‘Dolittle’ Returns Atop Weekly U.K. Home Entertainment Chart

Universal Pictures Home Entertainment’s Dolittle edged back to the top spot on the U.K.’s weekly Official Film Chart (packaged media/digital) through July 1. The movie entered the chart at No. 1 in June. The Robert Downey Jr. starrer bested Emma (UPHE) by 193 unit sales, bumping Warner Home Video’s Birds of Prey and the Fantabulous Emancipation of One Harley Quinn to the third spot.

Emma features Anya Taylor-Joy as the eponymous character in this 2020 adaptation of Jane Austen’s comedy of manners.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Dark Waters (UPHE) is the only new entry on the chart at No. 4 via digital downloads only. Starring Mark Ruffalo, Dark Waters details the real-life case against the chemical manufacturing corporation DuPont after they contaminated a town with unregulated chemicals.

Previous chart topper 1917 (eOne) drops to fifth, and Paramount Pictures’ Sonic the Hedgehog slips a spot to sixth.

The Invisible Man (UPHE) leapfrogged 11 spots to seventh, marking its Top 10 debut. The movie stars Elisabeth Moss, whose character’s abusive ex (who is invisible) supposedly took his own life.  But she suspects his death was a hoax.

Follow us on Instagram

Sony Pictures Home Entertainment’s Jumanji: The Next Level staves off falling out of the Top 10, climbing two spots to eighth. Disney’s Onward drops to ninth, and Frozen 2 returns to the countdown in tenth.

Futuresource: Amazon’s Canadian Launch of Digital Movie Sales/Rentals Expected to Jumpstart Video Market

With the coronavirus pandemic projected to shrink Canadian consumer spending on video entertainment by 6% in 2020, the sector is expected to increase by 11% since 2019, thanks in part to Amazon Prime Video launching first-time digital sales/rentals of movies in April, according to new data from Futuresource Consulting.

Amazon’s transactional VOD launch is expected to help turn around a flatlining home entertainment sector and drive the market to a new level over the coming years, leveraging the ability to monetize consumers who are already engaged on the Prime Video platform for SVOD and can now find movies to rent or buy without having to leave the user interface.

Other factors jumpstarting Canadian consumer video spending includes a resurgence in box office, driven by a strong slate of releases enhanced by this year’s postponements and ongoing SVOD growth.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Despite the challenges faced by the fallout from COVID-19, there have been some high points in the market,” market analyst Tristan Veale said in a statement. “SVOD has led the charge, with our forecasts showing a 39% increase in revenue in 2020.”

While social distancing and lockdown measures have resulted in consumers immersing themselves in streaming video services, including Disney+, this has not carried enough momentum to supersede the deficit created by the shuttered box office and large declines in physical media. Other factors include pay-TV cord cutting, dropping of sports TV packages, due to cancellations of sporting events.

SVOD will continue to drive growth in the Canadian video market, growing from CA$1.4 billion last year, to achieve in excess of CA$3.3 billion in 2024. The launch of Disney+ has been highly successful, bolstering the industry with nearly two million subscribers signing up before the end of 2019.

Amazon’s Prime service, in terms of household penetration, is also performing well, accelerating faster in Canada than it did in the U.S. or the U.K. The proportion of subscribers who are watching Prime’s video content is currently low, although Futuresource does expect this to rise.

As is the case in many territories, Netflix continues to dominate. It remains the market leader with 6.6 million subscribers at the end of last year, showing strong growth despite maturity. However, now at 45% household penetration and with a high proportion of password sharing, Futuresource expects future growth to become more difficult.

Bell Media’s Crave celebrated its fifth year in 2019 with strong growth helped along by HBO content and the final season of “Game of Thrones”. Crave’s peak of 2.7 million subs came during summer 2019, before falling back slightly by year end. Apple TV+ joined the market in November and has generated one million subs by the end of 2019. However, many are free annual subscription due to qualifying device purchases, retention once the free trial expires will be key.

“Despite the short-term industry challenges, next year’s recovery is expected to generate the largest consumer expenditure on video entertainment ever recorded,” Veale said. “What’s more, the growth will continue to be sustained, with an average expansion of 4% each year from 2020 to 2024, achieving nearly CA$13 billion in 2024.”

Lionsgate’s Silent Workhorse: Home Entertainment

NEWS ANALYSIS — To hear Lionsgate CEO Jon Feltheimer on the recent fiscal call, the studio/distributor is pushing aggressively into the over-the-top video market via Starz and positioning itself as a major supplier of original television content.

While the longtime executive gave a shoutout to home entertainment for generating a record $600 million in catalog revenue for the fiscal year ended March 31, Feltheimer didn’t elaborate further on DVD/Blu-ray Disc and digital movies’ outsized impact on the company’s motion picture segment revenue — other than to mention Lionsgate’s penchant for “creating and owning iconic IP with tremendous evergreen value.”

Indeed, Lionsgate sold about $257 million in packaged-media product in the fiscal year, down about $500,000 from 2019. Disc sales of major feature movies increased nearly 43% to $154.8 million from $108.4 million in the previous-year period.

Packaged media/digital movies represented 42.2% of the motion picture segment’s $1.67 billion revenue for the year — twice the percentage of theatrical, according to Lionsgate’s 10K fiscal filing released May 27.  The tally is up 14.1% from revenue of $1.46 billion in fiscal 2019. The motion picture group represented 43% of Lionsgate’s consolidated revenue for FY 2020.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Lionsgate packaged-media releases are distributed in North America by Disney-owned 20th Century Fox Home Entertainment, and by Lionsgate U.K. internationally.

Lionsgate said it shipped 45 million combined DVD/Blu-ray Disc units in fiscal 2020, ranking sixth among all studios. In the 2019 calendar year, the studio held 9% market share in home entertainment, including a box office-to-home entertainment conversion rate 25% above the industry average.

Box office-to-home entertainment conversion rate is calculated as the ratio of the total of both first cycle DVD release revenue and total digital platform revenue for a theatrical release compared to the total North American revenue from such theatrical release.

Top-selling discs in the fiscal year included theatrical releases Cold Pursuit, Tyler Perry’s Madea Family Funeral, Rambo: Last Blood and Midway.

AMC Theatres Threatens to Drop Distribution of Universal Pictures Movies; Studio Responds

The world’s largest movie theater chain is fighting back against NBCUniversal’s plans to release at least some movies simultaneously to theaters and to homes.

On the heels of Universal Pictures’ animated feature film Trolls World Tour generating upwards of $100 million from premium video-on-demand and other digital channels in less than three weeks of release, NBCUniversal CEO Jeff Shell April 28 told The Wall Street Journal the studio would pursue a simultaneous theatrical/home entertainment release strategy going forward.

“The results for Trolls World Tour exceeded our expectations and demonstrated the viability of PVOD,” Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”

AMC Theatres CEO Adam Aron promptly fired off a letter to the studio’s chairwoman, Donna Langley, saying it would no longer screen Universal movies if it turns a cold shoulder to the traditional 90-day theatrical window.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment,” Aron wrote in the letter. “Going forward, AMC will not license any Universal movies in any of our 1,000 theaters globally on these terms.”

AMC’s strategy mirrors exhibitor sentiment that has shunned Netflix original movies since the subscription streaming video behemoth releases its movies concurrently with any theatrical distribution.

Aron, along with 600 AMC executives, has been furloughed as the chain saw its business literally shuttered over night to help curb spread of the coronavirus. He said Shell’s comments suggest Universal is moving away from a long-term business model between AMC and Universal.

Follow us on Instagram

Aron said the chain, which remains largely closed despite governors in select states authorizing the re-opening of theaters, would not distribute Universal — or any other studio’s content — globally if they stray away from the “theaters first” doctrine.

The executive said theatrical releases is a segue for future retail distribution, including boosting publicity, positive word-of-mouth, critical acclaim and downstream revenue. Aron said Universal wants to have its cake and eat it too by combining distribution channels.

“[Universal] assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on how its actions affect us,” Aron said.

He said AMC has invested significant time and energy with Universal executives over the past few years trying to figure out a new distribution models that would be beneficial both parties. Aron has previously mentioned helping studios distribute movies on its website and in theaters — the latter through packaged media.

“AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours,” Aron wrote. “However, in the absence of such discussions, and an acceptable conclusion thereto, our decades of incredibly successful business activity together has sadly come to an end.”

Universal Pictures, in a statement, called Aron’s letter disappointing. It said the decision to release Trolls World Tour on PVOD was done to offer consumers sheltering in home an alternative entertainment option.

“Based on the enthusiastic response to the film, we believe we made the right move,” Universal said. “In fact, given the choice of not releasing Trolls World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear.”

The studio said it still believes in the theatrical business model and said it has made no comment to contrary. It said it always seeks to make its movies available to as wide an audience as possible.

“We look forward to having additional private conversations with our exhibition partners, but are disappointed by this seemingly coordinated attempt from AMC and [trade group National Association of Theatre Owners] to confuse our position and our actions,” Universal said.

Warner Bros. Q1 Operating Profit Declines 55%

With studio operations shuttered for nearly a third of the quarter due to the coronavirus pandemic, Warner Bros. April 22 reported operating income of $249 million, down about 55% from operating income of $547 million in the previous-year period. Revenue from theatrical product dropped almost 27% to $1.1 billion, from $1.5 billion last year.

Television content revenue increased 9% to $1.77 billion from $1.6 billion. Home entertainment and video games saw revenue drop less than 10% to $365 million from $399 million during the previous-year period.

Follow us on Instagram

Oscar-winning Joker remains the studio’s top-selling packaged media of the year.

Warner, like other studios, has pushed back release of tentpole titles such as Wonder Woman 1984 to later this year or into 2021.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

European Commission Approves Warner, Universal Home Entertainment Joint Venture

The European Commission April 7 formally cleared creation of a previously announced home entertainment joint venture between Warner Bros. Home Entertainment and Universal Pictures Home Entertainment. Regulators approved the deal under an expedited merger review process.

The 10-year pact helps the two studios cut overhead costs involving the distribution of DVDs, Blu-rays and 4K UHD Blu-ray Discs in Germany, Austria, Switzerland, Japan, in addition to manufacturing and distributing packaged media in the U.S. and Canada. The JV is projected to begin later this year.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Warner will oversee the distribution of Universal’s physical home entertainment products in the U.K., Italy, Belgium, Holland and Luxembourg starting in the first quarter 2021.

Follow us on Instagram

Universal and Warner Bros. executives will run the JV, with overall leadership by Eddie Cunningham, president of Universal Pictures’ worldwide home entertainment.

Analysts: Home Entertainment ‘Virus’ Bump Could Be Short-Lived

With studios shuttered and live sports on indefinite suspension due to the threat of the coronavirus, home entertainment options ranging from broadcast and pay-TV, transactional VOD, DVD and streaming video are projected to see at least short-term bumps in viewership and revenue during the “social distancing” period, according to media analysts.

Nielsen reports “TV usage” in South Korea, Italy and the United States increased double digits during the initial weeks of the virus. Nielsen’s classification includes broadcast/pay-TV, VOD, AVOD, SVOD and the DVR.

Data from Sensor Tower found Netflix sign-ups via its app increased 57% and 34% in Italy and Spain, respectively. Streaming Elements reported live streaming via Facebook, YouTube, Twitch and other platforms jumped 66% in Italy in February. The country is on virtual lockdown after more than 2,500 people have died from the virus.

Follow us on Instagram

“[SVOD] is an obvious beneficiary if consumers stay home due to coronavirus concerns, and this has been reflected in considerable stock price outperformance this week,” Dan Salmon with BMO Capital Market wrote in a March 13 note.

JC O’Hara, analyst with MKM Partners, told CNBC that consumers “stuck inside” all day during a pandemic quarantine would inevitably turn on the TV. O’Hara said streaming services such as Netflix, Hulu, Amazon Prime Video, as well as ad-supported VOD platforms, would all benefit.

Neil Begley, with Moody’s Investors Services, back in January suggested that if the virus became widespread but short of panic, home entertainment content such as TV shows and films on Netflix, Disney+, Comcast’s Peacock, AT&T’s HBO Max, among others, would rule the day.

But should the pandemic last longer, leading to a global recession as some have projected, consumer spending on home entertainment would fall to the wayside, according to analysts Laura Martin with Needham and Craig Moffett with MoffettNathanson.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“[SVOD] will be replaced pretty quickly by the necessity of reducing monthly bills, when people will have to deal with the financial impacts of a recession,” Moffett told The New York Times. “Cord-cutting will accelerate with a vengeance.”

A long-term pandemic and fiscal gains in home entertainment would likely be offset by a fiscal hardships in households as viewers — suddenly out of job due to sever downturns in the economy — reconsider spending on non-essential items.

“Cost will become that much more urgent,” Moffett said. “There are going to be very large parts of the population out of work.”

And some of those unemployed could work in media. With ESPN and sports-themed channels unable to broadcast live content, consumers would question spending on platforms largely streaming classic reruns and endless coronavirus chatter.

Disney-owned ESPN and WarnerMedia Entertainment’s Turner are projected to lose $481 million and $210 million in NBA-related ad-revenue alone. NBCUniversal has $1.2 billion in advertising at stake for the 2020 Tokyo Summer Olympics — with President Trump now suggesting the latter could be postponed — a scenario one Games executive has called “impossible.” NBCU parent Comcast says it has insurance should the Games be canceled.

Apple CEO Tim Cook, who has already cautioned the tech giant would miss quarterly fiscal projections on iPhone sales due to the virus, told Fox Business he thinks the virus has run its course in China, epicenter to the COVID-19 outbreak.

“It feels to me that China is getting the coronavirus under control,” Cook said on March 12. “You look at the numbers, they’re coming down day by day by day. And so I’m very optimistic there.”

Indeed, China March 18 reported no new COVID-19 infections throughout the country on March 17. That news comes the day after government officials expelled media representatives from major U.S. news organizations.

 

Sky Selling Theatrical Releases in the Home

With the shutdown of theatres worldwide, satellite TV operator Sky has begun offering digital video access to select theatrical releases in the home. The move is the latest among media companies upending traditional distribution channels as consumers face quarantine situations against the spread of the coronavirus (COVID-19).

Sky, which is owned by Comcast, parent of NBCUniversal, has 24 million customers across seven countries in Europe. It is following a strategy taken by Universal Pictures in the United States, which has begun offering digital retail access to select theatrical movies.

Follow us on Instagram

Sky Store will have a range of NBCU titles available the same day as their global cinema release. They will be priced at £15.99 ($18.99). This is available for Sky+ and Sky Q subscribers. Sky Store digital sales typically include a DVD backup sent in the mail.

The program begins with DreamWorks Animation’s Trolls World Tour April 6. This is the first time customers have been able to rent NBCUniversal movies as soon as they hit cinemas. On March 20, The Hunt, The Invisible Man and Emma will also be available on-demand on Sky Store, following their recent release in cinemas.

“We’re working hard at Sky to make sure we continue to look after our customers,” Stephen van Rooyen, EVP & CEO of Sky UK and Europe, said in a statement. “We’re also introducing some things to help make life a little easier for anyone at home trying to work, stay connected to loved ones, or keep the family entertained.”

During the ongoing pandemic, Sky will also make it “Go Extra” platform available free to all customers so European households have access to Sky TV on three screens at the same time. Calls to U.K. landlines any time of day will be free for existing Sky Talk customers through the end of April.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Sky Mobile subscribers will get an extra 10GB data free added to their accounts. Call centers and engineers will prioritize the needs of existing customers to ensure their service keeps running smoothly.

Premium platform Sky Q will soon add over-the-top video platform Disney+ (March 24), in addition to YouTube Kids.

 

Home Entertainment ‘Social Distancing’ — Boon or Double-Edged Sword?

With movie theaters shuttered and government officials calling on people not to congregate in groups larger than 10, home entertainment, including transactional VOD and packaged media, is getting a boost from consumers sequestered at home during the spread of the coronavirus pandemic.

Universal Pictures said it is releasing select theatrical titles concurrent with home entertainment following a weekend box office that saw its five releases generate a paltry $11.7 million in collective ticket sales.

Warner is putting Harley Quinn: Birds of Prey early into digital retail channels. It’s not a big gamble considering the movie has been out in theaters since Feb. 7.

Follow us on Instagram

“Yes, they will see increased usage in home entertainment distribution,” said Michael Pachter, media analyst with Wedbush Securities.

While no studio is going to admit it might profit from home-confined consumers, Wall Street analysts are less concerned about optics and more motivated by trends and cost/benefit analysis, among other factors.

Pachter cautions that any uptick in transactional purchases, Redbox rentals and subscription streaming is limited in its “attractiveness” as investments. Indeed, after Universal and Warner, no other studio has announced expediting retail channels. Box office king Disney has heretofore resisted altering the theatrical window for obvious reasons.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“There are other things going on out there that limit their attractiveness as investments,” Pachter said.

Home entertainment spending in the fourth quarter of 2019 increased 9% to $6.8 billion, from $6.3 billion spent in the final three months of 2018, according to DEG: The Digital Entertainment Group.

The analyst contends any increased revenue studios make from DVD will be “far less” than the “normal” revenue they would generate from theatrical exhibition. A noted Netflix bear, Pachter says the SVOD behemoth remains an overvalued stock, “but less so now due.” He says Disney will benefit from releasing its movies on Disney+, but will still “lose mightily” on theme parks and cruise ships — both of which are shut down.

“Redbox definitely benefits, but it’s a private company,” Pachter said. The kiosk vendor and its former corporate parent, Outerwall, were acquired by a private equity group in 2016 for $1.6 billion.

Richard Greenfield, media analyst with Lightshed Partners, said the elimination of live sports on TV makes SVOD a valuable alternative.

“To the extent consumers are increasingly working from home and refraining from out-of-home activities, without sports to watch on TV, we suspect streaming services such as Netflix will see increased subscriber additions and higher utilization per account (leading to higher ARPU plans that enable more users per household and lower churn),” Greenfield wrote in a March 12 note.

Analyst Laura Martin with Needham was one of the first Wall Street pundits to predict a home entertainment gold rush as a result of the pandemic. Martin cautions that with the pandemic now centering in Europe, international  Netflix subscriber growth will stall.

“In distressed times, people will give up their Netflix subscriptions,” Martin wrote in a note.

Greenfield disagrees.

“Netflix appears incredibly well-positioned to entertain consumers as [other] entertainment options dry up, especially if more movie theaters close globally,” he wrote.

 

Universal Releasing Theatrical, Home Entertainment Releases Simultaneously

Seeking to counter the coronavirus spread and delayed theatrical release schedules, Universal Pictures March 16 announced it would release its current theatrical slate into home entertainment distribution channels simultaneously.

The sudden move in one stroke eliminated the traditional 90-day theatrical window — an exclusivity exhibitors have fought hard for ever since home entertainment emerged. But last weekend’s domestic box office was the lowest in 20 years, prompting the studio to act.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Movies include The Invisible Man, The Hunt and Emma, among others. Universal’s DreamWorks Animation Trolls sequel, Trolls World Tour, will now hit theatrical and home entertainment channels April 10. Titles will be available on assorted digital channels for a 48-hour rental period at $19.99 each.

“Rather than delaying these films or releasing them into a challenged distribution landscape, we wanted to provide an option for people to view these titles in the home that is both accessible and affordable,” NBCUniversal CEO Jeff Shell said in a statement. “We hope and believe that people will still go to the movies in theaters where available, but we understand that for people in different areas of the world that is increasingly becoming less possible.”

Follow us on Instagram

Movie theaters have now been closed in more than 30 markets around the world, while in the United States, the AMC Theatres chain announced it would limit movie attendance to 50 in an attempt to adhere to “social distancing” guidelines. Earlier, AMC had said it would cut capacity in its theaters by half.

In New York City and Los Angeles, mayors have ordered all movies theaters to be closed.

In its latest guidelines, issued March 15, the Centers for Disease Control and Prevention (CDC) recommends that for the next eight weeks, organizers cancel or postpone in-person events that consist of 50 people or more throughout the United States.