After a year of two gigantic mergers, Hollywood is welcoming the new year with further consolidation — this time, in the home entertainment sector.
Universal Pictures and Warner Bros. on Jan. 15 announced plans to merge their physical distribution businesses.
On the domestic front, the two studios are establishing a joint venture to market and distribute Blu-ray Discs, DVDs and 4K Ultra HD discs in the United States and Canada.
The new unit, which still must be approved by the U.S. Justice Department, is expected to officially launch early in 2021. It will combine the existing domestic disc businesses of Universal Pictures Home Entertainment (UPHE) and Warner Bros. Home Entertainment, and be headed by current UPHE President Eddie Cunningham.
Internationally, territories will be broken up through licensing arrangements. Warner Bros. will assume distribution duties of UPHE discs in the United Kingdom, Italy, and Benelux (Belgium, The Netherlands and Luxembourg). UPHE will distribute Warner products in Germany, Austria, Switzerland, and Japan.
The digital distribution business at each studio will not be affected.
The proposed union covers new releases and library titles as well as television content, and will be operational for up to 10 years.
The domestic joint venture will include leadership from both UPHE and Warner Bros., and covers trade marketing, sales and distribution.
Consumer marketing remains with each studio.
The announcement was made by Peter Levinsohn, president and Chief Distribution Officer of the Universal Filmed Entertainment Group, and Ron Sanders, president of Worldwide Theatrical Distribution & Home Entertainment and EVP of International Business Operations at Warner Bros.
“As the home entertainment landscape evolves, we are continuously working to deliver the best entertainment range and value to our fans,” said Sanders. “The physical business is still an important and active category for the industry. This proposed joint venture with Universal gives us the best opportunity to foster innovation in this business, optimize the physical offering and extend the lifespan of the format for our fans and consumers.”
“With market conditions and consumer viewing behaviors continuing to evolve, we wanted a partner who shares in our commitment to deliver the best consumer proposition going forward,” Levinsohn said. “This proposed JV presents a significant opportunity to continue to work with our retail partners to ensure the format’s strength and sustainability for years to come.”
On the appointment of Cunningham, Levinsohn said, “For more than two decades Eddie has been an expert in understanding the evolution of the physical home entertainment landscape. He’s been a dynamic leader in shepherding business innovation and operational effectiveness.”
This is not the first time studios have joined forces in their home entertainment endeavors. In the early 1980s, Columbia (now Sony) Pictures created a joint venture with RCA to distribute videocassettes to the then-burgeoning rental market. RCA/Columbia Pictures Home Video was in operation for more than a decade; in the meantime, the industry saw several other joint ventures, including CBS/Fox Video and Thorn-EMI/HBO Video.