Trans World Entertainment Corp. Shareholders Approve Reverse-Stock Split, Add Paramount Home Entertainment’s Jeff Hastings to Board

Shareholders of Trans World Entertainment, parent to home entertainment retailer f.y.e. (For Your Entertainment) and e-commerce middleman eTailz.com, have approved a 1-for-20 shares reverse stock split to satisfy Nasdaq’s $1-per-share minimum requirement.

The company’s stock, which closed July 1 at less than 27 cents per share, would be worth $5.36 per share following the maneuver.

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Separately, shareholders approved the appointment of Jeff Hastings, VP of sales and forecasting at Paramount Home Entertainment, to its board of directors.

Hastings joins the six-person board, which includes CEO Mike Feurer, Robert Marks, Michael Nahl, W. Michael Reickert and Michael Solow.

Hastings, who was put on the board nominee slate following pressure from TWEC shareholder Mark Higgins (son of late company founder Robert Higgins), previously informed the board that if elected, he could not begin his term on the board until September.

Netflix Reportedly Eyeing Content Budget Restraint

With Netflix’s fiscal second-quarter ended June 30, the SVOD pioneer reportedly is re-evaluating its prolific content spending.

The service, which ended Q1 with $18.9 billion in third-party content obligations, spent more than $12 billion on original content in 2018 — a fiscal largess senior management is now scrutinizing.

CCO Ted Sarandos in June reportedly held a meeting with mid-level managers with a revised mandate that spending on original content should be commensurate with viewership — especially among new subscribers and long-time inactive members, according to The Information, which cited people at the meeting.

Netflix heretofore has eschewed spending restraint in favor of content’s social media buzz and establishing industry legitimacy.

“They are the leading game in town and were probably overspending relative to what they need,” analyst Michael Nathanson with MoffettNathanson told the website. “Now that they are in a strong position, they probably want to allocate more of that spending overseas.”

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The service in recent years has blown up industry norms outspending/bidding over-the-top competitors and traditional pay-TV players for content and exclusive license agreements.

With domestic sub growth maturing and a bevy of pending OTT video services launching from deep-pocket competitors such as Apple, Disney, WarnerMedia and NBC Universal, among others, Netflix now wants original programming to pay for itself — a challenge for a business model that shuns advertising, the theatrical window and transactional VOD.

Sarandos, according to The Information, was at odds with the reported $115 million spent on Triple Frontier, the original action movie with Ben Affleck and Charlie Hunnam (“Sons of Anarchy”) that apparently didn’t resonate with subscribers — or the service’s bottom line.

In fiscal 2018, Netflix generated negative cash flow of $3 billion on revenue of $16 billion — a figure projected to increase to $3.5 billion in fiscal 2019 — much of it due to content spending.

“There’s been no change to our content budgets, nor any big shifts in the sorts of projects we’re investing in, or the way we greenlight them,” said a Netflix spokesperson.

Meanwhile, pending original movie The Irishman, from director Martin Scorsese has a reported budget of $150 million. With Netflix eyeing the mob thriller for next year’s industry awards, the service will have to compromise on its concurrent theatrical/streaming release mandate, says Michael Pachter with Wedbush Securities in Los Angeles.

“We expect Netflix and exhibitors to reach an accommodation where there will be a shortened window in exchange for lower film rent,” Pachter wrote in a July 1 note.

A typical film earns 83% of its box office within four weeks, and 96% within 60 days, which Pachter believes could soften exhibitors’ revenue loss to around 3% as the result of a shortened theatrical window to appease Netflix’s business model.

“We think that if studios or platforms like Netflix are willing to trade film rent for an earlier window, the negative impact on exhibition would be limited particularly for films well-suited for the big screen,” Pachter wrote. “The Irishman may fit the bill.”

Netflix reports Q2 fiscal results July 17.

Chinese Films ‘How Long Will I Love U,’ ‘Shadow’ Coming to Disc From Well Go in August

Two Chinese Films, How Long Will I Love U and Shadow, are coming to disc from Well Go USA Entertainment in August.

Due Aug. 6 is How Long Will I Love U. The romantic comedy follows a man and a woman who are living in the same apartment nearly 20 years apart and wake one day to find their timelines have merged. The film received a North American theatrical release May 25, 2018.

Coming Aug. 13 on DVD and Blu-ray (plus DVD) is the martial arts actioner Shadow, from director Zhang Yimou (Hero, House of Flying Daggers). In a kingdom ruled by a young and unpredictable king, the military commander has a secret weapon: a “shadow”, a look-alike who can fool both his enemies and the king himself. He must use this weapon in an intricate plan that will lead his people to victory in a war that the king does not want. The film had a world premiere at the Venice Film Festival and a U.S. theatrical release in May.

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U.S. Broadband Households Who Watch Mobile Video More Likely to Cut Cord

U.S. broadband households highly likely to cut the cord in the next 12 months watch more than six hours of video content on their mobile phone a week, compared to 2.5 hours among all U.S. broadband households, according to research from Parks Associates.

The report Examining Broadband Cord Cutters notes that fixed broadband providers that do not offer mobile services are particularly susceptible to cord-cutting among their current subscribers. These market trends drove U.S. cable operators Comcast and Charter to introduce mobile services as a way to extend their service-based product portfolios, according to the report.

“Roughly 10% of broadband subscribers are likely broadband cord-cutters, with half of them highly likely to make the change in the next 12 months,” said Brett Sappington, senior research director and principal analyst, Parks Associates, in a statement. “Many are satisfied with their current provider overall, but these subscribers are aware of the other options available to them and could become actual cord-cutters if their current service does not continually meet their needs.”

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The research notes that two-thirds of broadband households currently subscribe to a cable internet service, three in ten subscribe to DSL or fiber optic, and one-third use mobile data services. Verizon, AT&T, and Frontier are the largest providers of DSL and fiber-based fixed-line services.

“Potential broadband cord-cutters rely on their mobile devices for entertainment,” Sappington said in a statement. “They are significantly more likely to watch live video content via mobile, including live TV broadcasts and livestreaming, averaging an hour more per week each compared to average broadband households. As 5G mobile and 10G fixed broadband services start to deploy, the substantial performance improvements will be attractive to this segment of subscribers, which will drive many providers to match these offerings in order to achieve parity in competition and messaging.”

MobiTV Secures $50 Million in Venture Funding

MobiTV, a platform offering pay-TV operators over-the-top video distribution across myriad platforms, July 1 announced it has closed more than $50 million in funding from three investment funds.

Based in Emeryville, Calif., MobiTV enables third-party pay-TV operators to offer subscribers on-demand programming, live TV, catch-up TV, network DVR and content recommendations without the need of a set-top box.

Investors include Oak Investment Partners, Ally Financial, and Cedar Grove Partners. The funding will be used to accelerate the growth of MobiTV’s international footprint.

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“We believe in MobiTV’s superior consumer experience and know that being the only true commercially deployed solution in North America has differentiated their positioning in the marketplace,” Bandel Carano, managing partner, Oak Investment Partners, said in a statement.

MobiTV’s “multi-tenant solution” can be deployed through either a managed service or in-network offering, enabling it to address operators of all sizes, in a cost-effective manner.

Third-party clients include Citizens Fiber, Windstream and EPB with access to more than 350 networks, including A+E Networks, AMC Networks, Crown Media Family Networks, C-SPAN Networks, Disney and ESPN Media Networks, Showtime and Viacom, among others.

“We’re equally proud to have a nod from the National Cable Television Cooperative, as they selected MobiTV as a premiere partner for app-based pay-TV video solutions,” said MobiTV chairman/CEO Charlie Nooney. “We continue to demonstrate our ground-breaking approach to addressing operator challenges as they upgrade their pay-TV offering in an increasingly competitive marketplace.”

Report: Sony ‘PlayStation 5’ to Focus on Major Games, Tech, Including 8K Resolution

Sony Interactive Entertainment appears to be taking a page from Sony Pictures, focusing internal efforts on proven content and wow-factor graphics, among other features.

The Wall Street Journal reports that Sony’s unnamed fifth-generation video game console — reportedly set to launch in late 2020 — will cater to established game publishers featuring graphics-heavy features.

The strategy is not dissimilar to Sony Pictures focusing on proven franchises such as “Spider-Man,” “Ghostbusters” and “Jumanji.”

“Details when making games have become more important than ever,” Kenichiro Yoshida, CEO of Sony Corp., reportedly said at a recent company briefing.

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Expectations are high for PlayStation, whose PS4 console continues to generate significant sales, including projected 17+ million units in 2019 — five years after launching.

The PlayStation brand, including hardware, software and subscriptions, generated more than $21 billion in revenue — and $3 billion operating profit — in Sony’s most-recent fiscal year.

By comparison, Sony Pictures generated about $9.2 billion in revenue, which trailed televisions and speakers ($10.1 billion) and topped smartphones at $4.6 billion.

The new PlayStation comes as the gaming industry grapples with changing technology and distribution to consumers — notably cloud-based online gaming.

Google plans to launch its Stadia platform in November while Apple readies Apple Arcade — both services circumventing traditional game consoles such as PS4, Xbox One and Nintendo Switch.

According to WSJ, Sony contends online gaming doesn’t allow hardcore gamers the ability to engage in graphics-heavy content, audio and 8K resolution, among other features, due to spotty broadband connections and other tech challenges.

“[This] clearly demonstrates why it makes sense to have a next-generation console,” Yoshida said.

Pluto TV Launches Spanish-Language Platform

Pluto TV, Viacom’s ad-supported online TV service, July 1 announced the launch of Pluto TV Latino, a new platform featuring a suite of Spanish and Portuguese-language channels.

Pluto TV Latino represents the first offering of its kind to be introduced on a major ad-supported OTT platform.

The platform features 11 curated Spanish and Portuguese-language channels targeting U.S. Hispanic audiences. More than 2,000 hours of content includes movies, comedy, music, true crime, reality, sports and a selection of action and romance-packed telenovelas.

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The channels include three movie-themed channels showcasing blockbuster and native Spanish-language films, and all-new genre-specific channels featuring library collections, music specials, comedies, crime series, telenovelas and more from MTV, Comedy Central, Telemundo, Combate World and Lucha Libre.

Additional channels are expected to launch this fall featuring genres such as food, travel, competition, kids and single-series channels featuring  Spanish-speaking and dubbed versions.

“We have always envisioned Pluto TV as a destination with global appeal, where diverse audiences can find and stream the entertainment they love, for free,” Tom Ryan, CEO/co-founder, Pluto TV, said in a statement.

The introduction Pluto TV Latino is a multi-faceted initiative designed to offer diversified, ad-supported, streaming programming and entertainment with global appeal, according to Ryan.

Spanish-themed channels include Pluto TV Cine Estelar, Pluto TV Películas, Pluto TV Cine Latino, Pluto TV Investiga, Pluto TV Novelas, Telemundo Telenovelas Clásicas, MTV Latino, Comedy Central Latino and Pluto TV Brasil.

“Pluto TV Latino was designed to bring premium streaming programming to an underserved OTT audience with cross-generational appeal,” Ryan said. “To be the first ad-supported streaming platform to offer an entire category dedicated to U.S. Hispanic audiences is something we are incredibly proud of and furthers our mission to entertain the planet.”