Warner’s ‘Elf’ Climbs Atop Official U.K. Film Chart

Warner Bros. Home Entertainment’s Elf climbed to No. 1 on the U.K. home entertainment Official Film Chart through Dec. 2. The 2003 movie starring Will Ferrell finished atop the weekly chart for the first time since the chart’s inception in 2018.

Disney’s live action remake of Mulan dropped to No. 2 after two weeks on the top rung. Last Christmas (Universal) held on at No. 3 as The Greatest Showman (20th Century) climbed seven spots to No. 4. Star Wars: The Rise of Skywalker (Lucasfilm) soared 10 spots to No. 5 following the release of a new 4K UHD Blu-ray Disc Steelbook edition.

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This week’s highest new entry was psychological thriller Unhinged (No. 6), starring Russell Crowe and Caren Pistorious. Entertainment One’s 1917 moved down one spot to No. 7, as did Jim Carrey in The Grinch at No. 8. Universal’s Trolls World Tour climbed seven spots to No. 9. Finally, Kristen Stewart and Mackenzie Davis’ new festive rom-com, Happiest Season debuted at No. 10 on digital downloads only.

The Official Film Chart Top 10 – Dec. 2, 2020

Rank Last Week Title Studio
1 2 Elf Warner
2 1 Mulan Disney
3 3 Last Christmas Universal
4 11 The Greatest Showman 20th Century
5 15 Star Wars – The Rise of Skywalker Disney
6 New Unhinged Altitude Spirit
7 6 1917 eOne
8 7 The Grinch Universal
9 16 Trolls World Tour DreamWorks Animation
10 New Happiest Season eOne

© Official Charts Company 2020

Home Entertainment Library, PVOD Help Sustain Lionsgate Q2 Revenue in Pandemic Year

With scant theatrical distribution due to the pandemic, Lionsgate leaned on home entertainment library and premium VOD to sustain fiscal operations through the fiscal second quarter (ended Sept. 30).

Total home entertainment revenue from disc and digital topped $150 million, which was down 16% from revenue of $178.5 million in the previous-year period. Through six months of the fiscal year, home entertainment revenue was flat at $317.4 million.

Packaged media, third-party licensing and transactional digital distribution of movies and television library content revenue topped $166.7 million, as library revenue for the trailing 12 months grew to a record $738.5 million, 33% higher than the previous trailing 12-month period. Motion picture segment profit grew 63% to $83 million, from $51 million, on strong demand for library content and lower distribution and marketing costs due to the lack of theatrical commitments.

Top PVOD releases in 2020 include period horror drama Antebellum and faith-based I Still Believe.

Television production segment revenue declined to $197.2 million, compared with $274 million in the prior year quarter, and segment profit was $9.9 million, compared with $12.6 million in the prior year quarter, primarily due to the timing of production schedules and episodic deliveries.

Meanwhile, the Starz subsidiary reported its best domestic OTT subscriber growth quarter ever, as OTT subscribers in the U.S. increased to 9.2 million, up from 7.4 million in the prior sequential quarter. Lionsgate’s global OTT subscribers (including StarzPlay Arabia, a non-consolidated equity method investee, and Pantaya) increased by 2.3 million in the quarter to 13.7 million.

“Together with the resumption of film and television production and another great revenue performance from our library, it added up to a quarter that reflected strong financial results, acceleration of our key non-financial metrics, and affirmation of the business plan we created four years ago with the acquisition of Starz and our pivot to the streaming world,” CEO Jon Feltheimer said in a statement.

Sony Pictures Combining Home Entertainment, TV, Theatrical Marketing; Wong Gets New Key Role

Sony Pictures Entertainment is combining marketing teams between theatrical, television and home entertainment distribution, with veteran home entertainment executive Lexine Wong assuming a new key role.

The reorganization, which precedes Sony’s fiscal results on Oct. 28, is expected to reduce staff by about 35 personnel. The studio cited the ongoing coronavirus pandemic in part for the changes, including the fact Sony is holding off releasing most major movies until 2021.

Under the management reshuffle, Keith Le Goy,  president of networks and distribution, and Josh Greenstein, president of the motion picture group, will jointly oversee studio marketing. Andre Caraco, co-president of global marketing, is exiting after 30 years at Sony.

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Wong, previously senior EVP of worldwide marketing for Sony Pictures Home Entertainment, becomes head of global multichannel distribution marketing. She is one of three executives managing Sony’s new U.S. marketing group, along with Paul Noble and Danielle Misher, co-heads of global theatrical marketing. All three report into Greenstein and Le Goy.

Josh Greenstein and Keith Le Goy

Additional flow chart changes have Jason Spivak, EVP of distribution for North America television and home entertainment; Flory Bramnick, EVP of distribution for North America television and ad sales; Adrian Smith, president, domestic distribution for theatrical; Paul Littmann, EVP of distribution for global; Jamie Stevens, EVP of worldwide consumer products; and Jeffrey Godsick, EVP of brand strategy and global partnerships, all reporting to Le Goy and Greenstein.

Because of the coronavirus-induced closure of movie theaters, Sony Pictures has pushed most of its big movies into 2021, including Peter Rabbit 2: The Runaway and Venom: Let There Be Carnage. The studio’s next big wide release is Monster Hunter, scheduled to open in theaters on Dec. 30.

 

Warner Bros. Q3 Home Entertainment/Video Game Revenue Down YTY

With few movie releases due the coronavirus pandemic production shutdowns, and the video game industry awaiting launches of new-generation consoles, Warner Bros. Oct. 22 reported third-quarter (ended Sept. 30) operating revenue of $383 million for its games, home entertainment and ancillary content segment. That was down 23% from revenue of $497 million during the previous-year period.

The studio’s top-selling packaged-media release in 2020 continues to be Oscar-winning Joker.

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Theatrical revenue declined more than 22% to $1.06 billion, from $1.37 billion in the same period a year ago. TV production revenue fell almost 35% to $960 million, from $1.46 billion. When combined with games and home entertainment, studio revenue dropped 27.7% to $2.41 billion, from $3.33 billion a year ago.

If there were a silver lining to the results, film and TV production costs in the quarter dropped 27.4% to $1.17 billion, from $1.61 billion during the previous-year period.

‘Scoob!’ Remains Atop U.K. Home Entertainment Sales Chart

Warner Bros.’ Scoob! scored a fourth straight week at No. 1 on the weekly Official Film Chart (through Oct. 14) in the United Kingdom, fending off competition from Disney’s Onward.

With just 500 unit sales separating the top two during the week, Scoob! narrowly denied Onward — which climbed five places to No. 2 — a chance atop the podium. This is the fourth time Onward has reached its peak of runner-up since its retail release in May.

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Disney’s Frozen II rebounded 27 places to No. 3, the first of several big climbers this week. Based on the autobiography of Henri Charrière, prison escape drama remake Papillon (Signature Entertainment), starring Charlie Hunnam and Academy Award winner Rami Malek, leaped 19 places to land at No. 4.

Universal Pictures’ animated record-breaker Trolls World Tour dropped three spots to No. 5, to land just ahead of 2018’s best-selling film The Greatest Showman (20th Century Studios) — which sang and danced up 14 places to No. 6. Paramount Pictures’ Sonic the Hedgehog rose two places to No. 7.

Universal Pictures’ Yesterday returned to the top 10 after climbing eight places to No. 8,and Sony Pictures’ Spider-Man: Far From Home landed at No. 9. Finally, Bad Boys for Life (Sony Pictures) rounded off the top 10 after tumbling six spots from last week.

The Official Film Chart Top 10 Oct. 14, 2020

LW Pos Title Label
1 1 Scoob! Warner
7 2 Onward Disney
30 3 Frozen II
Disney
25 4 Papillon Signature Entertainment
2 5 Trolls World Tour DreamWorks Animation
20 6 The Greatest Showman 20th Century Studios
9 7 Sonic the Hedgehog Paramount
16 8 Yesterday Universal
10 9 Spider-Man: Far From Home Sony
4 10 Bad Boys for Life Sony

 

Warner’s ‘Scoob!’ Tops U.K. Weekly Home Entertainment Chart

Warner Bros.’ Scoob! nabbed the top spot on the weekly U.K. Official Film Chart through Sept. 23, knocking off perennial leader Trolls World Tour (Universal Pictures Home Entertainment).

Disney’s Star Wars: The Rise of Skywalker held the third spot ahead of eOne’s Oscar winner 1917, with Sony Pictures Home Entertainment’s Little Women in fifth. The studio continues to score with Spider-Man: Far From Home (No. 6) and Bad Boys For Life (No. 7), ahead of Warner’s A Star Is Born in eighth.

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Paramount Home Entertainment’s Sonic the Hedgehog ended in ninth, while Sony Pictures’ Jumanji: The Next Level rounded out the Top 10.

The Official Film Chart Top 10 – 23rd September 2020

LW Pos Title Label
NEW 1 SCOOB! WARNER BROS.
1 2 TROLLS WORLD TOUR DREAMWORKS ANIMATION
3 3 STAR WARS: THE RISE OF SKYWALKER WALT DISNEY
5 4 1917 ENTERTAINMENT ONE
10 5 LITTLE WOMEN (2019) SONY PICTURES
6 6 SPIDER-MAN: FAR FROM HOME SONY PICTURES
7 7 BAD BOYS FOR LIFE SONY PICTURES
19 8 A STAR IS BORN WARNER BROS.
8 9 SONIC THE HEDGEHOG PARAMOUNT
9 10 JUMANJI: THE NEXT LEVEL SONY PICTURES

Deloitte: Consolidation, Niche Content Key to Surviving Industry Transformation

In the rapidly evolving over-the-top video ecosystem, traditional media distribution has been turned on its ear as pay-TV, linear broadcast and packaged media are being supplanted by technology companies entering the media and entertainment space — many with original content.

From subscription streaming video-on-demand pioneers Netflix and Roku to e-commerce behemoth Amazon, consumer tech giant Apple and social media stalwart Google/YouTube, tech companies have forced traditional media companies and studios to reconsider their business models to survive.

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And in the midst of COVID-19, recovery from the pandemic disruption will likely dominate operational strategy in the near term, even as companies consider how to address the broader and longer-term transformations in media and entertainment.

New data from consulting giant Deloitte suggests mergers and acquisitions, in addition to content differentiation are keys to surviving media distribution in the coronavirus era.

Since 2014, more than $700 billion in strategic M&A deals occurred across media and entertainment sectors, highlighted by Disney’s acquisition of 21st Century Fox’s entertainment assets and AT&T’s acquisition of Time Warner, including Warner Bros., HBO and Turner assets. Just as unprecedented change has forced companies to consider transactions — such as merging with a rival — that would have been unthinkable years before, Deloitte contends ongoing disruption may cause companies look to invest in areas previously ignored or out of their comfort zone.

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Globally, M&A activity in the broader telecom, media, and entertainment sector fell by 17% in the first half of 2020 compared to a year earlier, while value is 47% down. In the United States, the sector has been far more resilient, with volume down only 4%. But the 45% decline in deal value suggests that companies are looking at small and midsized deals following the megamergers, albeit with continued pandemic-related uncertainty also hampering valuations. Although the economic outlook will loom large, M&A deal pricing is likely to be influenced by demand for and supply of independent targets.

Differentiated Content is King

At the heart of media consolidation is access and control of content. With the arrival of more streaming services, and the heightened competition for talent and content, costs are skyrocketing. Since 2010, the number of scripted TV shows on domestic networks has more than doubled. And streaming services are now paying up to $20 million per hourlong episode— several times the cost of just a few years ago, according to the report.

With Netflix raising the bar on original content spend almost beyond the reach of most competitors, Deloitte suggests media companies differentiate by targeting niche audiences within their platforms. In Deloitte’s 2019 Digital media trends survey, 40% of paid streaming video users said they subscribed primarily to access original content. And this was up to as high as 57% for millennial consumers.

The report says media companies should focus on excelling in one or more of the following differentiators to remain ahead of the competition:

  • Providing differentiated content and programming, either at scale or through dominating a niche;
  • Controlling direct access to consumers through owned distribution channels, including direct-to-consumer(DTC)/over-the-top (OTT) alternatives, either at scale or through owning access to a valuable consumer segment;
  • Owning the capabilities required to capitalize on increased data and using it to boost profitability, optimizing proprietary data to develop better insights.

 

Acorn TV generated more than 1 million subscribers (paying $6 per month) while maintaining high customer retention rates based on offering mainly British TV murder mysteries, even as more diverse and more capitalized platforms struggle to achieve half of that subscriber count. AMC Networks acquired Acorn’s parent RLJ Entertainment for $100 million in 2018.

Disney’s streaming-driven acquisition of Fox, including the rights to the X-Men, Avatar, The Simpsons, FX Networks and National Geographic — was a key step to accumulating premium content and expanding its digital presence through Disney+, ESPN+ and Hulu.

“A paucity of conventional targets may force companies to think more laterally about how to attain differentiated content,” read the report.

Indeed, news media businesses now view their back catalog of content as monetizable source material for video content, including TV series, documentaries, and even feature films. Similarly, companies have developed podcast programs into premium video content.

“These nontraditional sources of original content could provide targets for M&A in the coming months and years,” Deloitte wrote.

Target Reports Record Q2 Store Sales Across All Merchandise Categories, Including Entertainment

Target Corp. Aug. 19 reported record second-quarter (ended Aug. 1) sales, up 24.3% to $22.9 billion from $18.4 billion during the previous-year period. Net income ballooned 80% to $1.7 billion from $938 million last year.

The Minneapolis-based retailer attributed the fiscal rise to continuation of heightened sales volume and significant household investments in response to the COVID-19 pandemic.

Target, along with Walmart and Best Buy, is one of the largest sellers of packaged media, including DVD, Blu-ray Disc and 4K UHD Blu-ray. While online sales grew 195% in the quarter, in-store sales drove nearly 90% of the company’s quarterly revenue.

“Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9% and stores enabling more than three-quarters of Target’s digital sales,” CEO Brian Cornell said in a statement. “We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year. We are well-equipped to navigate the ongoing challenges of the pandemic, and continue to grow profitably in the years ahead.”

Target operates nearly 1,900 stores nationwide, in addition to Target.com.

Home Entertainment Booming Down Under During Pandemic

Add Australia to countries that have driven home entertainment revenue during the COVID-19 pandemic, according to new data from emerging technology analyst firm Telsyte. Aussies added 5.6 million new subscriptions to the end of June, an increase of 18% from a year ago. This growth was across streaming video on demand (SVOD), streaming music and games related subscription services.

The total number of subscriptions reached almost 37 million and is forecast to grow to 58 million by 2024.

The Telsyte Australian Entertainment Subscriptions Study 2020 found SVOD and streaming music remained the top two largest categories with 16 million and 12 million subscriptions respectively.

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Video Entertainment Tops Consumer Demand 

COVID-19 sent the Australian SVOD services market to new heights as Australians spent more time at home, with over half (52%) of SVOD users believing their services have become “essential” since the pandemic. The total number of subscriptions reached around 16.3 million at the end of June 2020, a year-on-year increase of 32% from 12.3 million in June 2019.

Telsyte research shows Netflix (5.4 million) and Stan (2.1 million) remained the top two SVOD service providers at the end of June. Amazon Prime Video and Disney+ (launched in Nov 2019) both emerged strongly with 1.7 and 1.1 million subscriptions, respectively.

Use of Amazon Prime Video benefited from the strong uptake of Prime subscriptions (Telsyte measures a subset of Prime users based on those that use the Prime Video option), as demand for online shopping and delivery has also soared.

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Demand for Live Sports

With Australians, like other countries, unable to attend their favorite sporting matches during the pandemic, the pandemic has only made Aussies’ appetite for sports content even stronger, with a surge in adoption towards the end of June when many sporting codes resumed.

“Despite a hiccup during the shutdown period, sports video subscriptions are set to continue to grow strongly as fans turn to apps instead attending stadiums,” managing director Foad Fadaghi said in a statement.

Telsyte estimates the total sports SVOD category grew by 11% to 4.9 million subs at the end of June. Telstra Sports Live Passes, Optus Sport and Kayo Sports made up around 95% of total sports SVOD subscriptions.

Slowed Content Production

Disruptions to content production during the pandemic will likely present an issue for services going into the second half of 2020, with research showing consumers are recognizing new program additions are in decline.  More than one in three SVOD users feel there is less new content being added to their services since the pandemic.

However, rather than impacting negatively on the market, in the short term Telsyte believes this has driven consumers to consider subscribing to multiple services to address content shortfalls, rather than turning off services.

“Australians continue to show a strong willingness to subscribe to multiple services,” Fadaghi said.

Telsyte research shows that nearly half (47%) of households that subscribe to SVOD services have more than one service, an increase from 41% in June 2019.

The market is well positioned to accommodate multiple providers, as more platforms such as Fetch TV, Apple TV and Foxtel are shaping to be more inclusive, allowing easy subscriptions to multiple services and single billing through the one platform. The study found 36% of Australians are interested in using simplified, one-stop access to multiple services.

Free video demand solid as Pay-TV subsides

SVOD services have not been the only winners during the past 12 months with free to air TV apps also growing viewership. Broadcasting Video on Demand services (BVOD), including 9Now, ABC iView, etc., have benefited as Aussies searched for more content during the lockdown, especially as a trusted news sources for information about the current health crisis.

The main BVOD platforms had upwards of 10 million Australians using their service during FY2020 and almost half of survey respondents claimed they are spending more time on BVOD due to COVID-19.

In contrast, the total pay-TV market (which includes residential cable, satellite and IPTV) was down 6% year on year to 2.6 million subscriptions at the end of June 2020. Foxtel’s pay-TV was the main source of the market decline due to increasing adoption of SVOD, which itself is now pivoting strongly towards with Foxtel Now, Kayo Sport and Binge.

Fetch TV with its mixed business model as both a set top box platform and an IPTV subscription service remained the growth engine for the pay-TV market alongside the uptake of broadband bundles.

Streaming Music Market Grows

The total number of streaming music subscriptions only increased 2% year-on-year to 12.2 million at the end of June 2020; however, over half are now paid subscriptions, compared to 42% at the end of June 2019.

The top three streaming music service providers in Australia remained Spotify, Google (including YouTube Music, YouTube Premium and Google Play Music) and Apple. Streaming music providers are increasingly focused on the podcast segment as growth has slowed.

According to Telsyte’s research, more than one in four Australians aged 16 and over listened to podcasts between January and June 2020, with comedy, health and news and politics related podcasts most popular.

Video Game Subscriptions Explode

Video games have been booming in popularity following the lockdown. About half of Australian households have a gaming console and 5 million people regularly purchase games (downloads and physical) making it a vibrant part of the entertainment market.

As well as dedicated consoles, Telsyte research shows that gamers overall were spending between 25 and 35% more time on games during the pandemic ranging on devices such as smartphones, tablets, computers and gaming consoles.

Australians had 5.8 million games related subscriptions at the end of June 2020, consisting of console subscriptions (e.g. PlayStation Plus, Xbox Live Gold), video game service subscriptions (e.g. EA Access, Xbox Game Pass and Apple Arcade), and Massively Multiplayer Online Game (MMOG) subscriptions (e.g. World of Warcraft).

The biggest growth was in video game service subscriptions which more than doubled to 2 million at the end of June 2020 (up from 0.9 million in June 2019). Telsyte forecasts this market is set to explode as several companies vie to be the ‘Netflix’ of games.

The study found a third of gamers are already aware of cloud gaming, where games are streamed from a remote server rather than stored locally on the users’ devices. This allows games to be played on devices with less computing power and the games also do not need to be downloaded and stored on the local device.

“Streaming gaming could be a game changer for the industry as it opens high end gaming to almost any device,” Fadaghi says.

Telsyte also found a growing interest in next-generation PlayStation 5 and Xbox Series X consoles as release dates get closer. Both will likely to help boost the games subscription market.

Telsyte estimates the total number of games related subscriptions could reach more than 17 million by June, enabled by fast broadband and 5G Internet connectivity, next generation game consoles and services that will appeal to casual players on smartphones and tablets.

Home Entertainment Giants Walmart, Target to Release Financial Results This Week

Following home entertainment studios’ strong quarterly fiscal results, top retailers Walmart and Target are set to release fiscal results this week that should underscore ongoing consumer demand for both physical and digital movies and TV shows.

Walmart, which reports fiscal results on Aug. 18, is the world’s biggest brick-and-mortar retailer and top seller of DVDs and Blu-ray Discs, with more than 5,000 outlets in the U.S. and more than 6,000 international stores.

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Long a packaged-media promotional juggernaut, on big releases Walmart will often do a gift set pairing a Blu-ray combo pack with a collectible such as a plush or keychain. The chain also offers exclusive bare-bones DVDs of Warner titles.

Target Corp., which reports results on Aug. 19, markets home video at more than 1,800 stores with point-of-purchase displays and significant shelf space. Like Walmart, Target has long been a big seller of DVDs and Blu-ray Discs. Disney in 2019 launched 25 branded sections within select Target stores, with 40 additional locations opening by this October.

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Target’s go-to marketing angle is the behind-the-scenes booklet add-on to packaged-media releases. For instance, for Onward, the latest Pixar release, Target offered a 4K Ultra HD Blu-ray with a gallery booklet and slipcover for $34.99.

Target has seen increased sales due to the coronavirus pandemic, reporting a 141% increase in e-commerce revenue for the first quarter (ended March 31) as consumers stocked up on lower-margin products online. CEO Brian Cornell said Target.com saw an increase of 5 million customers in the quarter, while more than 2 million used the drive-up service. The chain said more than 70 million people have downloaded the Target Circle app to access e-commerce.

Best Buy reports fiscal results on Aug. 25.