Universal, Warner Bros. To Merge Domestic Disc Businesses

After a year of two gigantic mergers, Hollywood is welcoming the new year with further consolidation — this time, in the home entertainment sector.

Universal Pictures and Warner Bros. on Jan. 15 announced plans to merge their physical distribution businesses.

On the domestic front, the two studios are establishing a joint venture to market and distribute Blu-ray Discs, DVDs and 4K Ultra HD discs in the United States and Canada.

The new unit, which still must be approved by the U.S. Justice Department, is expected to officially launch early in 2021. It will combine the existing domestic disc businesses of Universal Pictures Home Entertainment (UPHE) and Warner Bros. Home Entertainment, and be headed by current UPHE President Eddie Cunningham.

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Internationally, territories will be broken up through licensing arrangements. Warner Bros. will assume distribution duties of UPHE discs in the United Kingdom, Italy, and Benelux (Belgium, The Netherlands and Luxembourg). UPHE will distribute Warner products in Germany, Austria, Switzerland, and Japan.

The digital distribution business at each studio will not be affected.

The proposed union covers new releases and library titles as well as television content, and will be operational for up to 10 years.

The domestic joint venture will include leadership from both UPHE and Warner Bros., and covers trade marketing, sales and distribution.

Consumer marketing remains with each studio.

The announcement was made by Peter Levinsohn, president and Chief Distribution Officer of the Universal Filmed Entertainment Group, and Ron Sanders, president of Worldwide Theatrical Distribution & Home Entertainment and EVP of International Business Operations at Warner Bros.

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“As the home entertainment landscape evolves, we are continuously working to deliver the best entertainment range and value to our fans,” said Sanders.  “The physical business is still an important and active category for the industry.  This proposed joint venture with Universal gives us the best opportunity to foster innovation in this business, optimize the physical offering and extend the lifespan of the format for our fans and consumers.”

“With market conditions and consumer viewing behaviors continuing to evolve, we wanted a partner who shares in our commitment to deliver the best consumer proposition going forward,” Levinsohn said. “This proposed JV presents a significant opportunity to continue to work with our retail partners to ensure the format’s strength and sustainability for years to come.”

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On the appointment of Cunningham, Levinsohn said, “For more than two decades Eddie has been an expert in understanding the evolution of the physical home entertainment landscape.  He’s been a dynamic leader in shepherding business innovation and operational effectiveness.”

This is not the first time studios have joined forces in their home entertainment endeavors. In the early 1980s, Columbia (now Sony) Pictures created a joint venture with RCA to distribute videocassettes to the then-burgeoning rental market. RCA/Columbia Pictures Home Video was in operation for more than a decade; in the meantime, the industry saw several other joint ventures, including CBS/Fox Video and Thorn-EMI/HBO Video.

Gallagher Tapped to Replace Longwell as MD, North America, at Universal

Universal Pictures Home Entertainment (UPHE) on March 30 announced the promotion of sales and retail marketing executive Kathleen Gallagher to EVP and managing director, North America.

Gallagher will lead UPHE’s physical home entertainment business, including sales, operations, finance, customer marketing and distribution partnerships across the United States and Canada.

“Kathleen’s sharp instincts and expert insights have long been pivotal to UPHE’s evolution of standards, processes and best practices across the nation’s largest retailers,” said Eddie Cunningham, president of UPHE. “She is a talented executive with a deep knowledge of the home entertainment landscape, making her the ideal choice to lead UPHE’s North American retail business into the future.”

Gallagher most recently was SVP of sales, customer marketing, and category management for UPHE’s U.S. physical sellthrough and rental businesses. She began her career at Universal in 2000 as assistant category manager and quickly advanced up the ranks, serving in various sales, category management and customer marketing positions.

Gallagher began her career in 1999 at Sony Pictures Entertainment, where she held sales planning positions within what was then Columbia TriStar Home Entertainment.

Gallagher replaces longtime UPHE executive Dick Longwell, who is retiring. Longwell has served UPHE in senior sales and distribution capacities since joining the company in 1998. Previously, he held similar roles at MGM Home Entertainment and Buena Vista Home Video.

Longwell initially left UPHE in 2012 as EVP of sales and category management for North America, but rejoined the studio in October 2016 as managing director of North America, a position he had been filling on an interim basis since John Morici left in January.

“Dick has been an exceptional leader and collaborator, expertly guiding our domestic business through change during the last two years,” Cunningham said. “While it is tough to see him go, we are grateful for the invaluable contributions he has made to UPHE’s advancement and wish him well in his next chapter.”