Viacom Asks CBS to Up Merger Bid

Media giant Viacom reportedly has asked CBS Corp. to increase its undisclosed merger bid by $2.8 billion. CBS previously offered an amount (reportedly $11.9 billion) below Viacom’s market capitalization value, according to CNBC, which cited sources familiar with the proceedings.

Viacom, which includes Paramount Pictures and Paramount Home Media Distribution, is majority owned by National Amusements – the corporate shell run by Sumner Redstone and his daughter Shari Redstone that controls Viacom and CBS.

Viacom spun off CBS in 2006 with Les Moonves assuming control of the publicly traded company.

With ongoing media consolidation industrywide, Shari Redstone seeks to consolidate the two companies, putting Moonves in charge. Redstone, however, wants Bob Bakish, current CEO of Viacom, to be president/COO of a combined Viacom/CBS, while Moonves prefers that position go to Joseph Ianiello, current COO at CBS.

Separately, CBS nominated Richard Parsons, the 70-year-old former CEO of Time Warner, to its board of directors. Parsons, who was replaced by Jeff Bewkes in 2008, was an earlier supporter of releasing movies digitally day-and-date with their packaged media debut – a move criticized at the time by video stores seeking exclusivity.

Parsons then enflamed the situation when, in a fiscal call, he said it would be a “cold day in hell” before leaving his Manhattan apartment to go to a video store. His comments came as Warner Home Video ranked #1 in domestic home video disc sales, with an industry-leading 20.2% market share.

 

Complete ‘Jackass’ Set Due May 29 from Paramount

Paramount Home Media Distribution will release the Jackass: Complete Movie and TV Collection on DVD May 29 (prebook April 17).

The 11-disc set includes all seven movies as well as the entire TV series.

In the ‘Jackass’ films and series, Johnny Knoxville, Bam Margera, Steve-O, Chris Pontius and Jason ‘Wee Man’ Acuña perform comedic stunts and pranks. The 16-hour collection includes: Jackass: The Movie, Jackass Number Two, Jackass 2.5, Jackass 3, Jackass 3.5, Jackass Presents Bad Grandpa, Jackass Presents Bad Grandpa .5 and the “Jackass” Classic Television Collection.

The set arrives just before the June 1 theatrical premiere of Action Point, also from the “Jackass” team.

Marcais Takes Marketing Position at Paramount

Vincent Marcais has been appointed EVP of worldwide marketing for Paramount Home Media Distribution. He will oversee the creative advertising, media, brand and market research for all of the studio’s home entertainment releases across physical and digital platforms and will report to Bob Buchi, president, worldwide home media distribution, Paramount Pictures.

“Vincent brings a wealth of knowledge and experience to our division, having worked with physical and digital retailers around the world to maximize title performance in the shifting home entertainment landscape,” Buchi said in a statement. “We look forward to his contributions as we continue to explore innovative marketing strategies to bring our products to the widest possible audience across all platforms.”

Marcais previously served as EVP of worldwide brand and customer marketing for 20th Century Fox Digital Home Media where he oversaw the release campaigns for all transactional businesses (video-on-demand, DVD, Blu-ray and Digital HD) and also managed joint consumer marketing efforts with digital retailers and U.S. and international operators.  During his tenure, Marcais was a key driver of the division’s transformation from a pure physical distribution company into a digital new media company.

Marcais began his career with French car manufacturer Citroën and joined Fox Video France in 1991 where he held numerous marketing and sales positions. From 2002 to 2006 he served as Fox’s VP of Marketing for the European home entertainment operation. He relocated to Los Angeles in 2006 to serve as SVP of international marketing for Fox and became EVP of worldwide brand and customer marketing in 2012.

Marcais effectively replaces Steve Siskind, who had been president, marketing, worldwide home media distribution for Paramount since September 2016. Siskind left Paramount last week. Before taking the home media marketing job, Siskind had been president of domestic theatrical marketing at Paramount for two years.

‘Downsizing’ at UltraViolet?

As studio home entertainment divisions trumpet the Disney-spawned and re-jiggered Movies Anywhere, Paramount Pictures and Lionsgate remain on the sidelines.

Paramount recently announced the digital (March 6) and 4K Ultra HD and Blu-ray Disc (March 20) street dates for the comedy Downsizing, starring Oscar-winners Matt Damon and director Alexander Payne.

Notable to the packaged-media release: cloud-based access via UltraViolet — not Movies Anywhere. UV users are directed to ParamountMovies.com to enter the redemption code for UV access, in addition to iTunes for Digital Copy.

Movies Anywhere touted nearly 80 million movies in user accounts earlier this year — about half the 165 million UltraViolet titles in 2015, according to DEG: The Digital Entertainment Group. The platform had more than 30 million registered accounts in July 2017.

There’s no doubt a unified Movies Anywhere platform with one-click access to cloud-based digital movie acquisitions is a good thing. UltraViolet attempted to meld physical media with the cloud — a strategy that required burdensome input.

It would be a shame if all that effort was lost in the cloud.

Viacom CEO: ‘Our Brands Coming to Mobile’ in the U.S.

Look for Viacom and its key brands – Paramount Pictures, MTV, Nickelodeon, Comedy Central and BET – to go increasingly mobile in the United States.

Speaking at the Morgan Stanley Technology, Media & Telecom confab in San Francisco, CEO Bob Bakish said recently announced moves partnering with Spain’s Telefónica making Viacom’s brands available on the telecom’s Movistar Play platform, underscored a need to “export” that strategy in the United States.

“We’re also in a very interesting conversation here in the U.S. right now about bringing our brands to mobile, and I believe that will happen in 2018,” Bakish said.

The executive said the year revolves around growing margins in established businesses, new distribution channels as well as improving synergies among internal brands through consumer products, live-events and incremental studio opportunities.

“We see a clear path toward top-line growth,” Bakish said, adding he expects Paramount growth to materialize in 2019.

The executive said Paramount is transforming from an underleveraged “fiscal mess” in 2016 that “ate over” $1 billion in cash, to a unit with a content library growing more than $300 million in value annually.

Half the studio’s release slate will be franchise sequels, with the remaining branded around Nickelodeon.

Viacom in January rolled of the Paramount Network (formerly Spike TV), an ad-supported service distributing original (“Waco” miniseries, starring Taylor Kitsch as cult leader David Koresh) and catalog content.

Future original series include, “Yellowstone,” starring Kevin Costner; “American Woman,” a single-camera comedy set in the 1970s amid the sexual revolution and the rise of feminism, starring Alicia Silverstone and Mena Suvari; and “Heathers” an hour-long pitch-black comedy anthology set in the present day, based on the 1988 cult classic film of the same name.

“[Paramount] is an iconic brand, known all around the world. It’s on a clear path to return to profitability,” Bakish said.

 

 

Viacom CEO: ‘The Cloverfield Paradox’ Sale to Netflix a ‘One-Off’ Deal

Following an underperforming legacy film slate, Paramount Pictures jumped at the chance to offload sci-fi drama The Cloverfield Paradox to Netflix, according to Viacom CEO Bob Bakish.

The subscription streaming video behemoth — which reportedly paid $50 million for the rights — promptly streamed the third installment in the franchise (following 10 Cloverfield Lane in 2016) globally at the conclusion of Super Bowl LII — after paying millions more for a TV commercial aired during the game. A first for a major Hollywood movie.

During the Feb. 8 fiscal call, Bakish described the arrangement —that bypassed theatrical distribution — as “bit of a one-off” deal.

“This was a unique situation that we thought was the right fit for the franchise,” Bakish told analysts. “It allowed us to take advantage of an attractive audience and really create some pretty compelling economics.”

With the domestic launch of the Paramount Network the lone positive for the studio (narrowing operating loss 28% was another) in Q1, the studio has its sights on upcoming tentpole releases Mission: Impossible — FalloutTop Gun: MaverickWorld War Z 2, branded films from Paramount Players (What Men Want, Dora the Explorer) and Paramount Animation (SpongeBob The Movie), and Sega’s Sonic the Hedgehog.

Cloverfield Paradox, which received poor reviews and was slated for April release, apparently didn’t make the cut.

“We’re going to continue to focus the vast majority of our releases on traditional theaters, and we see a great opportunity there to take share driven by our ’19 slate and beyond,” Bakish said. “But, given our production capabilities and the landscape, we’re going to continue to look broadly and creatively for opportunities to create additional value for Paramount.”

 

Disney’s Liz West Gets High-Level Marketing Communications Post at Paramount

Liz West is the new EVP of marketing communications for international theatrical marketing and worldwide home entertainment at Paramount Pictures.

West is a veteran entertainment executive who most recently served as VP of global publicity at the Walt Disney Co.

In her new role at Paramount, she reports to Mary Daily, who joined the studio last September as president of international theatrical marketing and worldwide home media entertainment. Daily previously spent nine years at Twentieth Century Fox Home Entertainment, most recently serving as president and chief marketing officer, worldwide marketing.

In a news release, Paramount says West fills a newly created role in which she will work closely with senior executive teams to drive key worldwide marketing initiatives, including digital and publicity campaigns for international territories.

“As our slate expands and our business grows we are looking to make sure we have a strategic, lifecycle approach to our movies and integrated consumer-facing communications across these areas,” Daily said. “Liz, who is a known strategist with the invaluable combination of both international theatrical and home entertainment experience, is the perfect executive to help lead these efforts.”

West starts at Paramount on Feb. 26.

Her tenure at Disney began in 2006, after eight years at Fox. While at Disney, West won acclaim for leading campaigns for such blockbusters as Star Wars: The Force Awakens, Beauty and the Beast, Guardians of the Galaxy Vol. 2, and  key Disney catalog re-releases, including the successful 3-D re-release in theaters of The Lion King.

West and Daily have worked together before, at Fox, where Daily was VP of Europe from 1995 to 2000. Daily later worked as president, international marketing at Universal Pictures and general manager, programme enterprises at MTV Networks International before returning to Fox in February 2008 as EVP, North America.

CBS Forms Viacom Merger Special Committee

CBS Feb. 1 announced that its board has established a special committee of independent directors to evaluate a potential merger with Viacom, which includes Paramount Pictures.

CBS said that despite forming a special committee there is no assurance that it would result in a transaction or on what terms any transaction might occur.

CBS and Viacom were previously legally together until 2006, when Sumner Redstone, founder and controlling shareholder of Viacom, declared that diversified media conglomerates were dinosaurs due to changing market conditions.

Fast-forward to the present and 94-year-old Redstone is still around – with an apparent polar opposite mindset.

His daughter, Shari Redstone, vice chairman of Viacom, is driving reconnecting with CBS, which is headed by Les Moonves. The rationale being that diversified consolidation is mandatory in an increasingly fragmented direct-to-consumer market.

CBS and Viacom are following M&A leads taken by AT&T and Time Warner, and Walt Disney and 20th Century Fox.

 

 

Home Entertainment’s Mantra in 2017 was ‘Just Keep Swimming’

At this year’s Video Hall of Fame ceremony in Beverly Hills in December, Janice Marinelli, president, Disney/ABC Home Entertainment & Television Distribution, for The Walt Disney Studios, drew solid applause when she advised her fellow home entertainment executives to “just keep swimming.”

The line, from the hit Disney film Finding Nemo, seemed to resonate with the several hundred execs in the room, many of whom have been contending with increasingly choppy seas for the better part of a decade.

In fact, 2017 marked the 10th anniversary of Netflix’s decision to transition its subscription approach from disc rentals by mail to digitally delivering content over the Internet – a truly disruptive moment that shattered the traditional home video model. Year after year, disc sales plummeted as consumers planted themselves on their sofas for a nightly steam of at first studio discards and then an increasingly compelling menu of original programming.

In the first nine months of this year, numbers provided by DEG: The Digital Entertainment Group show, more than 40% of the money consumers spent on home entertainment in the first nine months of 2017 was generated by Netflix and other subscription streaming services, up from 34% in 2016 and 29% in 2015.

Sales of Blu-ray Discs and DVDs, meanwhile, accounted for 24% of consumer home entertainment spending in the first nine months of 2017, down from 27% in the comparable period in 2016 and 31% in 2015.

In the first nine months of 2011, by contrast, streaming accounted for just 3.8% of the home entertainment business, with disc sales accounting for 46%, or $5.6 billion – compared to $3.26 billion in the first nine months of 2017.

“The [disc sales] business remains under pressure, due to the growing number of entertainment options,” says Eddie Cunningham, president of Universal Pictures Home Entertainment. “Nonetheless, studios and retailers continue to aggressively champion the category, looking to create the most compelling and meaningful opportunities to eventize our disc products and deliver the best, most exciting shopping experience possible.”

“Physical media continues to be an integral component of the product mix, but we need to find ways to remind consumers of the value of owning and renting discs,” adds Mark Fisher, president and CEO of the Entertainment Merchants Association (EMA).

Disney’s Marinelli says “physical consumption continues to be a vibrant, viable and top-performing line of business for us and it is also proving to be a very valuable resource in the transition to digital with e-copy redemption. This year the in-home division broke and set new records with four bestselling physical titles in the top 10 to date including tentpoles Star Wars: Rogue OneMoanaGuardians of the Galaxy Vol. 2 and Beauty and the Beast.  As viewing habits and consumer consumption rapidly evolve, we continue to evaluate our offerings on a regular basis and what will best meet the needs and demands of our customers.  This year we vigorously expanded into the 4K Ultra HD Blu-ray premium format beginning with inaugural title Guardians of the Galaxy Vol. 2, which quickly rose to the top of the industry’s 4K physical sales chart.”

Through it all, home entertainment executives have, well, just kept on swimming – and managed to keep their heads afloat through a steady string of technological advances and innovation. This year’s gold star goes to Movies Anywhere, the Walt Disney-owned digital movie service that allows consumers to buy newly released movies electronically (or redeem access codes packaged inside Blu-ray Discs) and watch them whenever they want to, on any screen, from the family room TV to their iPhone.

“Consumer centricity was without a doubt a defining characteristic of 2017, which was most notably addressed by the launch of the multi-studio digital locker Movies Anywhere,” said Disney’s Marinelli. “Movies Anywhere is a huge win for the consumer, providing them with more freedom, flexibility and utility and their digital library can now be viewed through a range of devices and digital retailers, anytime and anywhere. The strength of the studios and digital retailers that have come together at launch is unprecedented.”

Hollywood also claimed a seat at the burgeoning Ultra HD table with Ultra HD Blu-ray Disc, which experts agree is the optimum way to view 4K content , with even sharper pictures and more realistic colors than standard high-definition.

“We can expect to see the number of 4K UHD Blu-ray titles to expand considerably in 2018, as content companies  continue to release new and catalog titles in the premium format,” says Universal Pictures’ Eddie Cunningham. “As well, 4K movies, TVs and players are selling units in record numbers.  There is a clear groundswell around consumer demand and the industry is highly optimistic about the format’s future prospects.”

As Netflix and its OTT compadres continue to grab market share, studio executives – who still consider movie sales, either on disc or electronically, as their holy grail – also have had to contend with other challenges. Distribution channels have continued to proliferate, and the concept of content continues to evolve as millennials are as quick to spend an evening watching their favorite YouTuber or anime webisodes as they are the new Spider-Man movie.

“2017 really was the year of ‘more’ – more content, more provides, more devices, more technological enhancements, and more consumer choice,” said the EMA’s Mark Fisher. “Overall, this is a good thing, but it did lead to disruption of traditional business models. And we haven’t seen the end of it.”

Electronic sellthrough – also known as Digital HD – remains the most promising bulwark the studios have against continued double-digit OTT growth, but challenges remain. Consumers accustomed to spending around $10 a month for unlimited Netflix viewing might be reluctant to spend the same amount, or more, for a single piece of entertainment, even if they own it.

EST growth slowed from several years of double-digit gains to 7% in 2016, then rose slightly to 8% in the first nine months of this year. Executives hope Movies Anywhere will be the catalyst to reignite higher growth.

“On the EST front, we continue to see product, marketing and merchandising investments across the industry accelerate,” says Michael Bonner, EVP, Digital Distribution, for Universal Pictures Home Entertainment. “As a result, digital sell-through has been growing year over year and we continue to see increased consumer engagement in the category. Movies Anywhere is just the latest example of studios and distributors working together to provide more value to the consumer and setting a new bar for digital movie ownership.”

“Our focus is always on offering the best consumer experience possible, removing the barriers and offering a high-quality experience that adds value and utility to a digital movie collection,” adds Disney’s Marinelli. “Providing consumers with early digital access has been a successful way to drive consumers to the digital experience.  We continue to work closely with our digital retail partners to build a compelling in-home movie watching experience, including offering quality formats like 4K Ultra HD, as well as expanded and interactive extras – some of which are only offered digitally.”

Ultra HD Blu-ray Disc also is seen as a growth driver, particularly as the number of UHD TVs continues to mushroom.

“2017 was the year 4K UHD really took off,” said Jim Wuthrich, president, The Americas and Global Strategy, at Warner Bros. Home Entertainment. “With $200 million in global consumer sales, ample physical and digital distribution and accelerating penetration of capable TVs, content sales will continue to soar into 2018.”

“2017 was a year where we saw 4K HDR make huge strides towards becoming a mainstream part of the industry,” adds Jason Spivak, EVP, Worldwide Digital Distribution and North America Sales, for Sony Pictures Home Entertainment. “ 4K UHD physical discs are selling well, and we are seeing big advancements in 4K HDR digital services and devices.   The format is essential to our commitment to deliver the highest caliber consumer experience, and it is well on its way to mass acceptance.”

“ The number of 4K devices continues to grow, and is forecasted to triple in the next five years to nearly 350 million,” said Bob Buchi, president, Worldwide Home Media Distribution, for Paramount Pictures.  That clearly indicates that consumers have an appetite for the format, but we have to ensure that we don’t have a content gap.  At Paramount, we are committed to releasing the vast majority of new releases in 4K and have greenlit dozens of catalog titles for the format.

“We are seeing 4K UHD with HDR represent up to 10% of physical sales and a quickly growing percentage of digital sales as more platforms embrace the superior technology.  This technology is a huge boon to both consumers and filmmakers who are able to better realize their vision on home viewing platforms.  And the reality is that 4K UHD with HDR and object-based sound looks and sounds great.  It all contributes to the value proposition. “

Driving ownership of content, both physical and digital, is critical as the industry moves forward, executives agree.

“We continue to employ the most innovative and comprehensive tactics to drive ownership across both physical and digital platforms,” said Disney’s Marinelli. “We’ve had tremendous success implementing a number of strategic initiatives including pre-sale promotions, improving retail placement, expanding our social presence, producing live events and creating promotional partnerships. We are also committed to creating a superior in-home viewing experience that extends the consumer experience and deepens engagement.”

“We continually work with our retail partners to present consumers with compelling reasons to own, including superior audio and video presentations, early access, exclusive bonus features, special packaging, and more,” adds Paramount’s Bob Buchi. “Our job is to make our content readily available while maximizing revenue, which means carefully honing the distribution strategy of each title based on projected consumption. The great news is that the proliferation of platforms means consumers are enjoying our content in more ways than ever.”

Transactional video-on-demand (TVOD), which lets consumers “rent” a film or TV show for a limited streaming period, could use a shot in the arm.

“I am concerned that the consumer embrace of TVOD has not been as robust as we would have liked,” says the EMA’s Mark Fisher. “It remains a challenging business. Retailers and content providers are hesitant to invest in the category because it is not getting the desired growth, and we’re not seeing growth because investments are not being made. Delivery costs remain too high, and supply chain efficiencies need to be more widely embraced. EMA is actively working on both of those issues, and we will continue to do so because it is the right thing to do for the industry.”

Looking ahead to 2018, the prognosis among studios is essentially the same as it’s been at the end of the last few years – guarded optimism and a continued belief in the sales model.

Consumers’ appetite for home entertainment content remains remarkably robust,” says Universal Pictures’ Eddie Cunningham. “In fact, our research shows that a vast percentage of households continue to engage in the category whether via disc, digital or both.  Though there are many entertainment choices to distract consumers, offering tangible benefits unique to the format such as exceptional value, accessibility and utility of their favorite movies and TV shows reinforces the distinct advantages of ownership that you can’t get when renting or streaming.”

“I expect change to continue to be a factor in our industry in 2018 and beyond,” adds the EMA’s Mark Fisher.  “Movies Anywhere and Premium VOD, for example, will shake up the basic tenets of distribution and how and when consumers get content. Potential industry consolidations could significantly impact our industry as well. We shouldn’t fear any of this, but managing change will remain a challenge for all of us in the industry.

The home entertainment industry  “remains at the intersection of compelling content and technology, stemming from our consumers’ constant need for new and exciting experiences,” said Keith Feldman, President, Worldwide Home Entertainment, Twentieth Century Fox.

“Technology is moving at a rapid pace and we must evolve our content offerings to meet consumer expectations, which means delivering on next-generation technologies including 4K HDR, 5G and mobile content delivery, simple and functional solutions like Movies Anywhere and immersive experiences like virtual and augmented reality that accurately realize and extend the vision of our filmmakers.”

Disney’s Marinelli has high hopes for 2018. “Disney has the most impressive slate in the industry and we’re confident that 2018 will once again be a very successful year for us with the highly-anticipated in-home releases of Marvel Studios’ Thor: Ragnarok, Pixar’s Coco,Star Wars: The Last Jedi and The Walt Disney Signature Collection release of Lady and the Tramp.

“Movies Anywhere makes it easier than ever to build a digital movie collection. So far we’ve seen an incredible consumer response and believe that by offering a one-of-a kind experience, digital movie purchases will grow.  We will continue to work with the other studios and our digital retailer partners on programs to deliver exclusive content and offers that we believe will be important to driving engagement in the apps and website.”

“The choice between digital and physical is no longer an either/or proposition,” notes Paramount’s Bob Buchi. “We recognize that home entertainment has become a dynamic mix of consumption with opportunities across the spectrum.  Consumer behavior increasingly includes combinations of subscribing, transacting, renting, and buying, and greater comfort switching between digital and physical formats.  Our goal for 2018 is to make sure consumers have easy access to our content in the many ways they want to enjoy it.”

(This article previously appeared in Home Media Magazine.)