. 1 – July 31), while announcing that its chairman, Bob Chapek, was stepping down.
Chapek, who was the group’s president before being elected as its chairman in 2007, advanced at Disney late last year to become the studio’s distribution president. Lori MacPherson, EVP and GM of Walt Disney Studios Home Entertainment, joins the DEG as Disney’s board representative.
TWICE notes that four of the DEG’s five-member executive committee were re-elected, with David Bishop of Sony Pictures Home Entertainment joining the committee as VP. Remaining on the executive committee are: Ron Sanders of Warner Home Video, president; Craig Kornblau of Universal Studios Home Entertainment, VP; Mike Dunn of 20th Century Fox Home Entertainment, secretary; and Eisuke Tsuyuzaki of Panasonic, CFO.
Companies joining the trade group include A&E Television Networks, Amazon.com, IMAX Corp., RealD, Samsung Electronics, SRS Labs, Testronics, and Verance.
Cinram Downsizing PA Plant
Cinram plans to lay off 155 staff at its Scranton, PA-area replication plant in August, following the transition of the Warner Home Video business to Technicolor. The facility currently employs about 1,000 – half the staff that worked there in DVD’s heyday seven years ago. By AP (via CBS)
Warner Ups International Supply Chain Exec
Warner Home Video has promoted Philippe Bastard de Crisnay, its international VP, to the newly created position of SVP International Sales Planning and Operations. De Crisnay now has broad oversight of sales planning and supply chain operations across all of the studio’s international markets, providing procurement, manufacturing, distribution and customer service support to the territory and regional sales teams in conjunction with both their video and games businesses.
The executive also will develop sales planning and supply chain strategies, manage the implementation of systems related initiatives, and facilitate Warner’s transition to Technicolor for disc replication and distribution services. Via Business Wire
Fox, Universal Cut 28-Day Deals With Netflix
Netflix announced agreements with the home entertainment units of Twentieth Century Fox and Universal Studios, in which the service forgoes renting new-release movies from the studios for 28 days in exchange for expanded streaming video licenses.
Among the titles that the studios hope will benefit from the creation of a four-week sales window are Fox’s “Avatar” (released April 22) and Universal’s “It’s Complicated” (in stores April 27).
Through the expanded streaming licenses, Netflix gains Universal titles such as “Gosford Park” and Fox catalog films, along with complete prior seasons of several Fox television series such as “24” and “Bones.”
The new agreements follow Netflix’s first 28-day deal with Warner Home Video, which went into effect in March. There has been little subscriber outcry over the four-week wait to rent Warner’s “The Blind Side” and other new releases.
Meanwhile, Netflix’s stock price was hovering above $80 a share this morning, as investors continue to be wowed by the company’s April 3 introduction of a streaming video app for Apple’s iPad. The stock sold this week for as high as $83.97 a share; current earnings per share are $1.98.
Indeed, Netflix seems to have given up little, if any, brand equity on Wall Street with its delayed DVD acccess deals. “Netflix is a cult stock,” analyst Jim Cramer wrote in a recent blog post. “This stock is loved, and the product is loved, and I cannot countenance selling it even at 31 times next year’s earnings.”
Studios Deal For First Lien On Blockbuster Canada Assets
Continuing its efforts to avoid bankruptcy, Blockbuster has secured new payment terms from Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment, and Warner Home Video. In exchange, the studios receive a first lien on assets of the chain’s Canada subsidiary. As with Blockbuster’s previously announced rental deal with Warner, Fox and Sony also provide new-release movies for rental via the chain’s stores and by-mail channel day-and-date with the movies’ availability for purchase. Via PR Newswire
Cinram, Reporting ’09 Results, Looks To 2010 Opportunities
Cinram reported a 15% decrease in revenue for the year ended Dec. 31, 2009, as a result of lower DVD unit sales and selling prices, combined with lower revenue from CDs, wireless and its Ditan business. In leaving behind the year that was — along with Warner Home Video’s decision not to extend its contract with the replicator — Cinram CEO Steve Brown says that “2010 will hold its challenges, but will also provide us with opportunities.” Cinram
Release Slate Boosts Warner Film Unit In 2009
Time Warner’s filmed entertainment unit recorded $1.1 billion in operating income for 2009, a 32% increase from 2008. Revenues, however, decreased by 3% to $11.1 billion, as a strong theatrical release slate including “Harry Potter and the Half-Blood Prince” and “The Hangover” was more than offset by factors including fewer home video releases and lower video catalog performance.
The company says that its Warner Home Video unit continued to top all other studios last year in DVD sales, Blu-ray disc sales, video-on-demand, and electronic sell-through. Â Time Warner
Technicolor Picks Up Warner DVD Business
Following Cinram’s announcement that Warner Home Video was ending its exclusive relationship with the DVD services company, rival disc manufacturer Technicolor says that it will fulfill the studio’s DVD and Blu-ray replication and distribution needs.
Technicolor announced on Feb. 2 that it expects its new long-term contract with Warner Bros. to start generating material revenue in third quarter of this year. The Paris-based company says that the deal also covers other aspects relating to strategic technology initiatives.
“We are extremely excited to be working with Warner Bros., the recognized world leader in packaged media,” said Frederic Rose, Technicolor CEO, in a statement.
Cinram stated that it would continue to provide services to Warner Home Video through July 31.
Prior to Technicolor’s announcement, a Warner Bros. spokesperson issued a statement saying: “As part of our standard practices, we are constantly looking at the systems we have in place and evolving them to meet our changing needs. The decision to change our video replication and distribution vendor, while difficult to make, is the right one for us at this time.”
Warner Home Video Ends Cinram DVD Supply Deal
Cinram’s long-running, exclusive deal with Warner Home Video (WHV) for DVD manufacturing and distribution services is coming to an abrupt end this summer.
The Toronto-based disc replicator announced Feb. 1 that the studio is exercising its option to terminate its service agreements on July 31. The loss, Cinram says, will directly impact its operations in North America, Mexico, the UK, France, Germany and Spain.
Cinram acquired WHV parent Time Warner’s DVD and CD manufacturing and distribution businesses in 2003, in a $1.15 billion deal that included an exclusive supply contract for WHV’s DVD needs in North America and Europe.
Cinram says that the WHV relationship represented about 28% of the company’s 2009 revenues. Company CEO Steve Brown — who joined Cinram last June, amidst an industry-wide DVD sales decline — told The Wall Street Journal that the loss of the business is “a bump in the road” that will prompt Cinram to seek new ways to cut costs as well as a new studio customer.
Brown added in a statement that Cinram is working with the WHV “to ensure an orderly transition of the services.”
There is no word yet, however, on which company or companies Warner Home Video will now turn to for DVD manufacturing and distribution.
Time Warner plans to announce its full-year 2009 results on Feb. 3. For the first nine months of 2009 (ended Sept. 30), revenues from home video and electronic delivery of Warner’s theatrical products were down 26%, to $1.6 billion.
Analysts: Digital Window Opening After Netflix-Warner Deal
Netflix, which recently agreed to a 28-day embargo for new release titles from Warner Home Video in exchange for greater copy depth and streaming access to the studio’s catalog, is expected to sign a number of additional streaming deals this year as it attempts to appease studios with a greater percentage of its profit margins, says analyst Michael Pachter with Wedbush Morgan Securities. By Home Media Magazine
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