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TOPIC: shrinking window

Re: shrinking window 27 Dec 2005 09:04 #12051

  • leeler
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A very interesting read.....
http://www.fool.com/news/commentary/2005/commentary05120707.htm

Thinking Outside the Box Office
By Rick Aristotle Munarriz (TMFBreakerRick)
December 7, 2005

When Disney (NYSE: DIS) CEO Bob Iger argued that the film industry should narrow the gap between the time that a new flick hits the big screen and when it is released on DVD, it obviously didn't make theater owners very happy.

Attendance at the local multiplex has dropped for three straight years, and here was the head honcho of a major Hollywood studio threatening to make the theater owners' lives even more taxing. It was hard enough for them already, with folks building out home theaters with high-definition plasma and LCD wide screens, IMAX (Nasdaq: IMAX) luring popcorn-munchers with their larger-than-life treatments of first-run blockbusters, and the existence of a free market outside of their velvet-curtained walls where soft drinks and popcorn sold for pocket change. How dare Iger suggest that the retail market move to a "day and date release" model, in which a DVD or VHS title hits the shelves just as the same movie makes its box office debut?

The industry's backlash came as expected, and it seemed as if Iger was backing down from his comments made at the company's fiscal fourth-quarter conference call last month. Was the coast clear? Was it all a dream? Perhaps he was just floating a trial balloon to see how quickly the industry would hurl darts at his inflated suggestion.

However, in Monday's edition of The Wall Street Journal, Iger is again discussing the possibilities.

"We'll have a conversation with theater owners to see whether we can move them more peacefully," he was quoted in the interview. "But I think in the end, it's going to have to be more by force than through negotiation or diplomacy."

It's no longer a trial balloon. It's the Hindenberg.

Lights! Camera! Faction!
Iger's reasoning is sound. Why should a movie studio spend money to promote a film during its theatrical run only to have to pitch it again six months later, when it rolls out for the home video market? More and more these days, you see studios using their current-release print ads to advertise upcoming DVDs. It's a waste of money. But it's even worse than just that.

More than 10,000 new DVD titles have been released this year, yet just a little more than 400 of those have been recent theatrical releases. Television shows, direct-to-video ventures, and older flicks have flooded the slate. It's harder for a new DVD to stand out these days. We found that out when both Pixar (Nasdaq: PIXR) and DreamWorks Animation (NYSE: DWA) this year announced higher-than-expected unsold product returns of their latest hits.

That's why Iger is so anxious to strike while the projector's still hot. Would the crowds stay away from the theater this weekend if they could snap up Narnia at a Disney Store? It would likely have a negative impact, sure. However, Disney would probably sell far more copies now with the buzz still reverberating than it would next summer with a second ad campaign.

As long as the movie is fresh, it will be that much more valuable to a consumer and that much more likely to stand out against a crowd of tens of thousands of competing titles. The move would also do wonders in wiping out pirated bootlegs.

Making nice at the multiplex
Elective euthanasia isn't in the cards for the movie theaters. They would put up a fight initially and would probably even refuse to show a renegade picture. They would need to send a message to rival studios that their hallowed aisles are sacred.

But Iger has thought that out, too. One of Disney's ideas was to have movie theaters sell the DVDs. If you caught Narnia and were pumped enough to buy the disc at the theater itself, it would be far more lucrative than the thin slice of box office revenue that movie theaters keep during a film's opening week.

It shouldn't stop there, of course. Theater chains should already be setting up kiosks inside to sell movie-related merchandise. Recently, I took the industry to task for wallowing in self-pity for what has been a self-inflicted wound. Even before audiences started to sour on a night at the movies, the history of the multiplex operators has been filled with bankruptcy reorganizations and sector consolidation, coated with a deep-fried layer of stagnancy. There aren't too many publicly traded chains these days once you get past Carmike (Nasdaq: CKEC) and Regal (NYSE: RGC).

Iger suggests allowing day-and-date releases based on the prospects of DVD sales, and I'll argue that related video games, plush toys, soundtracks, T-shirts, and movie posters should be sold right alongside the flick itself. It's only logical. It's how live theater gets it done. When my wife took my son to see Blue Man Group this past summer, he came back with a CD. And a T-shirt. And a poster. I doubt that he would have bought any of those impulse items a week later. A film house is an experience peddler, and that buzz lasts about as long as it takes for the exit door to swing open.

In-theater merchandising would obviously help the movie studios, too. The chains would have an attractive revenue stream and gain more leverage with the film industry as an outlet for licensed goods, but Hollywood naturally wouldn't mind the merchandising royalties. That's also why the movie studios may have to be the ones to initiate the process. Too many nervous theater operators are too busy sweeping the floor of their nibbled fingernails to innovate. For example, the digital distribution of new films to the movie chains makes perfect fiscal sense, yet it's been a slow adoption process for an industry that won't even bother to rearrange the deck chairs on their sinking ship.

They're just not trying. If you walk into a theater that's offering the same bland ballpark concessions that they have for decades and a few video games out front, please do the industry a favor and vote with your feet. Force the dinosaurs to think outside the box office.

Iger is proposing something radical. The skeleton key to unlock that inevitability may be more radical still, like setting up localized revenue pools where theater operators that do play along with day-and-date releases get to split the pot of territorial merchandising sales. If it's just a matter of greasing the box office split so that it favors the theater owners earlier on, then it's just the movie studios that aren't thinking creatively enough.

The point is that movie theaters don't have to die unless they want to. For investors, there may even be some attractive situations here. IMAX was a Motley Fool Rule Breakers recommendation earlier this year, in part because it is improving the value proposition of first-run releases at its growing chain while giving theater owners a fighting chance with economically feasible retrofits of their existing multiplexes. Content will also be a big winner, and it's why Pixar, DreamWorks Animation, and Time Warner (NYSE: TWX) have all been recommended by the Motley Fool Stock Advisor newsletter service.

Get it together, theater chains, before you too fade to black.
"What a crazy business"
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Re: shrinking window 10 Jan 2006 16:34 #12052

  • reelman
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And the window closes some more.
http://www.dvdexclusive.com/article.asp?articleID=2636

LAS VEGAS--20th Century Fox is developing a plan to release its movies in high-definition just 60 days after theatrical release, according to News Corp. president-COO Peter Chernin.

Giving a keynote address at an invitation-only dinner here Friday at the Consumer Electronics Show, Chernin said Fox also is preparing plans to make movies available via video-on-demand simultaneously with their release on DVD--the first time a major studio chief has committed to eliminating the traditional window between home video and VOD.
Chernin said Fox has not yet determined the delivery platform for the newly created high-def window between theatrical distribution and home video release. High-definition can be delivered via cable, satellite, the Internet and soon digital discs.

A spokeswoman of Fox parent News Corp. declined to provide further details of the plans, and Chernin left the dinner without taking questions.

The news comes just three weeks before Mark Cuban makes his revolutionary debut of Steven Soderbergh's Bubble in 20 of Cuban's Landmark theaters on Jan. 27, nearly simultaneous with the premiere of the movie on the high-def HDNet Movies channel and on DVD on Jan. 31.

Chernin's address capped a week of aggressive digital delivery announcements by Fox companies, including plans to make The Shield and Rescue Me available several days in advance of their weekly debut on FX to customers who adopt News Corp.'s new DirecTV digital video recorders. The studio's home video unit also announced plans to release the first movies in the new high-def digital disc format called Blu-ray Disc two weeks prior to the introduction of the first Blu-ray machine sometime this spring or early summer.

Fox home entertainment officials said after Chernin's speech that high-def movies would be available for one-time viewing only in the new window, indicating that the likely means of delivery would not be on disc.

20th Century Fox Home Entertainment president Mike Dunn said the move to introduce the new premium high-def window could happen within a matter of months.

Chernin's appearance at the "Leaders in Technology" dinner marked the first time an executive from a content-producing company has addressed the annual bread-breaking between technology companies and public policymakers, hosted by the Consumer Electronics Assn. at CES.

Chernin said he was seizing the opportunity to try to reverse the impression among many in the technology community that News Corp. is resistant to technological change.

"This is an electrifying moment for the CE and IT industries," Chernin said. "And I'm here with a message that may sound counter-intuitive: It's an even more electrifying time for content companies."

Chernin said Fox also is in advanced discussions with Apple and Sony to make Fox TV episodes available for download through the iTunes and Sony Select online services.

His latest comments were in sharp contrast to some of his earlier remarks, in which he has sharply criticized technology companies for not doing enough to help stem widespread piracy of movies and music.

At CES, however, he sounded conciliatory.

"We have no intention of wasting the opportunity you and your companies have created," Chernin said.

The News Corp. exec appeared to extend an olive branch on the question of copy-protection, declaring, "We have to work together to make sure these new devices provide a secure home for our content."
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Re: shrinking window 24 Jan 2006 21:58 #12053

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I had previously posted a couple of items in this thread concerning Mr. Iger at Disney and his moves since assuming the helm. Here's another piece of the puzzle and this could be huge. What happens when Bob takes the plunge and releases his new partners latest sure-to-be-hit day and date? Watch out because I predict it will happen within a very short time.
http://abcnews.go.com/Business/story?id=1536674&page=1&ad=true

Jan. 24, 2006 — The Walt Disney Company took a big step today toward bolstering its position in the film business. It has agreed to purchase Pixar Animation Studios for $7.4 billion. The deal combines Pixar with Disney's animation unit and represents the union of two huge forces in animation: the old world of films and the new.

Pixar CEO Steve Jobs will become Disney's largest shareholder, which gives him an extraordinary position at the confluence of technology and entertainment, computers and film, as well as a commanding presence in the music industry through Apple's iTunes Music Store. Jobs will also be appointed to Disney's board of directors.

For Disney and new CEO Robert Iger, the deal secures what has been a hugely valuable source of animated hits.

The purchase is an all-stock deal in which 2.3 Disney shares will be issued for each Pixar share. The sale is expected to completed by the summer.

In recent years, Disney, the parent company of ABC News, has struggled to produce the types of blockbuster animated movies that the company built its reputation on. Disney hopes the deal will give it the most dominant animation-production house in the industry. In past joint productions, Disney-Pixar films have generated more than $3 billion, and include hits like the "Toy Story" series and "The Incredibles." The company hopes that purchasing Pixar will again make Disney the dominant player in the animation field.

The partnership between the two companies had deteriorated in recent years when Jobs openly feuded with longtime Disney CEO Michael Eisner. Robert Iger, who succeeded Eisner as Disney's CEO in October, made a priority of smoothing over relations with Jobs, and was in the midst of renegotiating the distribution pact, which expires in June with the release of "Cars."

In an interview with ABC News after the announcement, Jobs acknowledged Iger's role in making the agreement happen.

"What this is really about is buying into Bob Iger's vision of where Disney is going," Jobs said. "I couldn't have imagined this happening a year or two ago."

Though Jobs developed a reputation as a strong-willed leader during his time at the head of both Apple in Pixar, he said his role on Disney's board will be to support the CEO.

"My role is to help Bob in any way that he needs," Jobs said.

Iger and Jobs also discussed the role that Apple could play as a distribution arm for Disney entertainment. Disney already has an agreement that makes some of Disney's entertainment programming available for sale at Apple's iTunes music store.

"Technology is providing different way to distribute entertainment and different ways for people to access it," Iger said. "Our deal with Apple and iTunes is a perfect example of that, and I think we'll continue to more forward."

The combined company is expected to maintain the basic working structure that Disney and Pixar relied on before, with Disney providing distribution and co-financing for Pixar's computer-animated features.

One of the questions surrounding the negotiations was what would happen to Pixar Executive Vice President John Lasseter, who has a track record of producing money-making movies. Lasseter will become the chief creative officer of the animation studios, as well as principal creative adviser at Walt Disney Imagineering.

Pixar shares have risen since late last year, as rumors of a possible merger or distribution deal with Disney attracted traders to the company's stock. Some analysts suggest that much of the "premium" Pixar shareholders could expect from a merger is already priced into the company's market capitalization.

For the Walt Disney Co., one of major challenges facing Iger is to bolster Disney's stock price, which has stagnated in recent years. Aside from bringing together the companies' entertainment, technology and distribution capabilities, as well as adding a powerful corporate personality to the Disney environment, Iger said the main goal of the deal was to return to Disney's roots of creating popular animated characters and movies.

"This is about making great films more than anything else. This is more about a content play than anything else," he said.
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