Will Smith, Director Marc Forster Acquire German Home Entertainment Distributor

Will Smith (Bad Boys, The Pursuit of Happyness, Ali, Men In Black, I am Legend) has joined with director Marc Forster (Monster’s Ball, Quantum of Solace, World War Z, and Walt Disney Pictures’ upcoming Christopher Robin) to acquire Telepool GmbH, a German licensing and distributor.

Telepool was acquired from the company’s former public-broadcasting shareholders Bayerischer Rundfunk, Mitteldeutscher Rundfunk, SWR Media Services GmbH (a subsidiary of Südwestrundfunk) and Telvetia S.A. (a subsidiary of SRF). Financial details of the deal were not disclosed.

As part of the sale, Telepool will become a development, financing and distribution partner for film projects of Will Smith and Marc Forster. The acquisition was made by The Smith Family Circle, Will and Jada Smith’s Family Office, and Elysian Fields, a group of investors associated with Marc Forster.

Telepool’s core business is the acquisition, sale and promotion of theatrical, DVD, TV, VOD and gaming content, as well as merchandising and licensing of publishing for German-speaking territories (GSA). Additionally, the group acts as a world sales company for theatrical and TV content. The Telepool group has offices in Munich, Zürich, Leipzig and Los Angeles.

“Marc and I took a close look at Telepool and discovered a company that has an incredible reputation and a lot of potential,” Smith said in a statement. “We look forward to working together and with the Telepool team to create unique opportunities and content to strategically growing the business.”

As a part of the deal, Smithand his long-time business partner James Lassiter will have the option to develop and distribute film and television projects through Telepool. Lassiter’s Overbrook Entertainment remains its own independent production entity producing and developing film and television content.

Similarly, Forster and Renee Wolfe’s independent production entity 2dux² will also have the option to develop and distribute film and television projects through Telepool while also remaining fully independent.

“As a German-born Swiss national, I was familiar with Telepool long before completing this acquisition with Will and his family,” said Forster. “We believe that Telepool is well positioned for continued success and growth in our rapidly changing media landscape.”

“The new shareholders are very much committed to continuing our business model, added André Druskeit, who assumed the CEO position on June 1. He said all management positions at subsidiary companies would remain unchanged for the time being.

“The setup is great, and we are looking forward to many exciting projects with Will, Marc and all our business partners,” Druskeit said.


Trend’s Tricky Retail Slope

NEWS ANALYSIS — GameStop, along with other entertainment retailers, is attempting to sustain its national retail footprint in part by selling popular culture items such as action figures, posters, T-shirts and other collectibles.

It’s a business strategy fraught with risk and reward.

GameStop’s collectibles business increased 24.4% to $142.4 million in its most-recent fiscal period, driven by continued expansion of licensed merchandise offerings and unique product offerings.

Trans World Entertainment Corp.’s f.y.e. chain reported a 3% increase “lifestyle” sales, which partially offset a 17% decline in video, music and video games.  The lifestyle category represented 49.5% of revenue for the quarter, up from 42% a year ago.

“We are focused on efforts to differentiate our entertainment merchandise towards creating a unique specialty retailing experience of choice for families and fans of pop culture,” CEO Mike Feurer said on the company’s May 29 fiscal call.

Feurer said the changing merchandise point-of-view at f.y.e. is based in part on reinforcing the chain’s credibility with customers, while enabling it to better connect “personally with welcomed frequency.”

Maybe, but retail chains Hastings Entertainment and MovieStop tried similar approaches focusing on trend merchandise and failed.

Acquired in 2014 by the company that runs Elvis Presley’s Graceland estate, as well as Prince’s pending Paisely Park in Minneapolis, Hastings and MovieStop turned their focus away from home video to consumables, trend, comics, electronics, hobbies and books. Hastings said it generated $100 million annually in book sales.

“We are hopeful that we are on the right path,” Jim Litwak, president of the combined companies, said at the time.

He wasn’t on the right path. Both chains halted operations in 2016, shuttering a combined 162 stores nationwide.

But Michael Pachter, media analyst with Wedbush Securites in Los Angeles, contends GameStop can succeed with trend.

“The real difference is that the core customer for GameStop is an almost perfect overlap with the core memorabilia collector,” said Pachter. “The foot traffic provides a cross-selling opportunity.”

The analyst cautioned the trend category is significant for GameStop but not a gamechanger. He said collectibles generated 7% of total sales in 2017, with 9% projected for this year.

“That seems sustainable,” Pachter said.

Trans World Entertainment Ups Q1 Loss

Trans World Entertainment Corp. May 29 reported a first-quarter (ended May 5) loss of $8.1 million, which was 56% higher than the $5.2 million loss reported in the previous-year period. Revenue dropped nearly 5% to $96.6 million.

The company cited much of the loss on continued challenges in its f.y.e. (For Your Entertainment) mall-based home entertainment retail chain.

Revenue at one of the country’s last entertainment retail chains dropped nearly 17% to $54 million from $65 million during the previous period.

Comparable f.y.e. store sales declined 8.5%, as a comp increase of 2.8% in lifestyle and electronics categories was offset by a 16.8% decline in video, music and video games.  The lifestyle and electronics categories represented 49.5% of revenue for the first quarter as compared to 42.6% in the same period last year.

The chain recorded an operating loss of $5.4 million, compared to an operating loss of $4.4 million for same period last year.

f.y.e. operated 253 stores – mostly mall-based – in the period compared to 273 stores last year. With malls under siege from e-commerce, f.y.e. faces a duel threat from changing consumer consumption of video entertainment and shopping habits.

“Although in the midst of continued structural and external challenges [at f.y.e.], we are focused on efforts to differentiate our entertainment merchandise towards creating a unique specialty retailing experience of choice for families and fans of popular culture and fun,” CEO Mike Feurer said in a statement.

Indeed, Feurer preferred to highlight the company’s overall fiscal health, in addition to etailz.com, the company’s ecommerce subsidiary selling merchandise on Amazon. Revenue increased 15% to $42.5 million, while operating loss increased to $2.8 million from $821,000 last year.

“As we work through the assortment changes needed to stabilize the f.y.e. business, we have maintained focus on the balance sheet, ending the quarter with $15 million and no debt,” Feurer said.




Lionsgate Fiscal 2018 Home Entertainment Revenue Up $67 Million

Spurred by packaged media and digital revenue from Oscar-winner La La Land, Power Rangers, Tyler Perry’s Boo 2! A Madea Halloween, and Wonder, Lionsgate reported a $67 million increase in home entertainment revenue for the 2018 fiscal year, ended March 31.

Revenue rose 9.5% to $774 million, which included $400 million from DVD and Blu-ray Disc, compared with revenue of $707 million ($404 million) during the previous-year period.

In fiscal 2018, Lionsgate shipped about 65 million DVD/Blu-ray units.

Digital media, which includes electronic sellthrough, transactional VOD and pay-per-view, generated $374 million in the period, compared to $304 million in the prior fiscal year.

Indeed, Lionsgate motion picture segment generated 42.5% of its fiscal year revenue from home entertainment; 25.1% from international; 15.4% from theatrical; 15.3% from TV and 1.7% from other sources.

The studio/distributor said four of its theatrical releases debuted No.1 on weekly DVD/Blu-ray sales charts. La La Land and Power Rangers held the top spot for two consecutive weeks, while Tyler Perry’s Boo 2! A Madea Halloweenand Wonder held onto the No. 1 spot for one week.

Lionsgate had an approximate 11% market share for home entertainment, making it the No. 5 studio in market share overall.

In calendar 2017, Lionsgate said it maintained a box office-to-home entertainment conversion rate of 18% above the industry average, leading all major studios.

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


WWE Ups OTT Video Subs 5%, Stops Reporting Disc Sales

World Wrestling Entertainment May 3 reported a 5% increase in first-quarter (ended March 31) WWE Network subscriptions to 1.56 million. The over-the-top video service had 1.48 million during the previous-year period.

The professional wrestling media company no longer reports WWE home entertainment results, having folded disc sales into its media division, which includes legacy pay-per-view events and flagship TV programs “Raw,” and “Smackdown.”

Media revenue increased 10% to $133.4 million from $121.2 million during the previous-year period. Operating income jumped 74% to $43.6 million from $25.1 million last year.

Live event operating income decreased 22% to $2.7 million on revenue of $30.8 million. Consumer products income fell 59% to $6 million on revenue of $23.5 million.

The fiscal reporting switch is understandable considering WWE home entertainment posted Q4 operating loss of $700,000 on revenue of just $900,000, compared to operating income of $1.9 million and revenue of $4.2 million during the previous-year period. It was the unit’s first fiscal loss.





Home Entertainment Seeks VR Lifeline – at the Mall?

Apparently alternate reality has come to the home entertainment industry.

Stephanie Prange’s insightful report from the recent DEG event about Virtual Reality (VR), Alternate Reality (AR) and Mixed Reality (MR) infusing new hope for home entertainment studios underscores the fact that this alphabet soup of hype is definitely not reality.

Industry experts contend that VR – a technology that has always been (and will always be) a component of video games – will now transform into a mall-based attraction, or new acronym: LBE (location-based-entertainment).

“Our hope is certainly that the LBE market will not only be a business in and of itself but also encourage and support the home market,” said Jessica Schell, EVP and GM, Warner Bros. Home Entertainment.

That’s a stretch. Malls are dying in America. Amazon, ecommerce and the Internet is rapidly making the demise of this consumer option an increasing reality.

Greg Maloney, retail CEO at real-estate firm Jones Lang LaSalle , which manages malls nationwide, told The Wall Street Journal shoppers in the rural Midwest are changing their habits faster than others in the U.S.

At its peak, there were 1,500 major malls in the U.S. There are currently about 1,000 left, with about 300 expected to close over the next five years. And that’s being generous.

“When you get into rural America, you’re looking at 35 to 40 minutes of driving” to get to the mall, Maloney said.

Apart from a weekly trip to Sam’s Club or Costco, shoppers in the Midwest do as much shopping as possible online, according to The Journal.

Howard Davidowitz, with investment banking firm Davidowitz & Associates, told CNN Money that when anchor stores – Sears, Macy’s, etc., close, it causes more than headaches for mall owners and other retailers.

“I’d say this problem is only in its second inning,” Davidowitz said.

F.Y.E, one of the last standing home entertainment retail chains, which is mall-based, attributes morbid home entertainment sales to declining mall foot traffic.

But let’s forget logistics and stick to other realities undermining wider consumer adoption of VR, AR and MR. Most consumers aren’t select teenagers willing to embrace vertigo for their next home entertainment experience.

Remember 3D Blu-ray? It’s dead. And it wasn’t cost or competing 3D eyewear that killed the concept. It was the fact most people couldn’t wear 3D glasses long enough to watch a trailer, let alone the movie.

Try watching World War Z in 3D. I did. Wanted to jump off that building with Brad Pitt. And I wasn’t even bitten by a zombie. Just wearing 3D glasses. Turns out, 3D was the same hyped gimmick that came and fizzled in the 1950s.

Despite endless VR goggle/smartphone marketing over the winter holidays, a recent Nielsen study found that 53% of respondents were “just not interested” in the concept, while 43% said it was “too expensive” and 14% worried about “motion sickness.”

Augmented reality has many applications that can work for consumers and retail. Even better, it doesn’t require special glasses, just an app and smartphone can enable a user to see what a home improvement to a bathroom or kitchen could look like.

Watch any home improvement TV show, it’s riddled with AR transforming neighborhood busts into must-have homes before a shedding a single ounce of sweat equity.

Mike Dunn, DEG chair and president, product strategy and consumer business development, 20th Century Fox, perhaps summed it up best.

“The challenge from my perspective is not the technology, but how you apply that technology,” he said. Dunn used to be president of Fox Home Entertainment.





Redefining Home Entertainment – Welcome to Media Play News!

Welcome to Media Play News, dedicated to informing, educating, and entertaining everyone involved in the business of bringing entertainment home.

We have launched a new responsive website filled with the latest news, research and analysis, reviews, and blogs essential for your business.

We are unveiling a new daily e-newsletter and breaking news alerts to keep you in the loop with the latest home entertainment news.

Later this month, we will debut a new monthly magazine that will be available in both print and digital editions, a carefully curated collection content culled from our website and 24/7 industry coverage.

And we are beginning the new year with an invigorated social media push, augmenting our Facebook and Twitter pages with Instagram and, soon, a new YouTube channel focused on bringing our content to the masses.

Our team has had a good run as Home Media Magazine under Questex LLC, and as Video Store Magazine under Advanstar before that.

And now, as we begin our third chapter, as Media Play News, I sincerely hope I can count on your continued support as we embark on this ambitious and exciting new venture.

We believe our industry both needs and deserves an independent trade publication – perhaps now more than ever – to cover our business from an insider’s perspective, with a focus on what’s important to you.

We reach a broad audience of retailers, both digital and physical, as well as a growing group of analysts, entertainment and technology reporters, and other consumer influencers.

We are your voice, your representative – and we will continue to champion and advocate for our industry in our blogs and columns while providing the world with first-class coverage of the home entertainment industry and its ongoing evolution.

I’d like to make it clear that we are not just reinventing ourselves. We intend to redefine the very concept of home entertainment. Initially, home entertainment was renting movies on videocassette. Then it became the sale or rental of discs, first DVD and then Blu-ray Disc.

Today, home entertainment is a multi-faceted industry that ranges from disc to digital distribution, from Redbox to Roku, from iTunes to Netflix. And with the promise of premium VOD, the home entertainment business – with its guiding principle of bringing entertainment home – stands to play an increasingly greater and more significant role in the overall entertainment business.

Bringing entertainment home. That’s what you’re all about – and that, too, is what we are all about.