Restocking the Shelves, Part Four: Maximizing Recent Releases

Deep catalog product isn’t the only part of the studio library fueling home entertainment as theatrical titles are stalled during the pandemic.

Jason Spivak, EVP of U.S. distribution at Sony Pictures Television Distribution, notes that Sony Pictures had a full pipeline of high-profile product when the pandemic hit. “And we’ve been actively promoting those titles to keep them top of mind, as well as releases from the end of last year, like Little Women and Once Upon a Time in Hollywood,” he says.

“Mother’s Day gave us an opportunity to revisit one of our more recent releases, Greta Gerwig’s Little Women,” adds Sony Pictures Home Entertainment senior EVP of worldwide marketing Lexine Wong. “Our team worked with Hello Sunshine to help launch a brand-new online series called ‘Comedians on Classics’ just in time for the holiday. The content featured rising female comedian Taylor Tomlinson giving a fresh and hilarious take on the beloved Louisa May Alcott story, which resonated with the film’s audience. The video has been viewed over 515,000 times since launch.”

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Universal Pictures Home Entertainment is coming up with inventive ways to market films that premiered digitally at premium prices (due to the theaters shutting down) once they become available on Blu-ray Disc, DVD and regular digital channels.

“With captive at-home audiences demonstrating a heightened need for great family entertainment during this time, we recognized a unique opportunity to evolve and elevate our new home entertainment release for Trolls World Tour to fit the tone and tenor of the moment,” says Hilary Hoffman, EVP of global marketing, Universal Pictures Home Entertainment. “We created a robust Dance Party Edition offering that includes dynamic song and dance elements and all-new character-driven short-form content, we launched TikTok and Zoom-style Trolls music videos, and we adapted other marketing efforts to virtual tactics to remain connected to consumers in real time and further keep Trolls World Tour relevant.”

At Warner Bros., the May release of Scoob! was the studio’s first-ever PVOD and premium digital ownership title. The animated film came to market through “a tremendous joint effort between our theatrical team and home entertainment,” says Jessica Schell, EVP and GM, film, for Warner Bros. Home Entertainment. “When the health crisis hit and the decision was made to release Scoob! in homes, the marketing campaign for the film shifted from theatrical to at-home messaging and we enjoyed a very successful release. International release plans were just announced and it will be a mix of theatrical exhibition in markets where theaters are open, and premium in-home viewing.”

Schell says the film has become Warner Bros.’ No. 1 digital release, ever.  “We recently announced our 4K and Blu-ray release dates for Scoob!,” Schell says, “and we are leveraging the extensive at-home messaging and awareness from the May debut and are drafting heavily on the film’s success to continue strong sales through our physical availability.”

See also: Restocking the Shelves, Part Three: Seeing Through Windows

See also: Restocking the Shelves, Part Two: Home Entertainment Marketing Shifts Into High Gear

See also: Restocking the Shelves, Part One: Home Entertainment Divisions Mine Catalog as Theatrical Slate Stalls

Bob Bakish

Home entertainment’s success in supporting new releases cut off by theater closings is attracting attention from the studio hierarchy. Bob Bakish, CEO of ViacomCBS, Paramount Pictures’ parent company, sang the praises of home entertainment during a presentation during the first Credit Suisse Virtual Communication Confab in mid-June. He said home entertainment has helped Paramount justify capital spending on new movies during a year of uncertainty.

“We sold The Lovebirds [to Netflix] early in the COVID-19 window,” he said. “We also accelerated the EST window with Sonic [the Hedgehog], which performed very well for us.”

The movie, starring Jim Carrey, James Marsden, Tika Sumpter and Ben Schwartz as the voice of Sonic, grossed more than $300 million at the global box office before the theatrical shutdown.

The executive said the company is monetizing the Paramount library by releasing more than 100 movies via CBS All Access and through the “Sunday Night Movie” on the Paramount Network.

While the theatrical pipeline may be stalled for now, home entertainment executives look forward to its robust return.

Ron Schwartz

Ron Schwartz, the longtime president of worldwide home entertainment at Lionsgate, says the entertainment industry is united in helping the theatrical exhibition business return to full strength quickly.

“We, like everybody else, are eager to see our partners in the theater business open again soon,” he says. “We want to see crowds again flock to theaters, to see tentpoles and art-house films, to buy concessions and to enjoy a tremendous community experience that has made our industry so special for so many years. It’s an important part of our ecosystem, and we’re all looking forward to a safe and productive return to the movie-going experience, which we believe is right around the corner.”

Some challenges lie ahead, Schwartz says: “What will exhibition look like when theaters reopen? What’s going to happen with capacity? We can’t rush back, but we have to make sure we give theaters enough great content so they can re-open quickly, successfully, and thrive.”

The home entertainment side of the business, Schwartz says, will remain catalog-driven until theaters have fully re-opened and the supply of theatrical titles has been completely replenished. “We will continue to work with our retail partners to come up with creative ideas, dig deep into our catalogs, and look for repromotes and anniversaries — any opportunities to engage the consumer,” he says.

Schwartz says he is heartened that during the stay-at-home period, the public’s love of movies, TV shows and other filmed content seemed to intensify.

“The one thing we’ve all seen is a love of content,” he says. “We’re seeing it consumed like never before — physical, streaming, transactional, packages — and it is clearly evident that the public’s appetite to consume our product is not only healthy but still growing. That’s why I remain so bullish about our business.”

Editor’s Note: This is the fourth and final installment in a four-part series, “Restocking the Shelves: With No Theatrical Releases, Studio Home Entertainment Marketers are Getting Creative.” The complete story will be available in the July print and digital editions of ‘Media Play News.’

Lionsgate Renews Home Video Deal With Grindstone Entertainment

Lionsgate has extended a 12-year partnership with Grindstone Entertainment Group, entering new multiyear agreements with Grindstone CEO Barry Brooker and principal Stan Wertlieb, according to Ron Schwartz, president of worldwide home entertainment at Lionsgate.

The new agreement features a slate of upcoming movies, including actioner Force of Nature, starring Mel Gibson, Emile Hirsch and Kate Bosworth; thriller Rogue, starring Transformers’ Megan Fox; comedy Guest House, starring Pauly Shore, Aimee Teegarden, Mike Castle and Steve-O; and thriller Hair of the Dog, starring Gerard Butler.

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“This extension continues a longstanding and mutually beneficial relationship for both our companies,” Schwartz said in a statement. “Barry and Stan are the best in the business and have built Grindstone into a home for great talent, exciting properties and a source of consistent profitability.”

Schwartz noted that, in addition to the upcoming slate, Grindstone has amassed a 500-title catalog of content during it partnership with Lionsgate Home Entertainment.

“Our relationships with producers, filmmakers and stars continues to drive our ability to distinguish ourselves as innovators in the current streaming environment, and we will continue to pivot to take advantage of the marketplace,” said Brooker and Wertlieb.

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Recent Grindstone successes include the last two installments of the Escape Plan franchise, Escape Plan 2: Hades and Escape Plan 3: The Extractors, starring Sylvester Stallone, Curtis “50 Cent” Jackson and Dave Bautista, and thriller, The Poison Rose, starring John Travolta, Morgan Freeman, Famke Janssen and Brendan Fraser.

Home Entertainment Execs Predict More Turbulence as the ‘Roaring’ ‘20s Get Underway

Coming off a year of momentous change, home entertainment executives expect more turbulence to hit their business in 2020.

Streaming has clearly become the dominant force, with two more high-profile subscription streaming services scheduled to launch in 2020. Comcast/NBC Universal in April will bow Peacock, with more than 15,000 hours of content and a free, ad-supported service as well. A month later, WarnerMedia will debut HBO Max, with a large library of titles from across the media titan’s family — including a curated list of classic movies.

And then there’s Quibi, a mobile-centric, short-form video platform launching in April, the brainchild of ex-Disney and DreamWorks chief Jeffrey Katzenberg.

But home entertainment executives, whose proverbial bread-and-butter has always been the transactional model — in which consumers pay a set fee to either buy or rent a movie, TV series or other filmed content, either digitally or on disc — insist there’s enough of an audience for both aspects of the home entertainment (or at-home, or direct-to-consumer) business.

“With an abundance of exceptional content combined with a plethora of platforms, we can expect a ‘roaring’ start to the ’20s as consumers are met with a mass of entertainment options,” says Bob Buchi, president of Paramount Home Entertainment. “It is now the challenge of the industry to focus on marketing and distribution to hone the messaging and delivery to meet the varied needs of consumers across linear, on-demand, subscription and transactional.

“While SVOD has captured the attention of consumers and created an ‘always on’ expectation, the transactional business continues to offer very unique and important consumer propositions: the first post-theatrical home viewing opportunity, the greatest breadth of selection, the highest quality viewing options, and custom bonus content to extend the entertainment experience. The data continues to show that SVOD and transactional can co-exist and thrive. More than half of viewers are involved in both activities, and despite the availability of catalog titles on SVOD platforms, we at Paramount saw record sales numbers for our catalog in 2019.”

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Jason Spivak, EVP of distribution at Sony Pictures Home Entertainment, is similarly optimistic. “As the business evolves consumers are becoming increasingly aware and comfortable with the ways that various distribution models fit together,” he says. “While SVOD delivers great value for many use occasions and types of content, the benefits of transactional models — recency, collectability and image quality — also continue to be prominent, especially in regard to new release theatrical content, and premier catalog titles.”

“Obviously we have been paying very close attention to growth and adoption of streaming services, and we are constantly evaluating their impact on our physical and digital business,” adds Jim Wuthrich, president of Warner Bros. Home Entertainment & Games. “With Warner Media’s HBO Max coming in 2020 the industry will continue to grow.  And as the business grows, so does access to an ever-increasing new consumer base who are familiarizing themselves with digital transactions and streaming, so it opens doors for us to bring in new audiences for our products and content.”

Ron Schwartz, president of worldwide home entertainment for Lionsgate, says “the transactional home entertainment space remains a very dynamic and robust business for our many types of content.” He touts the success on both digital and physical platforms of John Wick: Chapter 3 and Angel Has Fallen, calling those two films “great examples of the type of content that home entertainment consumers want to own. Overall, multiple steaming platforms and transactional, physical and digital will all continue to coexist as the marketplace continues to evolve.”

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Digital retailers agree. “In 2020, we think transactional and subscription will both continue to grow because they complement one another,” says Cameron Douglas, head of FandangoNow. “Nowadays, digital entertainment is a mainstream business. Every TV is connected and OTT services have become the norm for audiences looking for content at home. The growth bodes well for the future of our industry.”

Even at Disney, where much of the focus is on the much-hyped Disney+ service, there’s room for transactional, according to David Kite, SVP of marketing for Disney Media Distribution.

“With this year’s acquisition of 20th Century Fox, we remain committed to both digital and physical ownership,” Kite says. “We successfully integrated the Fox team into the expansive Disney home entertainment organization and have implemented a unified strategy that includes a more synergistic approach across key lines of business. We’re looking forward to another exciting year across both physical and digital platforms with a wide-range slate of home entertainment releases.”

In the first quarter of 2020, Kite says, “We will be releasing two very promising titles — the critically acclaimed awards contenders Jojo Rabbit and Ford v Ferrari.  We’re also excited about the rollouts of Frozen IIStar Wars: The Rise of Skywalker, Marvel Studios’ Black Widow, Disney-Pixar’s Onward and the live-action Mulan as our customers continue to build their libraries.”

While disc sales will likely continue to decline in 2020, no one’s giving up on DVD, Blu-ray Disc or, in particular, 4K Ultra HD.

“The 4K UHD physical market will continue to experience growth throughout 2020,” says Eddie Cunningham, president of Universal Pictures Home Entertainment. “We are encouraged by industry forecasts, which anticipate the sales of that format in North America alone will deliver 25% of Blu-ray Disc dollars in 2020.”

“We will continue to release the majority of our new release titles in the highest possible definition and also mine our vast catalog library for worthy and deserving films to be remastered, as we did this year with The Wizard of Oz,” adds Wuthrich. “The desire for classic titles in the ultimate high-definition format is definitely a factor in the continued momentum of 4K UHD.”

Spivak agrees. “As consumer viewing habits evolve, the disc remains a prominent part of the home entertainment market, particularly given the steady growth for 4K Ultra HD,” he says. “With households nationwide regularly upgrading their TVs to 4K UHD there’s every indication that 4K UHD will evolve beyond a niche audience of format enthusiasts. We will continue to put out most of our new releases and select catalog in UHD, while working with retailers to expand placement and experimenting with features that make the product most attractive to consumers.”

Disney’s Kite is similarly optimistic for the disc business. “Physical ownership remains a robust line of business for us, especially among the collectible consumer,” he says. “There continues to be a healthy appetite for the physical format, particularly with premium, and we already have substantial plans in place for 2020.”

Universal’s Cunningham stresses the importance of retail partnerships in maximizing the transactional model’s potential.

“Given that physical and digital transactional consumption rates are remaining steady year over year and that disc purchases are making up more than half of that consumption, there’s no question that movie buyers continue to be vitally important to retail,” he says. “At no other time in our industry has it been more critical to ensure that we work together to retain the loyalty of movie consumers, creating urgency for our products and delivering the utmost value, quality, accessibility and convenience possible.

“It is important for us to continue supporting our retail partners with creative thought leadership and close collaboration to ensure that we collectively continue to capture shopper attention and deliver key, compelling reasons to transact.”

Sony Pictures’ Spivak agrees. “More than ever we must embrace the fact that our retail partnerships are multi-faceted and cross distribution models — from transactional to SVOD and AVOD,” he says. “Ultimately, our mutual objective is maximizing the consumer value proposition and providing the best potential viewer experience.”

2019: Home Entertainment to Thrive on Change

If there’s any truth to the adage “change or die,” then the home entertainment business has plenty of life left in it as we begin 2019.

The coming year will bring significant changes, as studios and distributors continue to rejigger business models to reflect changing consumer habits domestically and worldwide.

Walt Disney will finalize its merger with 20th Century Fox, leaving Hollywood with five major studios, not six. AT&T will continue the integration process with the former Time Warner, now known as WarnerMedia.

And if you thought subscription streaming had a banner year in 2018, 2019 will likely see even bigger growth, with the emergence of at least two formidable challengers to longtime market leader Netflix.

Walt Disney will finally launch its much-ballyhooed SVOD service, Disney+, with a focus on the same content that rules at the box office: “Star Wars” and all things Marvel. The first “Star Wars” live-action series, “The Mandalorian,” should arrive later this year, and Disney recently announced a prequel series based on Rogue One character Cassian Andor (played by Diego Luna). Disney also confirmed Disney+ is developing a live-action Marvel series centered around Loki, from the “Avengers” movies.

Not to be outdone, AT&T’s WarnerMedia also plans on launching a direct-to-consumer streaming platform in 2019, with three different services, including a premium one fronted by HBO, home of mega-hit “Game of Thrones.”

The latest numbers from DEG: The Digital Entertainment Group show consumer spending on subscription streaming grew 30% in the first nine months of 2018.  If that growth rate held up through the end of 2018, then consumers will have spent nearly $12.3 million on subscription streaming, or SVOD (subscription video-on-demand).

How high consumer spending on SVOD will grow in 2019 remains anyone’s guess, although observers believe continued double-digit gains in line with prior years is the most likely scenario as consumers continue to “cut the chord” with pay-TV services.

Last August, research firm eMarketer said it expected the number of U.S. cord-cutters — adults who have canceled a pay TV service and continue without it — to climb by 32.8% in 2018 to 33 million. The number of subscription OTT video service viewers, meanwhile, was on track to rise to 170.1 million, or 51.7% of the U.S. population.

The “VOD” that the studios are most intent to grow, transactional VOD, posted a surprising growth spurt in the third quarter of 2018 — 18% for electronic sellthrough, or EST, and 10% for digital rentals.

Michael Pachter, a senior media analyst with Wedbush Securities in Los Angeles, doesn’t see SVOD making much of a dent in TVOD in 2019.

“Transactional VOD should be relatively flat, as Netflix has few — if any — programs that people typically rent,” he said. “They have no new movies — once Disney pulls its films — and few current TV shows, although I suppose some TVOD is for older television series.  My sense is that the bulk of TVOD is new movies, with some catchup TV from current season TV shows, neither of which is carried on Netflix to any great extent.”

Jim Wuthrich, president, Warner Bros. Worldwide Home Entertainment and Games, agrees that the transactional business and streaming can peacefully co-exist.

“Consumers have more choices for content than ever before, and on demand streaming services are increasingly their go-to option,” he said. “On an aggregate basis, the streaming services have helped transactional services become mainstream, encouraging consumers to connect their devices to on-demand video.

“On a title basis, transactional demand drops when it’s on a major SVOD service, but transactional demand returns when the title rolls off the service. Ultimately we are competing for consumer attention and transactional services generally offer first in-home viewing and always on availability – a distinct and unique proposition.”

Looking ahead, Amy Jo Smith, president and CEO of DEG: The Digital Entertainment Group, says 2019 will be the most exciting yet for digital media.

“2018 has been a lot about the notion of how transaction and subscription distribution models can co-exist, and content owners have begun to lay foundations for their direct-to-consumer businesses,” Smith said. “In 2019, we will see the world’s biggest content owners actually beginning to deliver very high-profile entertainment directly to consumers, and as they do that they will gain the most detailed view yet of who their customers are and what their fan base craves.

“As a result, content owners will become smarter about how to reach consumers and the content delivery experience will improve. As direct-to-consumer offerings multiply, consumers will continue to sort out what is meaningful for them. They will prioritize the content they find worthy of collection and also decide what provides value for a monthly subscription.”

Accordingly, studio executives agree that in 2019, their No. 1 priority will be to continue to growth the transactional, or on-demand business — both physical and digital.

“We are taking a deep dive into consumer behavior as we continue to navigate the changing home entertainment landscape,” said Bob Buchi, president, worldwide home media distribution, for Paramount Pictures. “We’ll be sharing the results of quantitative and qualitative studies with our retail partners to work with them on crafting innovative strategies for reaching consumers and driving transactional sales.

“There is untapped potential in light and lapsed consumers who may have slowed their entertainment collecting and ongoing opportunity with heavy users who value high quality offerings. We’re going to work with our retail partners to maximize our learnings and strategically target diverse consumer groups.”

“Our focus remains on delivering a product offering and value proposition that enables the best consumer experience to continue the expansion and adoption of digital sell-through (and VOD for that matter),” said Michael Bonner, EVP of digital distribution at NBC Universal. “Improving these experiences through product enhancements like premium formats or interactive extras along with embracing new services like Movies Anywhere are just a few examples of how we’re investing as an industry.”

Warner’s Wuthrich agrees. “We believe there’ll be continued growth in digital transactions in 2019,” he said. “We have great momentum coming out of 2018 and have a number of programs to remind movie and TV fans that their favorite content is a click away. In addition to using performance marketing to help connect consumers with the content they love we’ll be introducing a fresh approach to advertising.”

Ron Schwartz, president of Lionsgate Worldwide Home Entertainment, said the key points on his agenda for 2019 are “continuing to create progressive windowing and focused strategies for our specialty and multi-platforms releases, and continuing to grow the digital business while maximizing results on the physical side.”

“Lifecycle management is more critical than ever, particularly with franchises,” he said. “For example, we’ll be working with our partners on compelling catalog initiatives such as ‘John Wick’, as well as on the third installment, throughout the distribution windows, providing more access and innovative marketing to keep fans engaged.”

As consumer habits continue to evolve, digital movie sales and rentals — electronic sellthrough (EST) and transactional video-on-demand (TVOD) — will remain a priority, Schwartz said.

“We saw a significant increase in industry spending in this area in 2018, up 20%, and we will continue to collaborate with our retail partners on fresh ideas to keep consumer interest alive,” he said. “We see a large and growing market with multi-platform and specialty releases and will continue to build our leadership in this area.”

While studio executives agree their focus on 2019 will be to grow the digital side of the business, they aren’t giving up on the physical disc — particularly with the rapid acceptance of 4K Ultra HD.

“4K will continue to gather momentum as more consumers experience the incredible quality of the content on their 4K televisions,” said Paramount’s Bob Buchi. “Paramount will offer most of our theatrical releases on 4K UHD Blu-ray, as well as carefully chosen titles from our vast library.  The response to our catalog 4K releases has been very promising, so we expect to see increased interest in owning treasured classics in the very best format available.”

“Consumers decide how, when and where they want to experience our content, and the physical disc remains a valuable option for them,” adds Chris Oldre, EVP of pay TV, digital and international distribution at Walt Disney Direct-to-Consumer and International.

“We view the business holistically, with physical and digital ownership as one market. Our continued commitment to including the digital code delivers the added value of streaming, too, and the introduction of Movies Anywhere as a simple, fast method to redeem that code delivers the best of both worlds — physical and digital — in one experience.”

Oldre said he’s particularly excited “about the incredible range of content that will be offered by Disney in 2019, and with our continued commitment to delivering best-in-class experiences, we’re looking forward to another exciting year across both physical and digital platforms.”

“The home entertainment releases of Ralph Breaks the Internet and Mary Poppins Returns will offer the kind of trusted family entertainment that Disney is known for,” he said. “Later in the year we’re introducing a new Marvel character to the home entertainment audience with Captain Marvel, and we will be closing out a truly iconic series with Avengers: Endgame.

“In addition, Disney’s brands and franchises are content that consumers want to own and a significant portion of our revenue comes from our library of classic and timeless titles that continue to entertain generation after generation.”

In the first quarter on 2019, Oldre said, “we’ll be celebrating the eagerly anticipated 30th anniversary of The Little Mermaid.  Those are just a few of the highlights of the year ahead, which will see us continue to roll out releases in 4K UHD, as well as continuing to focus our efforts on growing Movies Anywhere and educating consumers about the ease of building a digital library.”

Independents, meanwhile, are looking for whichever distribution channels and platforms that make the most sense.

“I am really focused on watching three exciting trends that will have enormous impact on the ever-changing entertainment landscape,” said Bill Sondheim, president of the Cinedigm Entertainment Group, who in November 2018 took on additional duties as President of worldwide distribution.

“First is the battle for SVOD dominance that really starts in earnest when Disney launches its direct-to-consumer streaming service to compete head on with Netflix,” said Sondheim, who in his expanded role continues to lead the company’s growing China/North America business pipeline, in addition to managing distribution in the rest of the world.

“This will likely create audience migrations that will have far reaching impact on the mid-tier SVOD players more that the top-tier providers,” Sondheim said. “The second trend to watch is AVOD’s explosive growth, which may be a prime beneficiary of the audience shifts that will occur in the SVOD battles mentioned above. The AVOD segment has long been the held back due to lower quality content or older catalog offerings, but as the cost of SVOD consumption grows, the AVOD alternative is rapidly evolving with higher caliber brands and newer content that will drive audience adoption.

“Finally the arrival of 5G broadband will start to demonstrate the impact of true high speed wireless connections. While it will likely be more than two years before we have a true nationwide network, 5G will start to make an impact in most major cities later this year.”

“Buckle up,” he added. “It is going to be a year of massive growth and further disruptive change.”

2018: Getting Along in a Multi-Platform World

Back in 1989, a State Department official named Francis Fukuyama wrote a controversial essay on the “end of history,” opining that the collapse of the Soviet Union and Eastern bloc communism, the reform movement in China, and the reunification of Germany signaled a triumph for Western democracy and a very real promise of freedom and liberty for all.

Fukuyama’s vision of a global utopia didn’t last long, but for a brief moment in time cultural and political differences seemed to be set aside in favor of everyone working together to make the world a better place.

Similarly, in 2018 the various factions in home entertainment seemed to set aside their differences and recognize that we’re living in a multi-platform world — and that a peaceful coexistence between disc and digital, subscription and transactional, was, indeed, possible.

“2018 saw the continued integration of technology and content at an even more accelerated pace, and, with that, the opportunity to engage fans with more focused and meaningful experiences that extend the life of our film and television properties,” said Keith Feldman, president of worldwide home entertainment for 20th Century Fox.

Indeed, studios cut back on selling content to Netflix — most notably Disney, which pulled all its movies off the service by the end of the year — in favor of issuing it on their own platforms. They rallied behind Movies Anywhere, a digital movie storage “locker” launched in October 2017, and saw digital movie sales soar, with an 18% gain reported in the third quarter of 2018, according to DEG: The Digital Entertainment Group numbers.

Netflix, meanwhile, vowed to spend $8 billion in 2018 on producing its own shows, with the goal of making its content library 50% original.

Studios that once sued Redbox for renting DVDs and Blu-ray Discs, claiming the kiosk vendor was cannibalizing disc sales, struck distribution deals in which prior holdbacks were either sharply cut back or eliminated. They also rallied behind Redbox On Demand, a digital movie store launched in December 2017.

On the retail front, big-box chains like Best Buy and Walmart put discs back into the spotlight, buoyed by the emergence of 4K Ultra HD Blu-ray.

And digital retailers like FandangoNow and Google Play revved up their promotional muscle and pumped up the message that they had fresh movies for sale or rent. FandangoNow even put up a notice on its home page, touting the fact that it offers “New releases not on Netflix, Hulu or Amazon Prime subscriptions.”

It was all part of a bigger picture, in a year dominated by major media mergers — AT&T buying Time Warner, Disney buying 20th Century Fox — suggesting it was high time to come together and restructure existing business models to reflect changing consumer habits.

Content, as always, was king, but the feuding fiefdoms of the past were at last coming to peace with each other — and with themselves.

Subscription streaming continued to dominate the home entertainment business in 2018. Indeed, in the first nine months of this year, according to DEG: The Digital Entertainment Group, consumer spending on Netflix and other subscription streaming services rose more than 30% to $9.4 billion, nearly $2 billion more than consumers spent on all other forms of home entertainment combined– disc purchases ($2.79 billion) and rentals ($1.37 billion); digital purchases, or electronic sellthrough (EST, $1.8 billion),  and digital rentals, or transactional video-on-demand (TVOD, $1.57 billion).

But where Hollywood once saw a threat, in 2018 the studios saw an opportunity. As consumers, thanks to streaming, became increasingly accustomed to viewing movies and other content electronically, studios focused on moving them toward on-demand digital purchases or rentals — driving home the message that new releases aren’t typically available through subscriptions.

“Our comprehensive and strategic efforts to drive digital ownership and bolster engagement such as leveraging the early window, offering exclusive extras and emphasizing the best viewing experience possible are proving to be very effective as consumers continue to move toward and embrace the digital experience,” said Chris Oldre, EVP of pay TV, digital and international distribution at Walt Disney Direct-to-Consumer and International.

“Movies Anywhere has had a tremendous impact on transforming digital consumption and is a testament to the strength of the studios and digital retailers that have joined forces on an unprecedented scale. This year Disney once again experienced remarkable growth as our digital sales exceeded expectations in conjunction with the studio’s unrivaled box office success. Disney has the top three bestselling digital titles to date with Avengers: Infinity War, Black Panther and Thor: Ragnarok. We’re also incredibly proud of our celebration of Marvel’s 10-year anniversary this year.  We promoted the Marvel Cinematic Universe home entertainment catalog with a special sales promotion across digital, which undoubtedly helped propel Avengers: Infinity War to the No. 1 live-action spot on the all-time digital sales chart in a record-setting period.”

Ron Schwartz, president of Lionsgate Worldwide Home Entertainment, said that as consumer habits evolve, digital movie sales and rentals – electronic sellthrough (EST) and transactional video-on-demand (TVOD) — remain a priority. “We saw a significant increase in industry spending in this area in 2018, up 20%, and we will continue to collaborate with our retail partners on fresh ideas to keep consumer interest alive,” he said. “We see a large and growing market with multi-platform and specialty releases and will continue to build our leadership in this area.”

At the same time, Schwartz notes, “Disc sales remain robust … 4K UHD BD is rapidly gaining in popularity, as spend is on track to double this year versus last. We are committed to serving our audiences across the full spectrum of the digital   and physical business and we will continue to be a first mover in adapting these businesses as they continue to evolve.”

For Bob Buchi, president of worldwide home media distribution at Paramount Pictures, 2018 was the year of 4K.

“More than 42 million homes now have a 4K Ultra HD television and roughly 400 titles are available on 4K Ultra HD Blu-ray Disc and over 600 on Digital 4K,” Buchi said. “The numbers keep growing and for good reason: 4K brings home entertainment to life like never before, delivering content that better represents filmmakers’ original vision.  We’ve seen this play out with the week one 4K sales of Mission: Impossible — Fallout, which delivered our highest number of UHD discs sold, as well as the highest percentage of our physical sales ever.”

Disney’s Oldre agrees. “4K Ultra HD is a robust line of business for us and we’re experiencing healthy growth,” he said. “We continue to receive solid support from our physical retail partners and are confident it’s a market that our customers will continue to embrace given the format’s premier resolution.”

Catalog sales were another bright spot in 2018, Buchi said. “We’ve seen our digital catalog sales growing in markets around the world, including a 35% increase domestically through October, which indicates that more and more consumers have become comfortable with the format and are returning to the concept of building collections.  In addition, physical catalog sales have exceeded our expectations, as we continue to make concerted efforts to celebrate anniversaries of classic titles and strategically promote films from our library.”

Retailers certainly did their part in pushing the transactional business. At Best Buy and Walmart, the emergence of 4K Ultra HD Blu-ray led to bigger disc sections and, in the case of Best Buy, placement back in the center of the store.

Redbox in 2018 relaunched its brand, which included some major ad campaigns and sponsorships, including the Redbox Bowl college football game on New Year’s Eve at Levi’s Stadium in Santa Clara, Calif. The company also revamped its loyalty program; negotiated more favorable distribution deals with studios; and expanded the availability of previously rented movies and video games at kiosks.

The Redbox On Demand digital service, meanwhile, celebrated its first birthday in December with a new app on Vizio SmartCast TVs. The company also expanded its selection to 12,000 titles, from 7,000 at launch. CEO Galen Smith in December told Media Play News that Redbox On Demand has “surpassed major milestones to become a real player in the competitive digital home entertainment space. We’re seeing hundreds of thousands of customers, including bringing back folks we haven’t seen in a while.”

FandangoNow, a business unit of movie-ticket seller Fandango, struck deals with most major studios that allow it to package movie rentals into “binge bundles” that let consumers watch multiple movies at a lower price. The new offering launched on the Labor Day weekend with more than 100 bundles.

FandangoNow also cross-promotes digital movie sales and rentals with ticket sales. In December, just before the holidays, consumers who spent $20 on FandangoNow received $8 toward a movie ticket.

In the end, studio executives agree, it all comes down to keeping consumers engaged — which requires constant work.

“From a functional solution like Movies Anywhere that allows consumers to build and enjoy a streamlined digital library, to premium viewing with 4K HDR, to story extensions through virtual reality and other emerging formats, keeping consumers invested and engaged requires constant experimentation and innovation,” says Fox’s Keith Feldman. “Our ongoing challenge is to exceed consumer expectations today and simultaneously deliver next-generation offerings that will continue that engagement in the future.”

Lionsgate Taps Kozlowski to Head Home Entertainment, Digital Distribution Marketing

Lionsgate Oct. 10 announced the promotion of marketing executive Amanda Kozlowski to EVP of home entertainment and digital distribution marketing.

Kozlowski, a 10-year veteran of the company, in her new role will oversee Lionsgate’s marketing efforts across traditional and emerging platforms and technologies for the entire home entertainment and digital distribution division.

Amanda Kozlowski

This includes home entertainment distribution of Lionsgate’s feature film slate, titles from one of the largest independent television businesses in the world, Starz’s original programming slate, a 17,000-title film and television library, and third-party titles from such content companies as StudioCanal, Grindstone, A24, Amazon Studios, CBS Films, and sister company Roadside Attractions, among others.

Kozlowski also is charged with managing the department’s media planning, marketing technology platforms and data analytics.

“In this changing environment, it’s crucial to have someone who can bring a fresh and innovative perspective to how we approach the market and there’s no one better qualified than Amanda,” Lionsgate president of worldwide home entertainment Ron Schwartz and president of worldwide television and digital distribution Jim Packer said in a joint statement.

“Her incredible track record, vision and dedication to our prolific home entertainment business makes her the perfect candidate to lead our marketing group.”

Kozlowski previously served as SVP of digital marketing, leading the digital marketing strategy for the department. She also has overseen the execution of Lionsgate’s domestic EST/VOD sales efforts and distribution deals with Roadside Attractions, Miramax Films and StudioCanal.

Prior to joining Lionsgate, Kozlowski oversaw campaigns for marketing agency A.D.D. Marketing + Advertising as well for the nonprofit organization Film Independent.

Kozlowski holds a bachelor’s degree from the University of South Carolina.