Looking to combat Netflix’s recent subscription streaming service launch, French supermarket chain Carrefour Jan. 27 announced the launch of Nolim Films, a digital platform offering electronic sellthrough and transactional VOD access to 3,000 movies and TV shows.
French users for the first time can register and access content stored in the cloud-based UltraViolet locker.
The French chain said it is looking to attract home entertainment consumers with new-release movies and episodic TV programing not available on SVOD.
Notably, Boulogne-Billancourt-based Carrefour, which operates 10,000 stores globally, including 4,800 in France, is offering consumers the “Day After US” app that enables episodic access to select American TV shows the day after their initial broadcast in the United States.
Titles can be rented for €1.99 ($2.26) for 48 hours or purchased from €4.99 ($5.67) each. Content can be accessed via Tablets, smartphones, PCs or connected televisions.
Carrefour also becomes the first French retailer offering movie discs with UltraViolet functionality — the cloud-based content storage locker with more than 21 million registered accounts. UltraViolet codes from titles purchased at Carrefour or third party retailers can be registered at www.nolim.fr.
Carrefour is the third-biggest packaged-media retailer in France with more than 7 million DVD and Blu-ray Disc titles sold in 2013.
The chain ended 2014 with $95.5 billion in global revenue, including the first positive uptick in non-grocery revenue in six years.
HBO Home Entertainment has launched a campaign aimed at selling digital access (with UltraViolet functionality) to select TV series inside a retail store. The pay-TV channel is marketing the $23.99 HBO Digital HD card at special point-of-purchase displays at Costco Wholesale stores through the end of January.
Costco, which is the nation’s fifth-largest retailer, operating more than 550 stores and generating $64 billion in fiscal 2013 revenue, has been a significant retailer of packaged media, including HBO content.
Consumers can choose from HBO series including “Game of Thrones,” “True Blood,” “Boardwalk Empire” and “True Detective,” which are redeemable via the Flixster Movie Store. Both HBO and Flixster are owned by Time Warner.
Industry-backed UltraViolet enables consumers to access the shows and movies (after registration) from the cloud via any UV-compatible website.
HBO eyes the Digital HD card as a starter kit for consumers who want to test the waters of digital ownership to start their collections. The card also doubles as a gift card, since the recipient can choose the program that he or she wants to download.
“So many consumers still head to their local brick-and-mortar retail store to purchase their favorite TV shows and films on Blu-ray Disc and DVD. Our HBO Digital HD card is an exciting new way to integrate the digital product in a physical environment,” Sofia Chang, EVP and GM of HBO Home Entertainment, said in a statement.
While brick-and-mortar retailers selling digital access to entertainment isn't new, the HBO Digita HD card offers an alternative. Purchase of the card enables the consumer to choose from a selection of content. By comparison, Best Buy markets digital access via CinemaNow to individual content on store shelves, a strategy duplicated by Target through its Target Ticket online service.
Last year, Walmart launched a platform designed to simplify the process for consumers to get access to digital versions of packaged-media purchases.
Dubbed “InstaWatch,” the platform enables a consumer of a DVD or Blu-ray Disc movie purchased at Walmart to scan the store receipt through a special "SavingsCatcher" app on a mobile phone to access the digital file on Vudu.com.
"Our [HBO Digital HD] card is designed to give the consumer a choice of multiple titles – which is not something you can get at any of these other retailers at the moment," said an HBO spokesperson.
Blinkbox, the electronic sellthrough movie and TV show platform owned by British supermarket chain Tesco, has been sold to telecom TalkTalk. The service will form part of TalkTalk TV, the telecom’s platform with more than 1.2 million customers.
Financial details of the deal were not disclosed.
The transaction has been in the works ever since Tesco found itself embroiled in an internal accounting debacle. CEO Dave Lewis is under pressure to right the supermarket retailer after it recently disclosed overstating half-year net income by more than $400 million. The news sent Tesco’s stock plunging and resulted in the government conducting an investigation to see if senior officials at Tesco “cooked the books” to mask slumping profits.
Blinkbox co-founders Adrian Letts and Michael Comish said they expect the digital platform to continue with little interruption.
“As we enter a new chapter, we are excited by the prospect of Blinkbox joining the TalkTalk family and complementing their strategy of being the best value for money TV, broadband, mobile and home phone provider in the U.K., offering customers flexible access to the widest range of free and paid-for content,” Letts and Comish said in a statement.
Blinkbox was the first digital platform offering access to the fourth season of HBO’s “Game of Thrones” within days of the conclusion of its initial broadcast last year. Last October, it became the first official UltraViolet vendor for the cloud-based digital locker in the United Kingdom.
UltraViolet is backed by a consortium of more than 70 companies, including Sony Pictures Home Entertainment, Warner Bros. Home Entertainment Group, Universal Pictures Home Entertainment, Paramount Home Media Distribution and 20th Century Fox Home Entertainment.
Blinkbox, which offers more than 10,000 digital titles for retail and rental, is considered a key driver in consumer adoption of UV in the United Kingdom. The platform has generated more than 1.5 million registered accounts in the U.K. without a formal launch, according to the Digital Entertainment Content Ecosystem (DECE), which manages UltraViolet.
While digital revenue surged, more consumers in the United Kingdom bought and rented DVD and Blu-ray titles in 2014, according to year-end data from the British Video Association.
With the U.K. the third-largest home video market in the world, total retail sales topped £1.43 billion ($2.1 billion) in 2014 with DVDs and Blu-ray accounting for 89% of spending — the remaining on Digital HD.
Video rentals and subscriptions were estimated to be £755m ($1.1 billion), with pay-TV, on-demand and Internet subscription services (i.e. Netflix and Amazon Prime Instant Video) accounting for 81% of revenue, and the balance being disc rentals.
“Video is as popular as it has ever been despite competition for consumers’ time and money. Research shows that video discs represent an emotional purchase and form of owning content that can be enjoyed again and again. Shoppers are choosing new ways to buy such as Digital HD downloads and renting on demand, but these figures show that DVDs and Blu-rays are still the most popular way to watch and own video,” BVA chief executive Liz Bales said in a statement.
Indeed, some 22 million Brits bought a video to own on disc or as a Digital HD download during the year, more than those that visited the cinema (16 million). Meanwhile 7.5 million people rented a video, according to shopping analysts Kantar Worldpanel.
“Digital consumption of video continues to grow at a prestigious rate in the U.K. Not least of these channels is digital retail. Thanks to industry initiatives such as early releasing (Digital HD), the platform has maintained an impressive growth rate, forecast at 25% in 2014,” Richard Cooper, head of video analysis at IHS, said in a statement.
Top-selling discs in 2014 (DVD and Blu-ray)
1. Frozen (Walt Disney Studios Home Entertainment)
2. The Hobbit: The Desolation Of Smaug (Warner Home Video)
3. The Lego Movie (Warner)
4. The Hunger Games: Catching Fire (Lionsgate U.K.)
5. Mrs. Brown’s Boys – D’Movie (BBC Home Entertainment)
6. Guardians of the Galaxy (Disney)
7. Gravity (Warner)
8. The Wolf of Wall Street (Paramount Home Media Distribution)
9. The Inbetweeners Movie 2 (Channel 4 DVD)
10. Thor: The Dark World (Disney)
Perhaps it’s fitting that a movie about the largess of personal greed on Wall Street should be the most-pirated movie in 2014.
Martin Scorsese’s theatrical screed The Wolf of Wall Street, with Leonardo DiCaprio, was illegally downloaded more than 30 million times, according to piracy-tracking firm Excipio and reported by Variety.
The Paramount Pictures release narrowly edged out Walt Disney Studio’s Frozen and Fox’s RoboCop at 29.9 million downloads each, respectively.
The remaining Top 10 pirated movies included Warner's Gravity (29.4 million) and The Hobbit: The Desolation of Smaug (27.6 million); Marvel’s Thor: The Dark World (25.7 million) and Captain America: The Winter Soldier (25.6 million); Lionsgate’s The Legend of Hercules (25.1 million); and Fox’s X-Men: Days of Future Past (24.4 million) and 12 Years a Slave (23.7 million).
Notably, Sony’s infamous buddy comedy The Interview was illegally downloaded more than 900,000 times during its Christmas Eve digital launch.
Meanwhile, HBO’s perennial pirate favorite TV show “Game of Thrones” again ranked atop the list for the third year in a row with 8.1 million illegal downloads, according to BitTorrent.
Runner up was AMC Networks’ “The Walking Dead” with 4.8 million illegal downloads, followed by CBS’s “The Big Bang Theory” (3.9 million) and “How I Met Your Mother” (3.5 million). Other pirated favorites included Fox TV’s new Batman prequel series “Gotham” (3.2 million); The CW’s “Arrow” (2.9 million); ABC’s “Grey’s Anatomy (2.8 million); History Channel’s “Vikings” (2.7 million); USA Networks’ “Suits” (2.5 million); and Comedy Central’s “South Park,” with 2.4 million illegal downloads.
With HBO launching a standalone subscription streaming service this year, it remains to be seen how that affects “Thrones” piracy going forward. To date, HBO has only licensed select catalog programming to Amazon Prime Instant Video.
“Big Bang Theory” and “HIMYM” are available on CBS’s nascent subscription streaming service CBS All Access, while “Walking Dead,” “Gotham” and “Arrow” are aligned with Netflix.
“Vikings,” “Suits” and “South Park” are available on Hulu Plus.
The aforementioned movies and TV shows are all avaialble on disc for sale and rental.
Sony Pictures Dec. 31 announced access to ‘R’-rated buddy comedy The Interview has been expanded to major cable, satellite TV and telecom operators, including Comcast, Time Warner Cable, Cox Communications, Charter Communications, Verizon and AT&T U-verse, among others.
The infamous $44 million comedy from Seth Rogen and co-starring James Franco about a pair of bumbling TV producers who score an interview-turned-assassination attempt on North Korean leader Kim Jung-un has been at the center of a month-long hack against Sony Pictures.
The film, which has generated $3.3 million at the box office (through Dec. 30), in addition to about $15 million in digital retail and rental sales (a record for Sony), is also now available on DirecTV, Verizon FiOS, and Walmart’s Vudu.com. The Interview rents for $5.99 and sells for $14.99.
The cyber terrorists, who call themselves Guardians of Peace and have now reportedly threatened a major U.S. cable station, vowed harm to moviegoers earlier this month, which prompted four of the nation’s largest theater operators to scuttle a planned Christmas Day launch. Sony then worked out a Christmas Day theatrical bow with 301 indie theaters, in addition to digital sellthrough and rental access Christmas Eve on select online platforms.
The Interview is expanding to 580 indie theaters Jan. 2.
“We have always sought widest possible distribution for [the movie], and want to thank our new partners for helping us make that happen,” Michael Lynton, CEO of Sony Pictures, said in a statement.
As expected, Sony Pictures on Christmas Eve began offering controversial comedy The Interview on select electronic-sellthrough and transactional video-on-demand platforms, including Google Play, YouTube Movies and Xbox Video, among others.
The ‘R’-rated buddy comedy from Seth Rogen and co-starring James Franco about an interview-turned-assassination attempt on North Korean leader Kim Jung-un, can be rented for 48 hours for $5.99 or purchased for $14.99.
The movie, which has been at the center of a month-long siege on Sony Pictures by cyber terrorists, will also begin screening nationally Christmas Day on more than 300 independent theaters.
“After discussing all the issues, Sony and Google agreed that we could not sit on the sidelines and allow a handful of people to determine the limits of free speech in another country,” David Drummond, SVP of corporate development and chief legal officer with Google, said in a statement.
President Obama praised Sony’s decision to release the movie digitally.
“As the president made clear [Dec. 19], we do not live in a country where a foreign dictator can start imposing censorship here in the United States. With today’s announcement, people can now make their own choices about the film, and that’s how it should be,” Eric Schultz, deputy press secretary at the White House, said in a statement.
The Interview, with a $44 million production budget, was originally set for nationwide theatrical launch on Christmas. That plan was scrapped after the hacker group calling itself Guardians of Peace threatened to harm moviergoers, and, as a result, four of the nation’s largest theater operators canceled screening the movie.
Sony Pictures CEO Michael Lynton said releasing the movie was essential to the future of the studio following the hacking that exposed company data, unreleased movies and confidential employee information.
“We chose the path of digital distribution first so as to reach as many people as possible on opening day, and we continue to seek other partners and platforms to further expand the release,” Lynton said in a statement.
As expected, Apple Dec. 8 announced Walt Disney Studios Home Entertainment’s Frozen as the top-selling download title on iTunes in 2014.
The animated box office hit has been a global cash cow for home entertainment, dominating packaged media, music and consumer goods retail sales. Apple added that Frozen's Oscar-winning theme song, “Let It Go,” was the eighth-most-downloaded song of the year, and the “Frozen Free Fall” and “Frozen: Storybook Deluxe” apps were top downloads on the App Store.
Disney’s Guardians of the Galaxy is the top-downloaded movie on iTunes, despite being released digitally just three weeks ago. Notably, Amazon ranks Guardians as the most popular packaged-media release based on preorders. The title streets Dec. 9.
HBO Home Entertainment’s Game of Thrones: Season 3 is the top downloaded TV show of the year. Sony Pictures Home Entertainment’s Breaking Bad: The Final Season is fourth on the list.
Upscale movie server company Kaleidescape Dec. 4 announced the launch of Alto, a cloud-based movie player with more than 8,500 movies and 1,600 TV show seasons from Warner Home Video, Sony Pictures Home Entertainment and Universal Pictures Home Entertainment, among others.
Alto retails for $2,495, which is significantly less than the $4,000 Cinema One streaming media player Kaleidescape bowed earlier this year — the latter a 2014 CES Innovations Design and Engineering Awards Honoree in the home audio/video components category.
Like Cinema One, Alto claims to stream content in 1080p Blu-ray resolution quality. In addition to an engaging user interface, Alto stores downloaded content on a hard drive — up to 100 movies in Blu-ray (1080p) quality, and 600 movies in DVD quality (720p).
Alto offers users the ability to upgrade their DVDs and Blu-ray discs to digital versions downloaded from the Kaleidescape Store.
“We help consumers discover and enjoy the finest movies, and we help the studios develop the emerging electronic-sellthrough market segment,” CEO Cheena Srinivasan said in a statement.
As expected, the amount of time Americans spend watching broadcast television declined more than 4% (12 minutes) in the third-quarter compared with the prior-year period, according to new data from Nielsen.
The average consumer over the age of 18 still watches 4 hours and 44 minutes of TV every day. Time-shifting content (using a DVR or video-on-demand technology) continues to resonate — albeit slowly at 30 minutes a day. That’s up just two minutes compared with the third quarter in 2013.
Meanwhile, the daily time spent using a smartphone increased 23 minutes, from 1 hour and 10 minutes to 1 hour and 33 minutes per day. DVD and Blu-ray player usage remains unchanged at nine minutes per day — more than double the four minutes spent using a streaming media device.
“The evolving media landscape has not lessened consumer demand for professionally produced content. What has changed is the number and reliability of new media available to viewers,” Dounia Turrill, SVP of insights at Nielsen, said in a statement. “What used to be a schedule to watch programming now seems like little more than a suggestion.”
Meanwhile, radio consumption remains strong at 2 hours and 44 minutes per day, which is down just three minutes year-over-year. Time spent accessing the Internet via a computer increased 6% to 1 hour and 6 minutes. Using a video game console increased 20% to 12 minutes per day.
Among racial and ethnic groups, Nielsen found that black viewers watch the most broadcast TV at more than 201 hours per month. Hispanic and Asian American viewers watch about 117 and 82 hours monthly, respectively.
Indeed, Asians watching over-the-top video increased 17% — underscored by the fact tablet penetration among Asian-Americans also rose 17% during the period.
BitTorrent, the file-sharing platform often associated with illegal downloads of movies and music, says its users actually purchase or rent more content than the average Internet user.
The platform said 52% of 2,500 respondents in an online survey conducted in September said they bought or rented at least one movie in the past month. Another 16% said they acquired or rented at least one movie in the past few days; 12% in the past week; and 17% in the past six months.
BitTorrent said users spend an average of $54 a year on movies, with 35% of respondents spending more than $100. Notably, 60% of respondents said they buy or rent movies on disc.
Most popular genres include action at 32%, comedy (16%), Sci-Fi (15%), drama (11%), horror and romance at 5%.
Broken down by activity in the past year, 47% of respondents said they watched a movie in the theater; 38% said they bought a DVD or Blu-ray Disc title; 23% utilized a subscription streaming service; 23% bought a digital movie; 22% said they rented a disc; and 16% said they bought a transactional VOD movie rental.
Indeed, BitTorrent contends allowing its users access to digital movie content, trailers and sneak peaks enhances the chances for retail transactions.
In 2013, Cinedigm partnered with BitTorrent to offer free seven-minute opening clips of Arthur Newman, starring Oscar winner Colin Firth and Golden Globe winner Emily Blunt, four days before the indie launched theatrically.
While sneak peaks and clips of theatrical releases online aren’t new, offering legitimate content on a file-sharing network synonymous with piracy represented a twist — and leap of faith among a movie distributor.
It also underscored BitTorrent’s efforts to legitimize a reported user base of 170 million. Movie studios lost nearly $2 billion in revenue on potential disc sales for the top 10 pirated movies of 2012, according to a recent research report, which cited data from BitTorrent.
“We’re able to connect Cinedigm with real movie fans that actively support content creators and by doing so BitTorrent can demonstrate how we add value through continued innovation,” Shahi Ghanem, chief strategy officer of BitTorrent, said in a statement last year.
B. Riley & Co. analyst Eric Wold said the promotion with BitTorrent enabled Cinedigm to look for creative ways to effectively promote their indie films to the right audiences and for the right cost.
“Cinedigm is not held to the traditional marketing/promotional ways of other studios,” Wold said.
Entertainment network Epix Nov. 25 announced it has launched a TV Everywhere app on Google Chromecast.
Though a bit lost in the crush toward subscription streaming and over-the-top video, Epix, which is co-owned by Lionsgate, Metro-Goldwyn-Mayer Studios and Paramount, was the first pay-TV network to launch on Xbox 360, PlayStation, iOS, Android tablets, Windows 8.1 and Roku players.
Authenticated subscribers have access to more than 3,000 movies, including the "Hunger Games," "James Bond" and "Star Trek" franchises, plus original programming such as documentaries “The Road to the NHL Winter Classic” and “The Road to the NHL Stadium,” Russell Brand: Messiah Complex and “Hollywood Sessions,” co-produced with the Los Angeles Times.
“The marrying of Epix with Chromecast’s easy-to-use device offers a unique and unparalleled experience. With this partnership, we’re continuing to build on our momentum of delivering great programming how, when and where viewers want to see it,” Keary Hanan, SVP digital programming and production, said in a statement.
Aereo TV, the shuttered subscription-based digital TV broadcaster whose business model was thwarted by the U.S. Supreme Court, has filed for Chapter 11 bankruptcy protection.
Chapter 11 will permit Aereo to maximize the value of its business and assets without the extensive cost and distraction of defending drawn out litigation in several courts.
Aereo has appointed Lawton Bloom of Argus Legal LLC in Virginia to serve as Aereo’s chief restructuring officer during this period.
In a Nov. 21 post on its website, founder and CEO Chet Kanojia said the reversal of the Second Circuit Court of Appeals decision in June by the top court proved too difficult an obstacle.
“The Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty. And while our team has focused its energies on exploring every path forward available to us, without that clarity, the challenges have proved too difficult to overcome,” Kanojia wrote.
Aereo TV launched three years ago in Manhattan, N.Y., offering subscription service for live and on demand access to local TV broadcasts on portable devices via micro antennae. Aereo’s legal claim was that its technology was simply capturing free over-the-air digital signals — something televisions in the past did with rabbit ear antennae.
Broadcasters and media companies didn’t agree. This set off a series of litigation with Aereo winning battles in the federal district courts of New York and Boston and the Second Circuit Court of Appeals.
CBS CEO Les Moonves, a vocal critic of Aereo, lauded the technology but characterized the service as theft of copyright material.
Regardless, Kanojia said Aereo has helped evolve TV distribution as evidenced by the flurry of over-the-top video services and on-demand platforms coming to market.
“We feel incredibly lucky to have had the opportunity to build something as meaningful and special as Aereo. With so many shifts and advances in technology, there has never been a more perfect time to take risks, challenge the status quo and build something special,” Kanojia wrote.
Vudu.com has joined Disney Movies Anywhere as a participating retailer, allowing movie fans to access their DMA content through the Walmart-owned digital movie service.
Disney Movies Anywhere (www.disneymoviesanywhere.com), which launched in February with about 400 Disney, Pixar and Marvel titles, utilizes a proprietary cloud-based storage platform, while Vudu is compatible with a number of digital platforms, including UltraViolet — the cloud-based platform supported by other studios.
The agreement coincides with Disney's Nov. 18 launch of the sing-along edition of animated hit Frozen, as well as the digital version of Marvel’s Guardians of the Galaxy (available on disc Dec. 9), which are available through Vudu (www.vudu.com/dma).
“In addition to its robust digital video service, Walmart is a top destination for Blu-ray and DVD purchases, and bringing Disney Movies Anywhere to Vudu enhances the value of those purchases,” Janice Marinelli, president of Disney Studio in-home and digital distribution & Disney-ABC content Distribution, said in a statement.
Prior to the deal, some Disney Movies Anywhere codes included with new Blu-rays could also be redeemed at Vudu, allowing consumers to store Disney films at both locations. This new agreement directly links a consumers' accounts to both services.
Disney Movies Anywhere, which bowed with Apple’s iTunes iOS operating system, earlier this month expanded availability to Google Play, which uses the competing Android operating system.
For a limited time, users who connect a participating digital retail account receive a free digital copy of Disney’s Wreck-It-Ralph.
“Vudu’s availability across in-home entertainment devices like smart TVs, Roku 3, Xbox One and PlayStation 4 as well as Apple and Android smartphones and tablets means Disney fans can now enjoy their movies on more devices than ever,” Jeremy Verba, GM of Vudu, said in a statement.
SANTA MONICA, Calif. — On Sept. 5, independent distributor Gravitas Ventures released the Olivia Wilde and Jason Bateman comedy-drama The Longest Week day and date in both theaters and on VOD and electronic sellthrough via digital platforms.
And while the film pulled in almost nothing on the big screen, it made “a few million” via digital, according to Gravitas CEO and founder Nolan Gallagher. Indeed, according to Rentrak data covering digital sales and rentals, The Longest Week quickly hit No. 14 on its top 20 EST and VOD list (for the week ended Sept. 14).
Speaking Nov. 11 at the American Film Market conference, Gallagher said people are consuming VOD in record numbers, especially on mobile devices, and that it’s become increasingly important for film distributors to treat a digital release with the same gravitas as theatrical.
“Getting the film up there, online, that’s possible,” Gallagher said. “It’s a matter of aggregating your audience ahead of time. Treat your VOD debut the way you’d treat your theatrical debut, and there can be real money in it.”
Paul Davidson, SVP of film and TV for distributor The Orchard, can attest to that. His company released the documentary film Harmontown, about writer-comedian Dan Harmon, in early October. The film follows Harmon on tour for his podcast series, which regularly pulls in more than a million listeners.
“When you have a community around [a property], you can plan a release around it. That’s very appealing,” Davidson said. “It’s easier to get to ‘my audience,’ a small cross-section. That’s realistic in the short term.”
But in theaters, across digital platforms, day and date? That’s just not so simple for independent filmmakers.
Still, getting on VOD platforms is easier than ever, thanks to the investments made by companies to remove the barriers for entry, according to Doug Sylvester, president of multiplatform video services company Vubiquity.
“What then becomes the issue is getting noticed,” Sylvester said. “More and more owners of content … have to take on that responsibility.”
Amazon, Netflix and iTunes have done a masterful job of knowing the consumers using their services, Sylvester said. However, they don’t share that data very quickly with everyone else. “You can get a very clear picture [of data] across platforms, but you’re looking back six months,” he said.
There’s a reason for that, according to John Sloss, founder of New York-based film and media advisory services company Cinetic Media. “The people who hoard data, keep it secret, profit off it,” Sloss said.
Upscale movie server company Kaleidescape Nov. 11 announced it entered into a license agreement with Universal Pictures Home Entertainment for electronic-sellthrough rights to 1,000 movies and 210 TV show seasons.
The transaction brings to 8,500 movies and 1,600 TV seasons available for download on the Kaleidescape Store.
Kaleidescape said its online store features new recommendation software, as well as a link enabling users to access digital versions (for a fee) of their DVD and Blu-ray Disc collections stored in the cloud.
The Kaleidescape Store, which serves all Kaleidescape Systems in the United States and Canada, also facilitates cloud-based UltraViolet functionality.
The agreement includes Bridesmaids; films from the "Bourne," "Jurassic Park" and "The Mummy" franchises; in addition to Despicable Me, Hop and Curious George. Additionally, award-winning television series such as “The Office,” “30 Rock” and “House” are available.
“Kaleidescape is focused on the overall experience in purchasing, choosing and watching movies at home … for families who own a personal movie library,” Michael Bonner, EVP of digital distribution for Universal Pictures Home Entertainment, said in a statement. “We like to support innovative companies within the UltraViolet ecosystem, and Kaleidescape is well-known for its innovative products and services.”
While home entertainment executives continue to talk up digital downloads of movies and TV shows as a growing, and increasingly lucrative, trend, Blu-ray Discs and DVDs remain the industry’s proverbial cash cow, at least in the sales end of the business.
U.S. consumer home entertainment spending in the third quarter of 2014 was essentially flat with last year’s third quarter, coming in at an estimated $3.92 billion, down 1.2% from the $3.97 billion consumers spent in the third quarter of 2013, according to numbers released Nov. 5 by DEG: The Digital Entertainment Group.
In the first nine months of this year, consumers spent an estimated $12.5 billion on bringing entertainment into their homes and various mobile devices, a decline of less than 1% from the $12.62 billion they spent in the first nine months of last year.
As expected, disc sales continued to fall, with consumer spending on Blu-ray Discs and DVDs combined down 8% in the quarter, to $1.33 billion from $1.45 billion, and 8.2% for the year through Sept. 30, to $4.6 billion from $5 billion.
Electronic sellthrough (EST) rose 26.7% in the quarter and 33% in the first nine months of 2014. But total spending — $347 million in the quarter and $1.02 billion for the year through Sept. 30 — remains a small percentage of total sellthrough spending and wasn’t enough to lift the category into positive territory. For the first nine months of this year, EST accounted for just 18% of total consumer purchase dollars, while discs accounted for 82% of the total sellthrough pot.
DEG numbers show that the total amount of money consumers spent in the quarter on buying filmed entertainment — on disc and digitally — slipped 2.5%, to $1.68 billion from $1.72 billion in the third quarter of 2013. For the year through Sept. 30, consumer sellthrough spending was down 2.7% to $5.61 billion, from $5.77 billion in the first nine months of last year.
The DEG did not break out Blu-ray Disc sales from overall physical media sales. Home Media Magazine research estimates Blu-ray accounted for 28% of packaged-media revenue in the quarter and 30.7% through the first nine months of the year.
Consumer spending on subscription video-on-demand — such as Netflix streaming — rose more than 26% in the first nine months of 2014, to $2.94 billion, from $2.33 billion in the comparable period a year ago. Transaction video-on-demand (VOD), meanwhile, was down nearly 7%, to an estimated $1.45 billion from $1.56 billion. Total digital spending — on subscription VOD, a la carte VOD and EST — was up 16.3% to an estimated $5.4 billion from $4.65 billion, DEG numbers show.
The biggest loser was again traditional disc rental at physical video stores, which declined 32% to an estimated $517 million in the first nine months of this year from $760 million in the same period last year.
Disc rentals at Redbox vending machines and other kiosks were off 5.9% in the first nine months of this year, to $1.34 billion from $1.43 billion. The drop was even more significant in the third quarter: business was down 11.5% to $418 million from $472 million in the third quarter of 2013.
Warner Bros. is upping its status in the South Korean home entertainment market by offering select new-release movies on transaction video-on-demand — and not theatrically — through regional telecom operators.
While the Warner branded service, which launches Oct. 16 on KT Olleh TV and separately on LG U+TV), will offer traditional new movies and catalog in the retail window. It is also offering select new releases foregoing a theatrical release.
As a result, romantic comedy Blended, starring Adam Sandler and Drew Barrymore, will be available on VOD but not in theaters. The title has generated more than $126 million at the global box office, including $46 million domestically.
Other titles include Clint Eastwood’s Jersey Boys, which has generated nearly $62 million globally ($47 million domestically), and adult comedy Tammy, starring Melissa McCarthy, which has generated $97 million globally ($85.5 million in the U.S.) since its July 2 debut.
The service marks Warner’s first serious effort to recapture the South Korean home entertainment it all-but-vacated six years ago. The studio was the last Hollywood holdout in 2008 — pulling the plug on its DVD business, which had suffered due to rampant piracy and other issues.
Korea has been wired longer than most countries, with 94% of households reportedly having broadband connections since 2008 when the high-definition channel was still in its infancy. Indeed, Warner used the Korean market to test making new releases available two-weeks ahead of their packaged media retail date — beginning 2009.
Transactional VOD Growing in America
Transactional VOD has been available in the United States for years — largely through cable and satellite TV operators with little consumer traction. That trend is changing. A new Parks Associates study found that 37% of U.S. broadband homes use transactional VOD on a regular basis. Those households also proportionally opt for subscription streaming.
Indeed, about two-thirds of Amazon Prime Instant Video subscribers also rent or purchase titles through the service, and their average expenditures are increasing. By contrast, expenditure on downloads among Netflix subscribers is decreasing, according to Parks.
"Subscription services are the most popular form of OTT video, but a transactional service that offers a wide selection of titles and easy-to-use controls can score with consumers and create new revenues," Barbara Kraus, director, research at Parks, said in a statement.
Kraus added that a lack of engaging content can doom a transactional or SVOD service, which was made clear Oct. 7 by the shuttering of Redbox Instant. The Verizon joint venture had hoped to meld consumer interest in SVOD with its kiosk disc rental business, transactional VOD and electronic sellthrough.
“Redbox Instant failed in large part because only a limited number of titles were available to rent through its streaming library. What the service needed was a large selection of online titles, with easy access for streaming,” she said.
In a survey of 10,000 U.S. broadband households, Parks found that among frequent users of streaming media players, 80% pay for monthly streaming services, such as Netflix, but in addition, nearly 30% stream video rentals and 20% buy electronic sellthrough. These users are typically U.S. broadband households using a streaming media player such as Roku or Apple TV.
Connected Blu-ray Disc players rank just ahead of video game consoles and behind smart TVs and streaming media devices as the preferred option to acquire transactional VOD or electronic sellthrough content.
“Ease-of-use is the key factor driving most households to use a certain device, so developing a rental or download content service that is simple and well integrated with a device's [user interface] could help increase a la carte revenues among streaming content,” Kraus said.
Growth in subscription streaming (Netflix, Amazon Prime Instant Video, etc.), transactional VOD and electronic sellthrough will increasingly underscore total consumer spending from traditional home entertainment sources, including packaged media, according to analysis released at the recent PEVE Entertainment Business conference in London.
According to IHS, digital purchases are set to grow by 75% through 2017. In terms of worldwide consumer revenue, IHS forecasts that digital movie purchases will reach $2 billion by 2018.
Indeed, total U.S. home entertainment spending through June 30 topped $8 billion, according to DEG: The Digital Entertainment Group. Consumer spending on Blu-ray Disc and DVD declined 8.2% to $3.2 billion from $3.5 billion in the first half of 2013. Electronic sellthrough — buoyed by early availability — rose 37%.
“As physical rentals and purchases decline, the home entertainment revenue stream will rely more and more on the growth potential of the digital space,” Dan Cryan, senior director of digital media at IHS Technology, told attendees, which included representatives from the major U.S. studios.
Similar to foreign box office growth, IHS said major media companies such as Google and Apple are expanding their digital storefronts — Google Play and iTunes — internationally. Google Play movies are now available in Central Asia and Korea and iTunes is extending its reach into Egypt, Saudi Arabia, Oman, South Africa and Mozambique, according to the research firm.
In addition to digital sellthrough, IHS said media companies are innovating the ecommerce home entertainment experience to include catalog movies and pre-order movie sound tracks, among other content offerings.
“The digital content store page is changing,” Cryan said. “If ecommerce can extend the kinds of content types offered and include content, such as apps, they are likely to see increased sales.”
It’s been quite a week for Blinkbox, the electronic sellthrough movie and TV show platform owned by British supermarket chain Tesco.
At the PEVE Entertainment Business conference Sept. 30 in London, Adrian Letts, managing director of Blinkbox, announced the platform would “imminently” bow a digital content locker with UltraViolet functionality.
Letts said final details surrounding the venture were being ironed out with the studios and related content partners. Blinkbox, which offers more than 10,000 digital titles for retail and rental, is considered a key driver in consumer adoption of UV in the United Kingdom. The platform has generated more than 1.5 million registered accounts in the U.K. without a formal launch, according to the Digital Entertainment Content Ecosystem.
Indeed, 12% of respondents in a survey presented at PEVE by YouGov, a London-based Internet market research firm, said they would consider trying UltraViolet with their next packaged-media purchase. Another 55% of respondents who have tried UV said they would do so again, while 22% who had not tried the digital locker said they would do so going forward.
Meanwhile, media reports suggest new Tesco CEO Dave Lewis is looking to sell or shutter Blinkbox following an internal review of Tesco’s core assets. The chain is one of the largest packaged-media retailers in the U.K.
Lewis is under pressure to right Britain’s largest supermarket retailer after it recently disclosed it had overstated half-year net income by more than $400 million. The news sent Tesco’s stock plunging and resulted in the government conducting an investigation to see if senior officials at Tesco “cooked the books” to mask slumping profits.
Indeed, Lewis reportedly has ordered senior executives to man store floors during the upcoming Christmas holidays. In addition, the chief executive is seen wanting Tesco to focus more on the grocery business than ancillary ventures such as Blinkbox. A reality Letts appeared to acknowledge.
“When a customer is starting to think digitally, when they are buying a mobile device, console or TV, those are probably better opportunities to market UV to customers than when they are in store buying groceries,” Letts said, as reported by Cue Entertainment.