AFM 2023 Chaotic, But Productive, Indie Film Distributors Say

SANTA MONICA, Calif. — The annual American Film Market (AFM) ended its six-day run Nov. 5 at its new home, the Le Méridien Delfina Santa Monica, and the verdict among independent film distributors who attended the event was that it was equal parts chaotic and productive.

Chaotic, because the venue change necessitated splitting the conference program from the hotel suites where most of the business gets done. Sessions were held at the Hilton Santa Monica Hotel & Suites, nearly a mile away. Parking information was vague, and the lines for elevators were as long as ever. Compounding the confusion was that the host hotel was being picketed by striking hotel workers belonging to Unite Here Local 11, who crowded the sidewalk while loudly chanting, banging drums and tooting horns. Their demands include higher wages and an end to bringing in replacement workers from homeless shelters on Skid Row.

And yet inside the film market, it was very much business as usual. “AFM was productive – it was great to have face time with so many sales agents, buyers and producers,” said Andreas Olavarria, president and CEO of Level 33 Entertainment. “As I’m sure many have remarked, there were challenges with the venue: it was difficult navigating the new location, elevators, maze-like halls and stairwells; not to mention the noise of striking hotel workers which seemed to affect mostly the priciest suites facing the ocean.”

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His takeaway of the current state of independent film distribution: “The SVOD business is more difficult and confusing than ever with so much consolidation, change of personnel and lack of clarity about who is actually buying indie films. AVOD is a bright spot, with many platforms doing meaningful business. Theatrical presents some opportunities but seems to be mostly about branding films ahead of VOD….”

Striking workers outside the Le Meridien Delfina in Santa Monica, Calif., during AFM 2023 (Media Play News staff photo).

Among several acquisitions, Level 33 nabbed North American rights to Cottontail, a drama from British director Patrick Dickinson that stars Lily Franky and Ciaran Hinds. The film had its world premiere late last month at the Rome Film Festival, where it picked up a prize for Best First Feature.

Mitch Mallon, the founder and CEO of Stadium Media, said his company “did not acquire anything in particular, but we did create a few new relationships with newer/startup production companies.  We also reconnected with companies that we have been in contact with for the past few years and a few of those look like they will be bringing some of their programs to Stadium Media in 2024.”

Mallon agrees that the show was productive. “We connected for the first time with local film commissions in our state, Arizona, which means Stadium Media will now be in the conversation for film makers as a possible asset for their production’s distribution.”

As for buzz, Mallon said “the one that surprised me is that I did not hear much discussion around the show floor  in the way of FAST channels, whereas the previous week while attending Sportel Monaco, the talk was all about FAST.”

Ed Seaman, CEO of MVD Entertainment Group, a family-run business that has been releasing music and film to home viewers since 1986, also gave the show high marks.

“We are considering a number of different product lines for acquisition but we don’t kiss and tell, not until the ink is dry,” he said. “Most importantly, anytime we can get together with our trade partners, have some quality time to explore opportunities and break bread, great things happen. And AFM this year did not disappoint.” 

Bill Sondheim of Greenfield Media LLC, a content consulting company, said he sees AFM as “as opportunity to buy and sell content. I was here to sell a few movies and was able to get several offers that I am now negotiating to complete the terms.”

Overall, he said, “I found the show exceptionally productive, and I was pleasantly surprised by the ease in setting very busy back-to-back meetings away from the main event hotel with meaningful distributors and platform operators. This allowed me to have quiet and engaged meetings in a pleasant environment. In just three days, I had 27 meetings and three delicious dinners. One dinner helped me secure a host for a TV series, another allowed me to get a few collector boxed sets in motion, and a final dinner provided ideas for new MOD services for international territories.”

That said, Sondheim added, “I heard frustration from many foreign sales companies that the new host hotel was not accommodating. I also heard attendance was down in part due to the huge attendance at MIPCOM a few weeks ago.”

On the product side, he said, “The disc dialog I heard centered around MOD and collector sets. MOD will extend the ability to get revenue out of an increasingly small consumer base for slower moving titles. Collector sets cater to an audience that wants a physical item to display because they are passionate fans, and that consumer may start to resemble the older vinyl consumer that has driven a retro hipness despite newer technologies.”

Attendees also commented that they felt the panel discussions, at 90 minutes, were far too long. Said one observer, “I felt like sticking needles in my eyes.”

Digital, Brick-and-Mortar Retailers Strike Back

There have been some pretty interesting developments on the retail front lately, on both the digital and the physical side.

The Hollywood studios are finally realizing that not only is subscription streaming far from the goldmine they once thought it was, but it is also a completely unsustainable business model. As a result, they are giving the traditional window strategy a second look, including premium video-on-demand (PVOD), which they deployed during COVID-19 but then hastily discarded in their rush to give all their valuable IP to the streaming services.

We’re once again seeing bigger movies come to theaters first, followed by a transactional home release, generally digital first and then disc.

Digital retailers such as Vudu and Redbox On Demand are trumpeting the fact that these films aren’t available on the all-you-can-watch streaming services, while capitalizing on the ability to draft off theatrical marketing campaigns for the growing number of movies that are available for digital sale or rental within weeks of their theatrical openings, albeit at a higher price.

On the physical front, retailers are hoping the plethora of high-profile product will arrest the double-digit declines in DVD and Blu-ray Disc sales we’ve been seeing for the better part of a decade, ever since studios decided it was a good idea to license their films to Netflix for short-term gains, oblivious to the fact that this strategy would lead to a long-term fiscal disaster.

We’re also hearing rumblings that the physical movie disc may be in for a vinyl-like resurgence, as young people tire of the transitory nature of streaming and once again embrace something they can own, collect and show off. Back in January, I met a 23-year-old TikTok creator at CES who told me she and her friends were buying Blu-ray Disc players because they wanted to start collecting their favorite movies.

More recently, last month I was invited to speak at the annual Music Biz Conference in Nashville on a panel discussion on why record stores should start carrying movies. Speakers drew parallels between film collectors and music collectors, and noted that just as in the music industry, there’s still a place for physical media.

Ed Seaman, CEO of the MVD Entertainment Group, said that in his dealings with retailers he sees strong sales of collectible indie fare on Blu-ray Disc and 4K Ultra HD, with a similar demographic to vinyl collectors.

He shared an anecdote: “We were at this convention last year and had just gotten a monumental order from Barnes & Noble for a great collectible series of Blu-ray Discs. I was talking to a venerable indie retailer, and asked, ‘Do you have a Blu-ray section?’ She said no, her store only carries used DVDs. So I said, ‘You sell used vinyl — does that preclude you from selling new vinyl?’ And a lightbulb went off, about there being an opportunity for indie retailers to exploit these collectible Blu-rays and 4Ks, which are very similar to collectible vinyl in terms of appealing to passionate consumers.”

Connie Comeau, COO of physical media production company the ADS Group, said 35% of her company’s business consists of DVD and Blu-ray Disc replication, and over the past two years ADS produced more than 10 million DVDs exclusively for the Dollar Tree store chain. “People are wanting that content, and we are seeing an uptick in our DVD business,” she said. “I am a firm believer in physical media.”

This column appears in the June 2023 issue of the monthly Media Play News magazine.

Music Confab Panel Compares Vinyl to Home Video Disc Collectors

NASHVILLE — The physical home entertainment disc was the topic of a May 17 panel discussion titled “Blu-ray Is to Film Geeks as Vinyl Is to Music Freaks” at the Music Biz Conference 2023.

The panel was moderated by Audrey Faine, VP of marketing for the MVD Entertainment Group, one of the leading distributors of indie film and music — as well as indie labels.

Speakers drew parallels between film collectors and music collectors, and noted that just as in the music industry, there’s still a place for physical media.

Panelists included Mike Durham, buyer of the Zia Record Exchange, a chain of eight record stores in the Southwest; Connie Comeau, COO of physical media production company the ADS Group; and Laura Provenzano, SVP of purchasing and marketing at Alliance Entertainment.

Ed Seaman, CEO of the MVD Entertainment Group, introduced the panel. He noted that in his dealings with retailers he sees strong sales of collectible indie fare on Blu-ray Disc and 4K Ultra HD, with a similar demographic to vinyl collectors.

He shared an anecdote: “We were at this convention last year and had just gotten a monumental order from Barnes & Noble for a great collectible series of Blu-ray Discs. I was talking to a venerable indie retailer, and asked, ‘Do you have a Blu-ray section?’ She said no, her store only carries used DVDs. So I said, ‘You sell used vinyl — does that preclude you from selling new vinyl?’ And a lightbulb went off, about there being an opportunity for indie retailers to exploit these collectible Blu-rays and 4Ks, which are very similar to collectible vinyl in terms of appealing to passionate consumers.”

Comeau said 35% of her company’s business consists of DVD and Blu-ray Disc replication, and over the last two years produced more than 10 million DVDs exclusively for the Dollar Tree store chain. “People are wanting that content, and we are seeing an uptick in our DVD business,” she said. “I am a firm believer in physical media.”

Durham noted that all of his stores also carry DVDs and Blu-ray Discs and do healthy, steady sales, particularly with budget cult films and premium-priced collectibles. “We have been music stores for some time, but movies have always been a huge part of what we do,” he said. “And we see that there is a similar fan who comes in for the elaborate record package to the fan who comes in for the great film package. Cult films, horror films — we sell a ton of them.” He cited indie distributors such as Arrow, Blue Underground and Severin as having loyal, repeat customers.

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Alliance Entertainment’s Provenzano said Barnes & Noble is a “huge, huge” customer for collectible indie fare from Arrow, Criterion and other labels. “We really are focused primarily on these tentpole promotional events that we do a couple of times a year,” she said, which focus on collectors and are driven by advertising, blogging and social media. “We see tremendous chatter online,” she said. “There’s absolutely a collector factor coming in there. We see consumers who are just waiting and anticipating these sales events, and they will come in and literally ask for catalog numbers, because they want to pick up every new release for their collection, and that’s a really cool thing.”

Provenzano noted that Barnes & Noble customers prefer premium-priced collectibles “with lots of bells and whistles,” while Durham said he’s also seeing big sales in low-priced cult fare: “We carry a lot of movies, across the board, but our No. 1 seller, for the last 10 years, has been Blood In, Blood Out, and I’m talking close to 10,000 units over the course of those years. And it’s $5.99.”

Media Play News presented data from The DVD & Blu-ray Release Report that showed 2022 was a record year for DVD, Blu-ray Disc and 4K Ultra HD.
A total of 21,931 new DVD titles were released last year, an all-time high (the previous best was 16,380). As for Blu-ray, 5,966 new titles came out in 2022, again, a record high (the previous best was 4,795). Suppliers also released a record 338 4K UHD discs (the previous best was 162).

About half those releases, however, were from questionable sources, which DVD & Blu-ray Release Report editor Ralph Tribbey attributes to the studios turning their back on the physical disc in their rush to send films and shows to streaming services.

Tribbey says demand for discs is “out of control. From a traditional studio point of view, home entertainment packaged media is dead, but the numbers say something completely different.”

Annual Music Biz Conference Tilts Toward Streaming as Paid Subscriptions Dominate Music Sales

NASHVILLE — The annual Music Biz Conference concludes May 18 after a three-day run. And like other recent entertainment trade shows, most notably NAB, the conference hosted by the Music Business Association (formerly the National Association of Recording Merchandisers, or NARM) tilted heavily toward streaming.

A research presentation asked, “Where Do We Go From Here?” Another presentation, the provocatively titled “Are You Getting All Your Streaming Money,” was sponsored by The Mechanical Licensing Collective and provided information “on how songwriters, composers, lyricists, and music publishers can collect all of their streaming money,” according to the conference’s program.

While streaming has only dominated home entertainment for less than a decade — disc sales alone were higher than subscription streaming revenue as recently as 2015, according to DEG: The Digital Entertainment Group estimates — the digital revolution toppled the traditional music sales business in the early 2000s. Record companies killed the single, the longtime sampling mechanism for new music, at the height of the CD boom because it cost the same to press a CD single as an entire album. That, then, led consumers to swap digital song files over the Internet through sites such as Napster. The record companies responded by raising the list price of CDs and suing their customers, and that’s when all hell broke loose.

Today, the music industry, much like home entertainment, is dominated by streaming. According to the Recording Industry Association of America (RIAA), consumer spending on recorded music reached a high of $15.9 billion last year, 84% of which came from streaming. In home entertainment, according to the latest DEG estimates, streaming accounts for a similar percentage, 86%.

And, in another parallel, streaming growth has leveled off, with consumer spending rising just 7% to $13.3 billion, $10.2 billion of which came from paid subscriptions and the rest from ad revenue, digital radio, fitness apps and other sources.

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Unlike home entertainment, however, where physical media sales continue to fall, the music industry for several years has seen a resurgence, particularly in vinyl record sales.

In 2022, according to the RIAA, total physical revenue rose 4% from the prior year to $1.7 billion. Vinyl record sales grew 17% to $1.2 billion and for the first time since 1987 consumers bought more vinyl records (41 million) than CDs (33 million). CD revenue, on the other hand, slipped 18% to $483 million after a gain during the COVID-19 pandemic.

Looking Back at 2022: Streamers Stumble and Turn to Ads as Hollywood Bemoans Erosion of Traditional ‘Second Window’

NEWS ANALYSIS — As the nation slowly emerged from the COVID-19 pandemic, home entertainment faced a whole new set of challenges and concerns in 2022.

Subscription streaming, the golden child of the pandemic era, began showing cracks, beginning with Netflix posting significant subscriber losses in the first and second quarters of the year, which sent the streamer’s stock price tumbling. Then came the Walt Disney Co.’s sacking of Bob Chapek from the CEO slot, in part due to the high costs of Disney+, a key factor in the company’s sinking stock price. And HBO Max, after an April merger between Warner Bros. and Discovery, ended the year with a rash of film and series getting dumped to cut costs and prep the service for a union next year with Discovery+.

“2022 definitely felt like a roller coaster of recalibrated expectations for our business on Wall Street, with M&A, growth amid higher churn for direct-to-consumer subscription services, and escalating costs for content production and acquisition,” observes Amy Jo Smith, president and CEO of DEG: The Digital Entertainment Group, the digital entertainment trade association. “Even when the ride was bumpy, though, there were a lot of bright spots, including the growth of ad-supported streaming services (AVOD and FAST) and a wider range of subscription services, the return of in-person events to foster cross-industry collaboration, and, most importantly, consumers’ deep and abiding engagement with premium content across distribution models including transactional, subscription and ad-supported.”

“2022 was another growth year for the OTT business, with SVOD still the leading revenue contributor, but with AVOD and FAST growing rapidly and changing the way that consumers access and enjoy motion picture and episodic content in the home,” adds Mark Fisher, president and CEO of OTT.X, the streaming trade association. “And TVOD remains the primary way that consumers conveniently access new releases and catalog content, much of which is only available via VOD.”

Subscription streaming remains the dominant way in which consumers enjoy entertainment at home or on the go, and in fact grew its overall market share to nearly 85% of all consumer spending on home entertainment, according to the latest DEG numbers.

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But the King Midas touch first felt during the heyday of the pandemic, when theaters were closed and people were asked to stay home, is clearly gone — as evidenced by the launch late in 2022 of cheaper, advertising-supported subscription plans by both Disney+ and Netflix in an effort to boost revenues.

The jury is still out on whether the gambit will succeed, although early reports suggest Netflix, at least, is running into a little trouble. Research house Antenna in December reported that the $6.99 “Basic With Ads” plan nabbed just 9% of new Netflix domestic subscription sign-ups during its first month of availability, while only 0.1% of Netflix’s existing U.S. subscribers switched to the ad-supported option. At the same time, Reelgood found hundreds of movies and TV shows are missing on the ad-supported tier.

Bill Rouhana

“For SVOD services, the major development for 2022 was the sobering reality that their business models, as currently constructed, are not sustainable — as subscriber growth has slowed and content costs have continued to escalate,” observes Bill Rouhana, CEO of Chicken Soup for the Soul Entertainment, a leading provider of free streaming content. “SVODs were spending heavily on original content to differentiate their services and ultimately ran up huge debts. That, combined with an economy that’s in a recession, and consumers cutting back on paying for multiple SVOD services, makes for a challenging future, with maybe one or two winners.”

Not surprisingly, then, the biggest success story for home entertainment in 2022 is the proliferation of completely free streaming content, both on-demand (ad-supported video-on-demand, or AVOD) and linear (free ad-supported streaming television, or FAST).

In this part of the business, one of the biggest developments of 2022 was the August acquisition of Redbox by Chicken Soup for the Soul Entertainment, which gave the combined company more than 145 FAST channels on top of its already strong presence in the AVOD market with Crackle and other services.

“Chicken Soup for the Soul Entertainment massively scaled for the future in 2022 with the acquisition of Redbox,” Rouhana said. “We’ve been working to integrate the companies and are close to finishing that.”

Stefan Van Engen, SVOD of content programming and partnerships at Xumo, a premium FAST service, maintains that “FAST has become an industry darling in the past year.  From independent content owners to major media companies, everyone wants to participate.”

Meanwhile, the fallout from home entertainment’s “streaming uber alles” philosophy has had a pronounced effect on Hollywood, as the financial realities of producing content for primary consumption on all-you-can-watch streaming services led to a dearth of theatrical feature films, particularly after the year’s midpoint. According to Comscore, just 22 films opened theatrically over the summer, half as many as in 2019, the last pre-pandemic year. Not surprisingly, box office revenues for the year are expected by Gower Analytics to clock in at $25.8 billion, up 21% from 2021 but a significant drop from the $42.3 billion generated in 2019, the last pre-pandemic year.

Further impacting Hollywood’s bottom line in 2022 was the continued erosion of what was once the biggest post-theatrical revenue-generator, disc (DVD and Blu-ray) and, to a lesser extent, a la carte digital sales and rentals (known as TVOD, for “transactional video-on-demand”).

“In the rush to feed the big streaming services, many of them under the same corporate ownership, the big studios have effectively turned their back on what has traditionally been their biggest post-theatrical revenue generator,” says one veteran industry observer. “Without this critical component of the movie food chain, billions of dollars are being flushed away.”

Indeed — movies rarely generate enough money from the box office to turn a profit. In the not-too-distant past, even films that lost money at the box office more than made up the difference through robust packaged-media sales, which for a time even exceeded theatrical revenues, as well as foreign licensing rights. Projected disc sales even became a factor in studio decisions on whether to greenlight movies or not.

But as subscription streaming became the dominant form of home entertainment consumption, Hollywood seemed to lose interest in this once-crucial second window. Sure, the studios tried getting people to buy movies digitally, but consumers weren’t biting, particularly since they could get a whole month’s worth of entertainment from Netflix and the other streamers at roughly the same cost of a single digital movie.  Discs, meanwhile, were all of a sudden seen as yesterday’s technology. In 2006, the year Blu-ray Disc was launched, disc sales brought in nearly $17 billion in consumer spending. In 2021, the latest full year for which figures are available, the total was less than $2 billion.

In the first nine months of this year, according to DEG estimates, 84% of the total consumer spend on home entertainment, or $22.3 billion, went to subscription streaming services. Consumers spent just $4.7 billion on physical and digital purchases and rentals. Combined purchase and rental spending on DVDs and Blu-ray Discs slipped 15% to an estimated $1.6 billion, while digital sellthrough and VOD revenues fell less than 3% to $3.16 billion.

The physical media side of the business received a jolt in the fall when Walmart, still the No. 1 retailer of DVDs and Blu-ray Discs, seemingly implemented a 20% reduction in floor space in its electronics department for discs.

And yet home entertainment executives are adamant that the traditional, transactional home entertainment model, including discs, still has plenty of life left in it.

Bob Buchi

“Thanks to consumer demand, creative efforts from the studios, and the ongoing support from digital and physical retailers, the transactional business continues to be remarkably resilient despite the challenges of the last few years,” says Bob Buchi, president of worldwide home media for Paramount Pictures. “In 2022, the industry and consumers benefited from the very welcome return of theatrical new releases, sales of which were up 69% across the industry through October, while also providing the longer-term benefit of refreshing the catalog business for years to come.”

Buchi says Paramount Home Entertainment in 2022 “enjoyed a 200%+ spike in the theatrical new release business thanks particularly to Top Gun: Maverick and its record-setting digital sales at over 4.5 million transactions inception-to-date in the domestic market alone and equally impressive results from around the world.

“Meanwhile, consumers continue to show up for both digital and physical releases of special catalog titles. Our 50th anniversary celebration of The Godfather this year generated over $25 million in consumer spend. We’ve also seen a strong consumer response to 4K debuts of titles like Planes, Trains, and Automobiles and Pulp Fiction. In television, the ‘Yellowstone’ franchise continues to dominate, generating more than $125 million in consumer spend this year, which has helped spur the expansion of the Taylor Sheridan universe to ‘1883,’ ‘1923’ and ‘Tulsa King.’”

Buchi maintains that traditional home entertainment “remains very important to collectors and cinephiles who appreciate the best-possible quality audio and video presentation and the compelling bonus features, while general audiences appreciate the broad selection and the flexibility to access their favorite films whenever they want.”

Michael Bonner

Universal Pictures Home Entertainment president Michael Bonner also had a very good year. “From premium windows through to catalog, Universal’s transactional business remains very strong, with robust consumer demand for content across windows and formats,” he says. “Our premium window continues to generate meaningful engagement with audiences and material value to our home entertainment business with titles like Sing 2Jurassic World Dominion and Black Phone leading the way. Providing consumers with broader choice and flexibility in how and where they see our movies is working to further fuel adoption and engagement.”

Jason Spivak, EVP of distribution for North America Television & Home Entertainment at Sony Pictures Entertainment, says the transactional business “continues to thrive, particularly from a digital point of view. Even with the rapid increase of SVOD options and other new-release patterns over the past few years, transactional digital continues to be a core business, satisfying the ongoing consumer need to curate a purchased virtual collection of latest hits and library favorites. Over the past year we were extremely pleased with the digital performance of many of our films, including Ghostbusters: AfterlifeSpider-Man: No Way Home and Uncharted.”

Jason Spivak

Adam Frank, SVP of global digital sales and distribution at Lionsgate, said digital movies sales were one of the company’s bright spots in 2022.

“We have seen new releases continue to perform extremely well via electronic sellthrough, in some cases ahead of pre-COVID levels across the entire box office spectrum,” he says. “Consumers are eager for new content no matter how they access it — transactionally or via SVOD or AVOD — with theatrical-first product proving to be the most valuable from a downstream monetization standpoint.”

For independents, the rise of AVOD presents another potentially lucrative sales opportunity, coming at a time when sales to SVOD providers is increasingly hit-or-miss as the subscription streamers vacillate between producing their own content or buying it from third parties.

“AVOD has become a fantastic category for us — both our own FAST channels, and distribution on a myriad of platforms,” says Garson Foos, CEO of independent film distributor Shout! Factory. “We see that continuing to grow. It’s the emergence of the long-tail into visual content — as we’ve seen with streaming services for music.”

As for the traditional transactional end of the business, that’s still the indies’ core.

“2022 was another strong year for transactional, with a strong new-release slate — Belle, Operation Sea Wolf and JFK: Destiny Betrayed — paired with strong catalog pickups (Laika Studios, Ferngully, the ‘Halo’ catalog),” Foos says.

Garson Foos

The gift market remains a bright spot for independents, almost exclusively on the physical side of the business.

“Our impression is that it’s largely physical,” Foos says. “We don’t have a lot of evidence that the gift purchase has transitioned to digital. We still see good sales from holiday gift-card giving in late December and early January. And our complete-series TV sets, deluxe film sets like ‘Friday the 13th,’ ‘Halloween’ and our deluxe Steelbook packages always see big spikes around the holidays. Nothing says Happy Hanukah like our new Carrie 4K UHD Steelbook release.”

“People like tangible gifts, and discs are still a great tangible gift,” adds Ed Seaman, chief operating officer of the MVD Entertainment Group, another leading indie.

“Similar to the vinyl collector’s marketplace, deluxe Blu-rays and UHDs are coveted, and not just for the superior quality,” he continues. “Nobody predicted that vinyl would continue to grow since its resurgence 15 years ago, yet each year it is reaching new heights.  The video market shall likely follow for the collector’s market. Digital gift giving seems less and less relevant with the market trending more and more to AVOD.”

Overall, though, “for independent product and catalog, transactional can be challenging,” Seaman maintains.

“Getting placement on the biggest and best platforms can be a struggle, but when something does get placed the results are still very good,” he says. “Inclusive digital platforms for film remains the biggest challenge — and opportunity — in our industry.  There is no consistent place to find virtually any film you’d like to see. Everyone is fatigued by the need to subscribe to multiple services to see what you want to see. Compared to the music industry, there is no Spotify in the video business where you can reliably find virtually anything you’d like to watch.

“There is an opportunity to build or aggregate the various sources of entertainment into one easy-to-use, all-you-can-eat service.  The fragmentation and frustration in finding what you want is also an opportunity for disc sales, which is now the most reliable way to find what you want.”

Looking Ahead: Lessons From the Pandemic to Guide 2022 Home Entertainment Strategies

The uncertainty over the COVID-19 surge triggered by the emergence of the Omicron variant has made any and all predictions for the coming year suspect. Life could go back to normal fairly quickly or we will continue to battle surges and adjust our lives accordingly. Most observers don’t see us going back to the draconian shutdowns and lockdowns of the early days of the virus, but studio executives and exhibitors are understandably nervous about the current and any future surges since theatrical attendance could suffer — which ultimately affects everyone down the food chain.

The home entertainment business weathered the initial COVID crisis quite well, with streaming growing stronger and transactional video-on-demand (TVOD) winning a premium first-run window. That said, there are several “givens” as 2022 gets underway.

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Netflix, Disney+, HBO Max and the other high-profile streamers will continue to battle for dominance, with Netflix doing everything in its power to reduce churn and not lose market share. The second tier of SVOD players, including Paramount+ and Peacock, will make as much noise as possible to win a seat at the table — as evidenced by Peacock’s recent announcement that it will be streaming the winter Olympics in their entirety.

On the transactional side, a lot depends on the fate of movie theaters as this pandemic lumbers on. The early pandemic led to an overall shortening of windows and new-release strategies that ultimately benefited both home entertainment divisions and digital retailers such as Vudu by Fandango, Redbox On Demand, Microsoft and Google Play.

Jim Wuthrich

But while TVOD, and physical media, benefit from shorter windows, it is also impacted by studios accelerating, or re-ordering, SVOD windows. A film available as part of an all-you-can-watch subscription streaming service simply isn’t going to sell or rent nearly as well as it would if there was no “free” competition. And that plays into the bigger picture that the more consumers tune in to SVOD services, the less likely they are to purchase or rent something a la carte.

Jim Wuthrich, president of content distribution for WarnerMedia, says he’s “optimistic that we’ll continue to adapt to the changing nature of COVID and learn to live with it.”

“Although there are many challenges, we’ve learned how to be productive with a distributed workforce, productions are largely back and there’s more consumer choice than ever before — both in amount of content and ways to view,” he says. “It’s a great time to be a fan of linear storytelling. We will continue to improve and expand HBO Max to more markets, while providing a la carte options for fans and collectors. SVOD services will continue to dominate viewing time, with transactional supporting a vital role in discovery, sampling and fandom. Physical media (4K/Blu-ray/DVD) continues to be a meaningful market, with approximately $2 billion in U.S. consumer sales, and largely immune to evolving distribution patterns.”

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On the WarnerMedia side, Wuthrich says, “We have a great movie slate, with four DC films coming to theaters and another installment of ‘Fantastic Beasts.’ We also have a number of series releasing, including the new ‘House of the Dragon,’ a ‘Game of Thrones’ prequel. History has shown these franchises to be powerhouses in driving catalog sales so we are looking forward to a great year.”

Michael Bonner

“Similarly to 2021, we expect a very healthy home entertainment market in 2022, with strong consumer engagement across multiple business models,” says Michael Bonner, president of Universal Pictures Home Entertainment. “Release patterns will likely continue to fluctuate and vary across studios on a title-by-title basis.   

“With the theatrical marketplace continuing to strengthen, the growth of PVOD and the expansion of various SVOD services, the distribution landscape is stronger than ever. As we look ahead, studios have more options and outlets to create value and reach consumers which strengthens our ability to continue investing in great content.”

Bonner maintains that Universal, with its slate of anticipated new releases including Jurassic World: Dominion, Minions: The Rise of Gru and Downton Abbey: A New Era, “is perfectly positioned to draw audiences back into theaters and fuel further transactional growth across the varying windows and platforms.”

Paramount Home Entertainment president Bob Buchi says that “as the global hub for transactional home entertainment across ViacomCBS, our division is exceedingly fortunate and singularly focused on delivering an extraordinary 2022 line-up of the company’s theatrical and television content, as well as third-party acquisitions through our extensive partnerships.”

Bob Buchi

“Our theatrical slate includes new entries in wildly popular franchises, including ‘Scream,’ ‘Top Gun,’ ‘Mission: Impossible,’ ‘Sonic the Hedgehog’ and ‘Jackass,’ which are not only highly anticipated, but also provide excellent opportunities to stoke fan interest in the earlier films and television shows available through home entertainment,” he says.

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On the catalog front, Buchi adds, the division’s most ambitious initiatives are the year-long 50th anniversary salute to The Godfather, “for which we anticipate massive consumer excitement for the film’s return to theaters, new 4K home entertainment releases, and licensed merchandise,” and the first-time-on-4K director’s edition of Star Trek: The Motion Picture, “with fantastic new VFX, which will be released first on Paramount+ and then on home entertainment platforms.”

Cameron Douglas, VP of home entertainment for Fandango, which oversees the Vudu digital retailer, also has high hopes for the new year.

“We expect the TVOD sector to deliver even more value to consumers, as fans sort through a fragmented streaming world, looking for a one-stop-shop entertainment service for movies and TV,” he says. “Because subscription services, by their nature, cater to specific audiences and content offerings, we continue to see consumers utilizing the flexibility, depth and breadth of Vudu’s new release and catalog offering of over 200,000 titles to complement their monthly entertainment needs.”

Cameron Douglas

Douglas says Vudu “is working hard to expand our catalog every day. It’s both a challenge and an opportunity, as we continue to secure new and previously unavailable titles. There’s a variety of titles where digital rights were originally unsecured, but with the demand increasing, there’s more pressure than ever to make these films available for fans to stream at home. We pride ourselves on providing the best quality of experience and we are always working to create a bigger, better home entertainment experience for our customers. We want to be that place where fans can find every beloved movie and show they desire.”

At the top of Vudu’s agenda for the coming year, Douglas says, are plans “to innovate new services for our customers and add new platforms and devices to meet the fan demand in an ever-changing marketplace. We also plan to offer deeper integration with our sister sites, Rotten Tomatoes, for entertainment discovery, recommendation and curated content, and Fandango for crossover promotional opportunities to help enhance the theatrical experience. With our entertainment lifecycle marketing strategy, we look forward to helping new and returning partners more effectively and efficiently reach high-value entertainment audiences at scale.”

The big challenge for home entertainment executives in the coming year is to apply lessons they learned during the pandemic and react quickly to market conditions.

Paramount’s Bob Buchi says that “with two years of experimentation and the expedited evolution of our business, we know we need to remain agile in our windowing and co-promotional strategies as we continue to support the return to theaters and the rapid growth of our streaming service, Paramount+.”

Adam Frank

Adam Frank, SVP of global digital sales and distribution at Lionsgate, says what happens at the box office will trickle down into all aspects of home entertainment.

“Our expectation, given the quality and quantity of the theatrical release slate, is that box office sees significant increase and momentum in 2022 vs. 2021,” Frank said. “The old adage of content is king still rings true, and with more product in the marketplace, consumers will ultimately have more choices and more opportunities in the home entertainment space.”

Jed Grossman, EVP and GM of worldwide sales and distribution at Lionsgate, adds, “We expect all business segments — transactional digital, packaged media, SVOD and AVOD/FAST — to grow year-over-year driven by five key factors:

    • A more robust theatrical release schedule, inclusive of major tentpoles and franchises like ‘Jurassic World,’ ‘Top Gun’ and ‘Black Panther’ that were delayed during the pandemic. Lionsgate has a strong slate that includes Unbearable Weight of Massive Talent, starring Nicolas Cage; Are You There God? It’s Me Margaret; and White Bird, among others; 
    • A more viable theatrical marketplace, with theater-going comfort increasing as vaccine/booster shot rates increase and tentpoles drive attendance;
    • The continued unprecedented demand for new release and library product from SVOD and AVOD/FAST platforms. Lionsgate has achieved record library revenue over the past year;
    • The ability to capitalize on home entertainment consumer behavior, consumer content thirst and technology enhancements — across all offer types — as accelerated by the pandemic lockdowns of 2020 and early 2021; and 
    • Continued collaboration with our theatrical exhibition partners to release films with dynamic windows to meet demand across all platforms.”
Jed Grossman

For independent film distributors, don’t expect much variance in 2022 from established policies of continuing to take aim at the collector and niche markets, particularly on the physical media side.

“For disc sales, MVD and our label partners are focusing on collectible content in deluxe packaging,” says Ed Seaman, COO of MVD Entertainment Group. “We anticipate a similar trajectory for disc sales, which have steadily grown over the last several years. The pandemic certainly gave them a boost, but the resilience and resurgence of disc sales may have more to do with the frustrating customer experience our industry has created in the OTT space. Finding what you want is now very challenging. How many streaming services do you need to subscribe to only to not find the film you want to watch, when you want to watch it? You can more easily find what you want transactionally, but it is still a search. Why not just pay a bit more and own the deluxe-edition disc?”

On the digital front, Seaman says “AVOD/FAST will continue to grow dramatically as consumers clearly embrace and enjoy that model. TVOD is tricky; considering Amazon’s tight curation of non-fiction, we expect some other platforms to step up and become more dominant in that space. There is a real opportunity for platforms focusing on non-fiction to deliver to fans what they want when they want it.”

At MVD, Seaman notes, “we’ve just added Zach Fischel to our leadership team; Zach is a veteran in the entertainment industry and is leading our label management team and marketing department. We’ve additionally moved longtime MVD staffer Chris Callahan to lead our digital sales and operations team. Chris has been with MVD since 1999 and has served in sales management, label management and international licensing. Both of these leaders are committed to improving their areas of responsibility; they have great ideas particularly in digital marketing, an area of overlapped responsibility. We are really excited about 2022!”

So is Mark Fisher, president and CEO of OTT.X, a streaming industry trade group.

“2022 will be a year that portends the future of our industries — a future that, enabled by OTT distribution, is more egalitarian, more global and more diverse,” Fisher says. “While Hollywood continues to make great movies and TV shows, smaller distributors and independent producers from all over the world are making a lot of great content, too — enabling the consumer to be less reliant and dependent on content from the big studios and on domestic-produced content. And, while the big ‘Pluses’ and ‘Maxes’ continue to grow, consumers are finding plenty of additional content on indie and niche channels, both FAST and on demand.”

Looking Back at 2021: Home Entertainment Struggles to Find the New Normal

NEWS ANALYSIS — The shadow of COVID-19 continued to hang over 2021, despite rosy predictions the previous summer that the worst would soon be over.

By mid-year, with a vaccine rollout in full swing, most restrictions were lifted and theaters were welcoming back moviegoers, particularly after studios once again began stepping up movie production. This theatrical recovery continued, unchecked, through the emergence of the summer Delta variant and the beginning of the winter Omicron surge. Indeed, the December 2021 theatrical opening of Spider-Man: No Way Home generated $260 million in domestic ticket sales, the second-highest North American box office opening. Domestic box office revenue for 2021 is estimated at $4.5 billion, more than twice what it generated in 2020 but still down 61% from 2019, the last year before the virus hit.

Meanwhile, the entertainment world in 2021 was rocked by two major announcements: Amazon bought a movie studio, MGM, for $8.45 billion, and AT&T announced plans to spin-off WarnerMedia through a merger with Discovery, resulting in a new media powerhouse, Warner Bros. Discovery, under Discovery Inc.’s CEO David Zaslav. The deal, approved by the European Commission in December, is expected to be completed in mid-2022, pending Discovery shareholder and federal regulatory approval.

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Sadly, the year ended on a down note, with Omicron leading to theater closures in Europe and the cancellation or postponement of several key entertainment-industry events, including The Critics Choice Awards, the National Board of Review’s annual gala, the Palm Springs Film Festival, and BAFTA Los Angeles’ annual tea party for the awards season.

The year also saw the vindication of WarnerMedia’s controversial plan, announced at the end of the prior year, to release its entire theatrical slate simultaneously on its HBO Max streaming service. Initially railed against as a death blow to the movie business, the strategy in retrospect kept the business alive, providing a steady stream of high-profile new product to movie theaters hungry for fresh films, even if they no longer would be exclusive to the big screen.

Jim Wuthrich

“2021 marked the first anniversary of HBO Max and, with it, a whole new distribution pattern for movies,” said Jim Wuthrich, president of content distribution for WarnerMedia. “Due to the pandemic and uncertainty of closures, WarnerMedia made all of its movies available on HBO Max and in theaters at the same time. This was great for movie fans, as they could watch movies such as Wonder Woman 1984 or Godzilla vs. Kong at home or in theaters.”

Mixed Results

On the home entertainment front, 2021 was the proverbial mixed bag for the industry’s two segments, subscription streaming and transactional/physical.

The first few months of 2021 were clouded in uncertainty, as the winter surge of the virus delayed the reopening of movie theaters well into the spring. Studios held back their big releases until their opening strategy — theaters, PVOD or both — could be determined.

Streaming, not surprisingly, continued to flourish at the accelerated pace that began a year earlier with the onset of the pandemic. Consumer spending on subscription video-on-demand services soared more than 20% in the first half, according to DEG: The Digital Entertainment Group estimates — and those numbers don’t include Amazon Prime Video, which is considered in the same league as Netflix.

Amy Jo Smith

“The growth in subscription streaming in 2021 can be attributed to consumers who continued to spend time at home, increasing their engagement with content offered through an abundance of new direct-to-consumer subscription services, including Disney+, HBO Max, Paramount+, Peacock, AMC+ and many others,” said Amy Jo Smith, DEG president and CEO. “These services provide consumers premium content with convenience and value.”

Disc and digital sales of movies in the first half of 2021, meanwhile, were off by more than 25% from the prior year, while combined disc and digital rental (TVOD) revenue suffered a first-half decline of more than 30%, according to estimates prepared by DEG: The Digital Entertainment Group.

TVOD Recovers

As the year progressed, subscription streaming continued to clearly dominate home entertainment, even as the transactional side of the business began to recover in the wake of theatrical reopenings that remained on track despite the summer emergence of the more contagious Delta variant. Final year-end DEG numbers are not yet in, but by the third quarter disc and digital sales had trimmed their quarterly decline to 12% while rentals were off just 14%.

“Factors limiting transactional growth in 2021 include few new theatrical releases, which are historically a key driver of home entertainment spending,” Smith said. ”This was particularly true early in the year. Spending on library titles, however, has been notably strong throughout the pandemic, and with theatrical new releases restarting mid-year, we saw spending on home purchases of new releases beginning to pick up in the third quarter. We expect to see this trend continuing when the full year is tallied.”

“Looking back at the year, 2021 certainly had its challenges, but there were some high notes as well for our business,” notes Jason Spivak, EVP of distribution for North American Television & Home Entertainment at Sony Pictures Entertainment.

Jason Spivak

“Early in the year, we were blown away by the tremendous success of Monster Hunter on both physical and digital formats. We achieved strong PVOD results on The Father and Don’t Breathe 2. And throughout the year we saw consistent strength in our digital catalog,  particularly our drafting efforts around the ‘Spider-Man’ franchise.

“The biggest highlight for our business, however, has been the fourth-quarter theatrical performances of Venom: Let There Be CarnageGhostbusters: Afterlife and, of course, the worldwide phenomenon that is Spider-Man: No Way Home.  These films demonstrate that consumers are excited to return to theaters and that they crave the communal experience that can only be achieved in a movie theater.”

WarnerMedia’s Jim Wuthrich said his company’s strategy of releasing its news films to theaters and streaming on the same day “did add an element of unpredictability to [traditional, transactional] home entertainment in forecasting demand, as it was unique to have streaming as the first window.” Ultimately, he said, “we found that there is robust demand for transactional (EST/TVOD/physical), despite the change in windowing.”

Bob Buchi

Bob Buchi, president of Paramount Home Entertainment, said that while 2021 “certainly did not go as planned, consumers again turned to home entertainment options in record numbers.  Throughout the year’s unprecedented circumstances, Paramount continued to experiment with new release windowing, maximized the power of our exceptional library, and supported the ongoing growth of Paramount+.”

With very different release strategies, Buchi added, A Quiet Place Part II, Snake Eyes and Paw Patrol: The Movie “delivered tremendous results across each studio window thanks to the cumulative marketing muscle and cross-company promotional efforts, which bodes well for the ongoing coexistence of every platform.”

Paramount also saw consumer spending on catalog titles remain strong, “representing nearly 60% of annual revenue and holding steady to slightly up compared to the extraordinary sales in 2020 across physical and digital worldwide,” Buchi said.  “Digital sales, in particular, have been exceptionally strong during the pandemic, with a compounded annual growth rate of over 25% compared to pre-pandemic 2019 levels globally.”

Paramount also scored with the 40th anniversary of the “Indiana Jones” franchise with the first 4K Ultra HD release of the films on both disc and digital platforms, Buchi noted. “And on the television front, home entertainment consumers continue to flock to ‘Yellowstone,’ with nearly 3 million digital transactions for season four, which launched in November.”

Michael Bonner

Universal Pictures Home Entertainment president Michael Bonner said that while 2021 “remained unpredictable and challenging on several fronts … consumers’ engagement with content has never been stronger. During these unprecedented times, the studios have served audiences well by embracing unconventional release patterns and new business models giving consumers more ways to access and enjoy movies.”

Bonner added that “engagement is up, and it’s happening across various services and business models. For Universal, our new release home entertainment business remained very strong in 2021 as we saw with F9, The Croods: A New Age, Let Him Go, Promising Young Woman and several others, with a significant contribution coming from our new PVOD window and followed by our traditional home entertainment offering.  On top of that, similar to 2020, we saw our library business reaching historical levels.”

Distribution Deals

On the physical side of the business, Sony Pictures Home Entertainment and Lionsgate in February 2021 announced a multiyear agreement in which Sony will handle distribution of Lionsgate’s DVD/Blu-ray Disc releases in the U.S. and Canada beginning in July. Lionsgate’s North American packaged-media distribution had been handled by the former 20th Century Fox Home Entertainment, which was acquired in 2019 by Disney.

Lionsgate continues to maintain its own independent sales and marketing teams, but is leveraging SPHE’s supply chain and distribution services. At the time Sony’s Jason Spivak said, “By working together, we can identify and leverage efficiencies in the supply chain that will benefit not only our respective studios, but also retailers and, ultimately, the millions of consumers who enjoy Sony Pictures and Lionsgate feature films and TV programs in the 4K UHD, Blu-ray and DVD formats.”

Two months after the Sony-Lionsgate deal was announced came the official launch of Studio Distribution Services (SDS), a joint venture between Warner Bros. Home Entertainment and Universal Pictures Home Entertainment to distribute packaged media in the United States and Canada.

“Starting any business in a pandemic is challenging, but one that relies on delivering physical goods to stores across two countries during a supply chain upheaval is not for the faint of heart,” WarnerMedia’s Wuthrich said. “The SDS team, along with the studios, did a great job managing through a challenging time.”

Eddie Cunningham, the former Universal Pictures Home Entertainment president who was tapped to run SDS, told Media Play News earlier in the year, “We, with our many supply chain partners in manufacturing, distribution and freight, are doing everything in our power to mitigate those pressure points.

“Sometimes meeting delivery dates and keeping retail on-shelf availability at our usual high industry standards has been difficult. It is a huge focus across our company and everything in supply chain that we used to check weekly is now daily, and everything we did daily is almost hourly, as we constantly re-assess priorities.”

Streaming Fatigue and the Rise of AVOD

While disc sales continue to be a priority for the big Hollywood studios, along with digital movie sales and rentals, streaming clearly remains the dominant force in home entertainment. As of the end of the third quarter, streaming accounted for nearly 80% of total consumer spending this year on home entertainment, or $18.6 billion. Total consumer spending on disc and digital sales and rentals in the first nine months of the year was just $5 billion.

And yet subscription streaming did face several challenges, including consumer fatigue — stemming largely from the rising costs of subscribing to multiple services — and rapid gains in free ad-supported platforms such as Pluto and Tubi. In professional consultancy Deloitte’s 2021 Digital Media Survey, more than half of the respondents said they are re-evaluating multiple streaming subscriptions, and 40% said they planned on terminating at least one subscription. Adriana Waterston, SVP of insights and strategy at Horowitz, told Media Play News in November that streamers are feeling overwhelmed by the proliferation of services, with many struggling to figure out what to watch, and where.

In December, a TVision survey found that time spent on subscription video-on-demand platforms decreased 8.6% from the first quarter to the third quarter of 2021, while time spent on ad-supported VOD increased 9.3%. It should be noted that the SVOD decline may be due, at least in part, to the vaccine rollout and people once again venturing out into the world, while AVOD growth includes not just SVOD dropouts but also linear TV audiences. Regardless, speaking in December at an OTT.X conference, Colin Dixon of nScreenMedia said the FAST/AVOD business is projected to reach $4 billion by 2024.

Mark Fisher

Mark Fisher, president and CEO of OTT.X, the trade association for streamers, said free ad-supported streaming is just one more option that is leading to continued growth for the overall home entertainment business.

“Internet-based delivery today gives the consumer so many more opportunities and more choices to enjoy great content — both on demand and linear,” he said. “Some prefer long-form, some short-form; some prefer to watch without ads, while others watch ads to avoid paying; some like to watch what they want, when they want, while others like the sit-back FAST experience; some want to build their cloud-based collections and others just want to watch once; some like to watch big-budget spectacles and other enjoy good indie-produced stories; and many are adding the diversity of international content and niche content and channels. Opportunity and choice benefit everybody.”

He’s got a point. Overall, the home entertainment business is on track for another record year. The DEG’s estimate of $23.6 billion in total consumer spending in the first nine months of this year is up 6.3% from the spending total at this same point in 2020.

Converging Businesses

And the two sectors of the business, streaming and transactional, are converging.

One of best examples of this is that while Redbox’s legacy disc-rental kiosks remain the company’s cash cow, a massive digital transformation — fueled by the company going public in October — is expanding the Redbox brand into digital, with a particular emphasis on streaming. Redbox Free Live TV, an ad-supported streaming service that launched in February 2020, now has more than 100 channels offering viewers free access to movies and television shows, news, and lifestyle and sports entertainment programming. In December, Redbox began advertising its digital products on its kiosks.

Galen Smith

Asked how Redbox fared in 2021, CEO Galen Smith said that on the kiosk and TVOD side, “ We continued to see a significant impact on the quantity of new release movies due to production being paused as a result of COVID, with fewer movies in 2021 than 2020. The good news is we anticipate the number of new theatrical movies releasing in 2022 should be back to levels not seen since 2019.”

As for streaming, he said, “2021 was a growth year for us — as we rapidly scaled both our AVOD service and FAST channels.”

Redbox going public, Smith noted, “provided us with additional capital to invest in the ongoing digital transformation of Redbox, as we built on our transactional video-on-demand service with growth in AVOD (more than 5,000 titles on demand) and FAST (more than 125 linear channels including five that are Redbox branded) and a subscription channels business coming in 2022.”

On the Indie Front

Independent film distributors, meanwhile, are finding the plethora of streaming services a whole new market for their films, augmenting their traditional TVOD and physical release.

“It’s always a good thing when new channels appear where we can license our films,” said Joe Amodei, president and CEO of Virgil Films & Entertainment. “The major accounts still rule in this area, but as they have dwindled down their buying in favor of original films and series we’ve enjoyed doing business with this new group of folks. It’s great.”

Indies also say they are finding their disc businesses remarkably resilient. Ed Seaman, COO of MVD Entertainment, said 4K Ultra HD Blu-ray “continues to surprise us. Sales are really strong, possibly because there aren’t a ton of products in this space, but mainly because our trade partners/content providers are choosing excellent content and do a great job lovingly restoring and filling these editions with great bells and whistles.

“Compared to last year, 2021 was far more stable. We knew we were in a pandemic and we didn’t have the fear of the unknown like last year, where we didn’t know what impact a lockdown would have on our business and our customers. We learned in 2020 that when everyone is stuck at home during a pandemic, home entertainment products and services are pretty popular. We were able to execute our plans with greater confidence in 2021 that the market was not going to fall apart, and we had a really strong year as a result.”

John Rotella

John Rotella, SVP for Shout! Factory, said the company saw “unbelievable growth in catalog and new-release sales” during the pandemic year of 2020, “and that swell carried forward into 2021.”

Shout! Factory, he said, “saw one of our best years ever on gross shipments and an equally impressive net business. We also saw growth in POS revenue in 2021. The DVD and Steelbook/4K business grew again as Blu-ray sales stayed even compared to 2020. New-release and catalog as a whole all improved from a surprising and productive year, led by our new Western, Old Henry, and 4K ‘Halloween’ releases.”

Some of this success, Rotella said, “can also be attributed to a less competitive new-release marketplace, upgraded and repackaged catalog, developing more valuable collectable products at a higher price and managing the right genre that works for mass [merchants]. Walmart and Amazon continue to offer new-release and catalog opportunities, and we saw an e-commerce surge in business. Looking back, 2021 unexpectedly managed to match 2020 in POS and shipments and remained far superior to 2019 in every area.”

On the downside, the supply chain crisis has compounded ongoing problems with limited replication opportunities, resulting in delays in bringing product to market.

“We were hugely affected by inbound transportation challenges, mostly from the U.K. and Europe, where many of our top clients reside,” MVD’s Seaman said. The situation improved toward the end of the year, he said. “I doubt the Omicron strain will cause lockdowns again, and I’m keeping my fingers are crossed that the labor challenges at the border are mostly conquered,” he said.

New Ways of Doing Things

Another home entertainment trend that continued in 2021 is the consolidation of theatrical and home entertainment teams. Warner Bros., Sony Pictures and Lionsgate went through their respective integrations in 2020; Paramount Pictures followed in March 2021 with a restructuring that led to the exit of 23 home entertainment marketing and distribution personnel, including marketing chief Vincent Marcais, respected publicity head Brenda Ciccone, and Dina Marovich, SVP of worldwide media and interactive marketing.

A new way of doing things sometimes finds home entertainment executives branching out beyond their wheelhouses.

“Somewhat out of the traditional course of business, our team successfully managed the launch of Virtual Reality experiences at the new Harry Potter store in New York City,” Warner’s Wuthrich said. “These two experiences allow Potter fans the ultimate experience of visiting Hogwarts or flying high above London on broomsticks while battling Death Eaters. The experiences have sold out since launching this summer and have been garnering rave reviews.  We look forward to expanding the number of locations in 2022 so more Potter fans will have a chance to live the experience.”

Q&A: MVD’s Ed Seaman Relishes Running and Expanding the Family Business

Ed Seaman is chief operating officer of MVD Entertainment Group, a leading independent distributor of filmed content in a variety of genres, from horror to documentary, with a special emphasis on music.

“Serving artists and audiences” is MVD Entertainment’s purpose statement and has served as a guiding light for Seaman throughout his career. Starting with MVD in 1989, Ed Seaman joined the family business started by his father in 1987, longtime industry veteran Tom Seaman.

Having learned every aspect of the business, by the early 2000s Ed Seaman was running MVD, and transformed it from being primarily a wholesale entity for music videotapes to a traditional full-service audio and video distribution firm, and exponentially grew the business.

Today, MVD exclusively represents a vast catalog of audio and visual content on DVD, Blu-ray, CD, vinyl and digital rights, worldwide. MVD’s customer base consists of major retail chains and digital platforms, along with a strong commitment to independent retailers and digital sites.

Media Play News asked Seaman about MVD’s origins, its footprint in the industry and trends in home entertainment. 

MPN: Tell us about the genesis of MVD and what the company has been known for over the years.

Seaman: MVD is a true “mom and pop” story; my parents started it in their family room in the mid-1980s. My father was in the music business his whole life, and he launched MVD as a wholesaler for music videotapes. My sister Eve Edwards joined in 1988, and I came on board in 1989. In the late 1990s, we converted a number of wholesale relationships to exclusive DVD licensing and distribution deals, and we started seeing real growth, acting at that time as part self-distributed label, and part wholesaler. By the early 2000s, we started offering non-music films, which was a big departure for us — and very early on acquired a strong catalog of digital rights on our content. And by 2006 we entered the audio distribution business — selling both physically and digitally.

MPN: What’s MVD up to now? How does MVD acquire product?

Seaman: Within the last 10 years we’ve grown dramatically; our main focus is exclusively distributing great video and audio labels. We are really proud of our representation of great brands like Arrow Films, Blue Underground, Severin, Synapse, and many more from the film side. We continue to sign content to our own brands (MVD Rewind, MVD Marquee), with our video specialist Eric Wilkinson scouring the earth to find hidden gems. On the music side, it is a similar focus; we have great record labels like Time Life, Bear Family, Made in Germany, and much more. We’ve never lost our interest in music-related films too — it is where we come from and will always hold a special place for us.

MPN: How many titles do you have in your catalog and how many do you generally release each year?

Seaman: A lot … I’d say we release around 75 titles per month on film, and another 150 or so on audio. Our team does a great job evaluating and attacking the opportunities on each release, and focusing on the biggest and best opportunities. We have excellent data systems that help illuminate and execute those opportunities, and we’ve got an amazing dedicated team, many of whom have spent their entire career at MVD.

MPN: What is MVD’s footprint in the digital marketplace on streaming services or digital purchase and rental?

Seaman: We’ve been very progressive all along in the digital landscape with a vast catalog of exclusively distributed content. We have great direct relationships with all the major platforms, both for film and for music, and we are aggressive when it comes to working with new and upcoming services, provided they have a sound model and sound finances. MVD built its own delivery systems for digital video, meaning we don’t go through a lab to get our goods delivered to the vast majority of streaming services. That saves our content providers a lot of resources, and allows us to try out some of the newer services without as much start-up risk.

MPN: How many video labels do you distribute and are you looking for more? What can you offer a label?

Seaman: We have around 30 active video labels — and yes we are ready to welcome more. MVD brings a lot to the table — quick responses and great advice, monthly reliable payments, transparent accounting, including massive visibility through our b2b site, marketing services (which we don’t mark up), possible manufacturing through our replicators (not marked up), and more. Overall, we strive for trade partnerships in our relationships. Our trade partners tell it better than I can at https://mvdentertainment.com/why-mvd/

MPN: What are the trends you are seeing in physical media? What’s the format breakdown?

Seaman: Collectible products given the deluxe treatment is the strongest trend we see. It has to be the right type of film of course with cult-like status, but labels that painstakingly transfer, clean and correct old film to 4K, create and add new content, and beautifully package these films see some great rewards. So, yes, UHD is doing really well, in some cases outselling their Blu-ray companions. The collectors are clearly hungry for well-done UHD.

MVD, Rue Morgue Team on ‘Midnight Movie Society’ SVOD Service

Independent distributor MVD Entertainment Group and Rue Morgue, a magazine devoted to horror fiction, have joined to launch a curated subscription video-on-demand (SVOD) service specializing in extreme underground, taboo and cult horror movies.

The partners promise that the “Midnight Movie Society” will provide genre film fans with a library of “shocking underground, outrageous gore, creature features, cult classics and much more. Those with a taste for the weirdest and wildest reaches of genre cinema will not be disappointed.”

The new SVOD service launches Sept. 13 on iOS, Roku and the web. The cost is $4.99 per month, or $47.88 for a one-year subscription.

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“The bigger platforms are catering to the masses and have gone puritanical in many cases, making it very difficult for filmmakers to reach their audience,” said MVD COO Ed Seaman. “MVD has a great deal of this type of content and when it is live on major platforms, it performs really well — maybe too well for some of the mainstream platforms.”

Seaman said that the Midnight Movie Society also will cater to more traditional horror fans, pulling from the thousands of film hours in MVD’s vast catalog. In addition, Rue Morgue will be finding and curating fresh and unusual content for the service.

“As larger streaming platforms continue to crack down on content, there’s an urgent need to create a space for boundary-pushing films unencumbered by strangling content restrictions,” said Adrianna Gober, director of programming. “As a lifelong horror fan, I’m proud and excited to be working with MVD Entertainment Group and genre champions Rue Morgue Magazine to bring Midnight Movie Society to the masses.”

Rob Hyman, MVD’s digital director, said Rue Morgue is a “household name among horror fans, and we anticipate our SVOD service and selection will be embraced by their fans.”