Aaron Azpiazu's Business of Media Post

A new production company, Motown Motion Picture Studios, is expected to open in the Detroit area, housed in a plant that once made trucks for General Motors. The studio, which could be encouraged by strong tax incentives, stands to bring many direct and indirect jobs to the Detroit area. With a ton of luck and the aligning of the stars, Detroit could undergo a drastic change in its basic employment and economic structure. A lack of qualified crews, money, and good weather stand in between Motown and movie success, but maybe those empty, idle GM and Ford plants can be used to create something good for a change.

Though I ask you, would you rather be unemployed in LA or making movies in Detroit? I know what you're thinking, and no, there is no good answer.

http://www.freep.com/article/20090203/NEWS06/902030361/1008/NEWS/Film+studio+in+Pontiac+to+bring+jobs
http://www.riskybusinessblog.com/2009/02/general-motors-michigan-michael-moore-and-movies.html

After a dismal holiday DVD sales season, Disney's Robert Iger said the company would need to rethink how it markets and sells DVDs. DVD sales are the primary source of profit for most studios, but economic hardships and new viewing technologies are changing that fast, behooving studios to develop short and long term responses. To quote Iger, "When the economy rebounds, the normal we see is not necessarily going to be the normal we were used to."

For the short term, I vote they stop using that ridiculously tricky security tape they place all over the sides of the DVD cases. Look at the music industry (Napster had nothing on that pesky, useless jewel-case sealant). We'll increase sales while decreasing costs! What's that, Bob? Why yes I am looking for a job!

http://www.nytimes.com/2009/02/04/business/media/04disney.html?_r=1&ref=media

Starting in 2010, Disney will handle distribution and marketing for six DreamWorks films per year, collecting nine percent of their box office revenue. The deal also includes a loan to DreamWorks from Disney that is thought to be around $250 million. The new partnership will help cash-starved DreamWorks financially while increasing the number of films Disney releases, a number the mouse recently reduced. Universal and DreamWorks had been trying to reach a deal but talks fell through. Mickey signed onboard quickly thereafter.

http://www.hollywoodreporter.com/hr/content_display/finance/news/e3i9ab6ed8bb3577213babd28db1c412659

Indie studio Lionsgate announced they will be reducing their film slate in 2010 (from 16 to 12) in addition to spending $200 million less on production and marketing costs for those films. Equally as notable is the claim that the studio will be trying to "make safer bets in its choice of film genres and audience".

Companies must make changes if they are to survive, but mainstreaming content sounds like an unhealthy change for an indie studio. You can be a mainstream indie studio no problem, I just don't see the point in staying independent if you can't make the movies you want...

http://www.hollywoodreporter.com/hr/content_display/finance/news/e3ie7ae6a91eebf611f43f70387614a3da6

Lionsgate posted a $93.4 million loss in the third quarter, a loss attributed to both weak feature films and a double digit drop in home video sales. Surprisingly, theatrical revenue increased nine percent, and Lionsgate's television interests made decent money as well, but the 11% drop in home video (due to a lack of new titles and the newly-tanking DVD business) still made profits go south. A distribution deal signed with HIT Entertainment, a company known for nontheatrical preschool titles, did not help the Lionsgate bank statement either as the business for such titles began declining right after the deal took place. Moreover, Lionsgate bought the TV Guide Channel in cash ($255 million) in January before last quarter's numbers were known, presumably putting a large dent in the company's reserves.

http://www.variety.com/article/VR1117999860.html?categoryid=13&cs=1

This second link describes the plunge in share prices following the company's announcement that they lost big last quarter, and that they've lowered their box office expectations for 2009 substantially. The studio's stock tumbled to a six-year low.

http://www.variety.com/article/VR1117999954.html?categoryid=13&cs=1

USA Network has acquired the network rights for all Universal Pictures' films released in 2009. The deal made between the sister studios is expected to be worth $200 million, though the actual value will depend on domestic gross revenue (USA paying 12 percent of the B.O.). The deal includes Oscar nominated "Frost/Nixon" and "Milk" in addition to "Duplicity" with Julia Roberts and Clive Owen and other high-profile films starring A-listers such as Johnny Depp, Adam Sandler, Matt Damon, Meryl Streep and Vince Vaughn. The films will come to USA about 30 months after they hit theaters.

USA outbid several cablers including FX which has shown great interest in acquiring theatrical packages (including the purchasing of 15 Universal titles in 2008 for $100 million). NBC Universal is a winner in the deal since the conglomerate owns both USA Network and Universal Pictures.

http://www.variety.com/article/VR1117999803.html?categoryid=13&cs=1

The Berlin International Film Festival is teaching Hollywood that the "right" projects are still generating business despite the world's collision with the financial fiasco bus. That bus, however, is making it much more difficult for mid-budget projects with no major stars to securing financing. "The market for U.S. projects with a budget of $20 million - $45 million and international projects budgeted at $4 million - $8 million is shrinking," reports Variety. Toughening the mid-budget playing field are the facts that "Minimum guarentees are coming down, collecting monies owed is harder than ever in some territories, and the business model of financing through pre-sales is becoming increasingly outdated." It is assumed that high-profile films will always find a home, probably even more-so as the number of productions decreases, and niche market films will not see a large change in their worth either. Anything in the middle, however, is a less-than-safe bet, and as we've been learning as of late, sure-bet films are the new black.

http://www.variety.com/index.asp?layout=festivals&jump=story&id=1061&articleid=VR1117999982&cs=1

Despite the recession, the U.S. Box Office broke its Presidents Day weekend record by bringing in $223 million (vs $186.5 million in 2007). The combination of a Friday night, a Saturday Valentines Day and a Monday off from work and school proved to be money-making movie gold. Friday the 13th pulled in $45.2 million while He's Just Not That Into You reeled in $23.4 million, followed by Taken, Coraline and Confessions of a Shopaholic. The record breaking weekend only serves to add to the theory that recessions don't stop moviegoers (especially when there's a film that speaks to every one of them).

http://www.latimes.com/entertainment/news/business/la-fi-boxoffice17-2009feb17,0,1871973.story

The New York Times also posted this interactive thing (I don't know what to call it) that shows "The Ebb and Flow of Movies: Box Office Receipts 1986-2008". I personally found it interesting to see the change in April/May B.O. receipts that occurred after 1999. Prior to that year, the winter holiday and mid-summer blockbuster seasons were the most lucrative, but this interactive chart shows which films challenged this, and ultimately created a new high-potential, big-money release time.

http://www.nytimes.com/interactive/2008/02/23/movies/20080223_REVENUE_GRAPHIC.html

It turns out that 2008 was the year when "global revenues from digital media exceeded revenue generated by movie theaters and homevideo combined." Online and mobile channels are reported to have accounted for $90 billion in worldwide revenues, beating the $83.1 billion the global filmed entertainment market generated. Though the discussion of "if" digital will become the new film distribution format has seemed to change to "how" to switch to the that model, the move promises to be anything but easy. Broadband access in the U.S. is actually lower than many other countries (63.1% penetration in the U.S., vs South Korea (94%), Denmark, the Netherlands, Hong Kong, Australia, Norway and many others) limiting online distribution abilities, while content producers and VOD devices are going through a struggle that wreaks of Betamaxgate. Interestingly, however, countries such as France and the UK have embraced VOD broadband, even down to the government level.

http://www.variety.com/index.asp?layout=festivals&jump=features&id=2477&articleid=VR1117999758&cs=1

Connected to this discussion are Blu-ray players, which are projected to peak in 2013, and Blue-ray discs, which are rapidly growing in sales but are projected to start losing consumers in 2017. The culprit: VOD services and other technologies made available by a projected increase in in-home Broadband access.

http://www.videobusiness.com/article/CA6636897.html?industryid=47214

Universal Studios Home Entertainment, Summit Entertainment and 20th Century Fox Home Entertainment have decided to simultaneously release certain films on DVD and VOD platforms. A recent increase in VOD awareness and a strong decrease in DVD sales have led the studios to adopt the strategy. Universal will make Changeling and Flash of Genius available as a rental on iTunes (etc.) and cable VOD services the same day the DVD hits stores. Universal is shutting the window on films they believe will perform strongly as rentals. Summit has released all of its films simultaneously on DVD and VOD, but its Twilight will be one of the plan's first blockbusters. Warner is simultaneously releaseing the majority of its films and has echoed Summit's assertion that overall sales have not suffered, and may have benefited from the dual releasings. Lionsgate is beginning to shorten its DVD/VOD window while Sony is still in a 30+ day strategy.

http://www.videobusiness.com/article/CA6635301.html?industryid=47214

Netflix reporting an impressive 10 million subscribers, 600,000 of them freshly signed up since January 1 this year. The company is apparently making bank with its unlimited movies via the web platform...

http://www.msnbc.msn.com/id/29165579/

The Los Angeles Economic Development Corp is forecasting a modest improvement in industry jobs thanks to 3-D theater developments and gains in domestic and foreign box office revenues. We shouldn't be too excited with the small increase but 2009 has been decently good at the box office thus far. Production jobs in LA, however, aren't fairing so well thanks to the lack of tax incentives provided by California.

http://www.variety.com/article/VR1118000255.html?categoryid=18&cs=1

And lastly, PIRACY ! That headliner of a word that was so popular in the mid-00s has resurfaced but under better circumstances, as the Motion Picture Association's 10-week Operation ZoomOut is reported to have cracked down on illegally recorded videos in Asia, conducting 450 raids in 12 countries. Maybe that will stop the abysmal DVD sales in the U.S... HA.

http://www.videobusiness.com/article/CA6638328.html

In September 2007 Video Business reviewed a set-top box that plugs into a TV and offers thousands of movie titles at the click of a button. The movies can be rented or purchased and played at any time, but cannot be transported to a personal computer or similarly portable device. It's name: Vudu. This week (2/24/09) Vudu announced that they will offer permanent high definition downloads, a move that stands to challenge the expected Blu-ray boom. The new home entertainment device offers thousands of SD and 1,400 HD films currently, and has HD distribution deals with several independent studios. Vudu claims it offers HD-big-TV viewing experiences while distributing on a completely digital platform. Essentially it's Blu-ray Disc, minus the disc. It's reported that Vudu box prices were slashed by 50 percent this week in an effort to expand its reach.

2007 review: http://www.videobusiness.com/article/CA6480796.html?q=

Recent article: http://www.videobusiness.com/article/CA6639448.html

Projectionists project (it's what they do) that over 100 million Blu-ray discs will be bought in the U.S., Western Europe and Japan this year (80 mil in the U.S. alone). A decline in hardware prices is expected to help fuel consumers' adoption of the new technology, and the recession may even have the potential to encourage movie watchers to invest in the better home viewing experience, allowing them to cut back on more expensive leisure activities. In the U.S. Blu-ray unit sales jumped 320 percent last year, and the increase isn't expected to stop any time soon (as mentioned in previous posts). DVD sales have been plummeting lately, but the hope is that Blu-ray reinvigorates the home-disc market. My suggestion: Watch out for Vudu ! What's Vudu ? Scroll down.

http://www.videobusiness.com/article/CA6639274.html
http://www.videobusiness.com/article/CA6640033.html

Recently, studios have begun to include standard DVD copies in Blu-ray disc boxes. In some instances, digital copies (often included with standard DVDs) bump the platform count to three per package. The idea: Sell Blu-ray discs while not making old DVD players obsolete, and allowing consumers to enjoy their movie collection even when a Blu-ray player isn't near.

I think it's a great short-to-medium term plan. If the physical disc manages to remain relevant for the next year or two, the flexibility of the packaging could convince many consumers to make the Blu-ray jump.

http://www.videobusiness.com/article/CA6638855.html