Wal*Mart Goes Blu-ray, Toshiba May Pull The Plug on HD DVD

February 16, 2008

Retailing giant Wal-Mart Stores Inc Friday announcement that it would abandon the HD DVD format and only stock its shelves with Blu-ray movies, may be the straw that broke the formats back.

Toshiba is expected to pull the plug on its HD DVD format sometime in the coming weeks, chant reliable industry sources. A rash of defections by Netflix, Blockbuster and Best Buy recently followed Warner Home Video’s announcement last January that it would only support the Blu-ray Disc format after May, 2008.

On-Line mega retailer Amazon.com has made no indication but is offering 50% off on 150 HD DVD titles, including "Transformers", "The Sting", "Stardust" and a "Star Trek Set". Amazon is now also offering 5 Free titles with purchase of Toshiba HD DVD players that are reduced as much as 50%."

Jodi Sally, VP of marketing for Toshiba America Consumer Products said, “Based on its technological advancements, we continue to believe HD DVD is the best format for consumers, given the value and consistent quality inherent in our player offerings.” Sally did hint that something was in the air. “Given the market developments in the past month,” she said, “Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players.”

Toshiba cut its HD DVD player prices by as much as half, effective January 15 and courted the standard DVD crowd as well as high-def enthusiasts, noting in ads that their new players would make regular DVDs look much better also. Many HD DVD titles are "Combo" discs, touting the ability to play on standard DVD players as well as HD DVD players, further tempting undecided consumers. Toshiba even ran a 30 second HD DVD ad during the Super Bowl that reportedly cost over $2.5 million, but hoped for consumer sales have never materialized.

Immediately after the Warner switch to Blu-ray, the HD DVD North American Promotional Group canceled its Consumer Electronics Show presentation. The following week, data collected by The NPD Group gave Blu-ray 93% of all hardware sales for that week.

Another unnamed source at Toshiba confirmed a recent report by Japanese public broadcaster NHK that it was getting ready to pull the plug on HD DVD.

"We have entered the final stage of planning to make our exit from the next generation DVD business," said the source, who asked not to be identified. He added that an official announcement could come as early as next week.

NHK said Toshiba would suffer losses running to hundreds of millions of dollars to scrap production of HD DVD players and recorders and other steps to withdraw from the business.

The substantial loss Toshiba is incurring with each deeply discounted HD DVD player sold, a figure sources say could be as high as several hundred dollars each, coupled with a series of high-profile retail defections, may cause the company to at last concede defeat.

The latest Nielsen VideoScan First Alert sales data show the top-selling Blu-ray Disc title for the week, Sony Pictures "Across the Universe", sold more than three times as many copies the week ending Feb. 10 as the top HD DVD seller, Universal Studios "Elizabeth: The Golden Age". Blu-ray Disc titles also accounted for 81% of all high-def disc sales for the week, with HD DVD at just 19%.

Microsoft is another big player in the HD DVD equation, but has not yet commented on recent developments and defections.

Both Microsoft and Intel were early backers of Toshiba's HD DVD format while ignoring Sony's Blu-ray, somewhat mirroring the competition between Microsoft's Xbox (w/ optional HD DVD ability) and Sony's PS3 PlayStation that plays Blu-ray discs.

Blu-ray support among independent studios is also rising. ADV Films, Topics Entertainment, National Geographic and Tai Seng Entertainment are all going Blu-ray exclusively. Independents Surround Records and Opus Arte, previously exclusive to HD DVD, will now also offer Blu-ray as well.

Tolkien's Take New Line Cinema Corp. To Court

February 13, 2008

The estate of J.R.R. Tolkien is suing New Line Cinema in court. The heirs of the noted British author allege the company hasn’t paid the estate money owed to them from box-office receipts and DVD sales from the three “Lord of the Rings” films.

The Tolkien Trust, which is run by the author's son, Christopher, and his sister Priscilla, have filed a lawsuit in Los Angeles accusing New Line Cinema of "insatiable greed" and engaging in the "infamous practice of creative 'Hollywood accounting'".

The Tolkiens claim that New Line excluded certain revenues from its calculations and artificially inflated costs so that it did not have to pay the money owed them.

The Associated Press reports The Tolkien Trust and others were promised 7.5% of gross profits from the films, and the suit seeks at least $150 million. The suit also asks that the Trust be allowed to terminate any rights the studio has to other Tolkien works, including “The Hobbit.” Production on the two-film prequel to the three “Lord of the Rings” movies is scheduled to start in 2009.

One of the biggest box office successes in Hollywood's history, the trilogy is estimated to have made almost $6 billion worldwide since 2001 - yet the heirs of the author claim that they have not been paid the royalties they are due.

New Line has declined to comment. The case is the second “Lord of the Rings” court case brought against New Line. Three years ago Peter Jackson, who directed the three films, started legal proceedings against the studio over profits.

The parties came to an agreement last December, paving the way for Mr. Jackson to serve as producer on New Line's adaptation of The Hobbit, the JRR Tolkien novel that precedes the Lord of the Rings trilogy.

Lucasfilm's "Star Wars - The Clone Wars" To Hit Theaters in August

February 12, 2008

A New Star Wars Film is comimg to the big screen in CG-animation form.

On Monday, Lucasfilm, Warner Bros. and Turner Broadcasting System announced that the animated movie "Star Wars: The Clone Wars" would hit movie theaters August 15, 2008.

The film, produced by Lucasfilm Animation, will be followed by a cable series in the fall for Cartoon Network and TNT featuring 30-minute "mini-movies."

"I felt there were a lot more 'Star Wars' stories left to tell," said George Lucas, who will executive produce the project. "I was eager to start telling some of them through animation and at the same time push the art of animation forward."

Both the film and TV mini-movies will mix favorite Star Wars heroes such as Anakin Skywalker, Obi-Wan Kenobi and Padme Amidala with new ones like Anakin's Padawan learner, Ahsoka. Palpatine, Count Dooku and General Grievous round out the cast of sinister villains poised to rule the galaxy.

Lucasfilm already has produced more than 30 episodes of The Clone Wars, which will follow from theater to TV the fate of the universe that rests in the hands of the Jedi Knights.

Market Research Shows Februrary,
2009 May Adversly Affect Millions of TV Viewers

February 12, 2008

The New York Times quotes a new study by the Centris market research firm in Los Angeles, "Gaps in broadcast signals that may leave an estimated 5.9 million TV sets unable to receive as many channels as they did before the changeover." Even those who bought the government-approved converter boxes or a new digital TV may be affected. To keep broadcast reception, many viewers may have to buy new outdoor antennas, the study found.

The Centris study predicts greater disruption of service than government agencies like the FCC have acknowledged.

The federal government estimates that 21 million American households have primary TV sets that receive only over-the-air signals. But it says most will continue to get a digital signal by means of a digital-to-analog converter box, which costs about $50 to $70. The U.S. Government is helping to underwrite the cost of a converter box by issuing $40 coupons.

Centris said it looked at a more detailed method for predicting the coverage pattern of TV signals than the government had used.

However, the problems with reception could be far worse, according to engineers who have taken signal measurements. One study of the first HDTV station by Oded Bendov, the consultant hired to replace the broadcast antennas on the Empire State Building, found that digital signals did not travel as far as either model had predicted.

“For the people with rabbit-ear antennas, I would say at least 50 percent won’t get the channels they were getting,” Dr. Bendov said. “I would say a lot of people are going to be very unhappy.”

Digital reception is more affected by hills, trees, buildings and other interference than analog has been. An analog TV picture degrades gradually, getting more snow or ghosting as a signal becomes weaker.

But digital TV is subject to the “cliff effect” — the picture is excellent until the signal gets weak and the picture suddenly drops out.

The number of sets that the Centris study projects will fail varies from city to city, based largely on the landscape. In Las Vegas, which lies in a flat basin, the study estimates that 2.5 percent of over-the-air TVs would lose at lease one of five major networks. In Philadelphia, which has more hills, 5 percent of over-the-air TVs would lose reception, while in St. Louis, 10 percent would lose reception.

Centris says, based on the F.C.C.’s data, a digital signal would travel 60 to 75 miles in those three cities. However, Centris says its own model showed that the signals would degrade at 35 miles.

Whether a TV gets a strong digital signal may depend on seemingly minor impediments, said David Klein, executive vice president of Centris. “Are there big trees in your area? Is there a big retaining wall next your house?” he said. “It’s not a matter of, ‘is reception good in your neighborhood’; it’s a matter of, ‘can I get the signal in the bedroom?’ ”

Centris also estimated that of the 117 million TVs not connected to cable or satellite, up to 80 percent have set-top rabbit-ear antennas that may not be able to pull in an adequate digital signal. Many of those sets will require a better antenna or a cable or satellite connection to do so.

Electronics manufacturers say the quality of the TV’s receiver and converter will play a role.

Converter Boxes Now on Sale at Wal*Mart

February 12, 2008

Wal*Mart announced this week that it has begun selling DTV converter boxes, in preparation of the analog signal shutoff a year from now. The release of the boxes, which were made by Magnavox, was timed to coincide with the release of $40 coupons from the government, which is scheduled for next week.

The boxes will be available at 3,400 Wal*Mart stores nationwide. The $40 coupons will function as gift cards at the stores, Wal*Mart said.

“Due to our many locations, we expect the majority of customers will come to us for making their digital transition plan, both for convenience and price,” company senior vice president Gary Severson said in a company statement.

Netflix Goes Blu-ray

BEVERLY HILLS, Calif. (ASSOCIATED PRESS) -- Netflix Inc., the online movie rental company, said Monday it is switching exclusively to the Blu-ray format for high-definition DVDs, following four major movie studios in selecting the Sony technology over one pushed by Toshiba Corp.

Netflix has stocked both formats since they became available in 2006, but said the decision of four of the six major studios to issue films only in Blu-ray format made it likely that the Sony format will prevail.

"From the Netflix perspective, focusing on one format will enable us to create the best experience for subscribers," the company said, adding that not many customers order high-def DVDs.

The company will continue renting movies in the rival HD DVD format limited to stock on hand, according to a Netflix spokesperson. It will no longer purchase new HD DVD titles.

Last summer, rival Blockbuster Inc., made the decision to only offer Blu-ray titles at its company-owned rental stores.

Warner Home Video last month said beginning June 1 it will release HD titles exclusively in the Blu-ray format, joining Sony Pictures, 20th Century Fox, Lionsgate and Walt Disney Studios Home Entertainment Divisions. The two remaining majors, Paramount Home Entertainment and Universal Studios Home Entertainment, publish exclusively in HD DVD.

Many consumers have held off on buying a high-def DVD player until the dominant format is decided.

A report from the NPD Group, based on a sample of 6,000 frequent DVD buyers, found that fewer than 10% of respondents said they would buy either a stand alone Blu-ray or HD DVD player in the next six months.

Meanwhile, Best Buy last week said that it will now “recommend” Blu-ray to its customers, although the retail giant stopped short of going exclusive. This means that starting in March, Best Buy will “showcase” Blu-ray products, while still continuing to carry players and movies in the HD DVD format.

Best Buy said in a statement that because consumers have told them to “help lead the way,” Best Buy has decided to designate Blu-ray as “the preferred format.”

VP of marketing for Toshiba Corp. of America, Jodi Sally said Best Buy’s decision and Netflix’s move to focus on Blu-ray rentals would result in Toshiba assessing market conditions.

She said Toshiba was not scaling back HD DVD marketing efforts but instead was analyzing market conditions. “It’s unfortunate to see a valued partner like Best Buy make the decision to push consumers toward Blu-ray,” Sally said.

Strike Over - Writers and Producers Reach Tentative Agreement

The Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers Feb. 9 said they reached a tentative contract settlement that if ratified could end the three-month old entertainment strike.

The agreement would be effective through May 1, 2011, and gives minimum compensation amounts for professionally created and repurposed new media content, including through the Internet and cellular technology, among other provisions long sought by the WGA.

Guild members are expected to vote on the contract Feb. 12 in New York and Los Angeles, and could return to work on Feb. 13.

The settlement included no change to the current DVD residual rate, which pays 3% for TV and 3.6% for Movies of the distributor’s gross receipts.

Patric Verrone, president of WGA, West, and Michael Winship, president WGA, East, urged writers to accept the agreement, calling it the best deal in 30 years in a letter to members.

“We believe that continuing to strike now will not bring sufficient gains to outweigh the potential risks and that the time has come to accept this contract and settle the strike,” Verrone and Winship said in a statement. “Much has been achieved, and while this agreement is neither perfect nor perhaps all that we deserve for the countless hours of hard work and sacrifice, our strike has been a success.”

Settlement Details

WGA jurisdiction includes derivatives of guild-covered content and/or if the Web-based content’s budget meets any of three thresholds, including $15,000 per minute; $300,000 per program or $500,000 per series.

Minimum new media derivative compensation for writers of dramatic programming includes $618 for up to two minutes, plus $309 for each additional minute. Comedy, variety and daytime serials receive $360 for two minutes, plus $180 for each additional minute. Other derivative programming receives $309 for up to two-minutes, plus $155 for each additional minute.

Creators of Web-based content that becomes a TV series or feature film are protected, including copyrights and right to sell and license the material.

Residuals for material re-purposed online include 1.2% of distributor’s gross for download rentals (streaming), 0.36% of distributor’s gross for electronic sellthrough of the first 100,000 episodic TV downloads and 50,000 feature film units. Above those figures, TV downloads pay 0.7% of distributor’s gross and 0.65% for movies.

Ad-supported streaming of theatrical movies produced after July 1, 1971 pay 1.2% of distributor’s gross. Ad-supported library TV content produced after 1977 pay 2% of distributor’s gross.

New ad-supported TV streams pay 2% of the distributor’s gross.

All streamed content is subject to a 17-day window (24 days for first season TV programs, one-off TV shows and movies-of-the week) contiguous to the initial TV broadcast whereby writers receive no residuals.

In the first and second years of the contract following the initial window, a 3% residual base fee for prime time TV network programming is paid for a period up to 52 weeks. All other TV programming receives 3% in the first two years of the contract, 3.5% in the third year.

Hour programs receive $654 per period in the first year and $677 in the second year. Half-hour programs receive $360 in the first year and $373 in the second. In the third year, 2% of the distributor’s gross revenue is applied following the initial window.

2007 Nominees

Best Picture

"Atonement"

"Juno"

"Michael Clayton"

"No Country for Old Men"

"There Will Be Blood"

Best Actor

George Clooney (Michael Clayton)

Johnny Depp (Sweeney Todd The Demon Barber of Fleet Street)

Daniel Day-Lewis (There Will Be Blood)

Tommy Lee Jones (In the Valley of Elah)

Viggo Mortensen (Eastern Promises)

Best Actress

Cate Blanchett (Elizabeth: The Golden Age)

Julie Christie (Away From Her)

Marion Cotillard (La Vie en Rose)

Laura Linney (The Savages)

Ellen Page (Juno)

Best Supporting Actor

Casey Affleck (The Assassination of Jesse James by the Coward Robert Ford)

Javier Bardem (No Country for Old Men)

Philip Seymour Hoffman (Charlie Wilson's War)

Hal Holbrook (Into the Wild)

Tom Wilkinson (Michael Clayton)

Best Supporting Actress

Cate Blanchett (I'm Not There)

Ruby Dee (American Gangster)

Saoirse Ronan (Atonement)

Amy Ryan (Gone Baby Gone)

Tilda Swinton (Michael Clayton)

Best Director

Julian Schnabel (The Diving Bell and the Butterfly)

Jason Reitman (Juno)

Tony Gilroy (Michael Clayton)

Joel Coen & Ethan Coen (No Country for Old Men)

Paul Thomas Anderson (There Will Be Blood)

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