The dynamic DVD biz
September 21, 2007

SEPT. 21 | It’s safe to say that the future of home entertainment is front and center on Wall Street following media investor confabs on opposite coasts last week.

Top execs from Disney, News Corp., Time Warner, Viacom, DreamWorks Animation, Lionsgate and others talked about the state of thier businesses at the Goldman Sachs Communacopia Conference in New York and the Merrill Lynch Media & Entertainment Conference in Marina del Rey, Calif., with home entertainment developments playing a significant (newsy, if not large) part in their presentations.

Probably most covered in the business press was some format-war nastiness at Goldman Sachs in which Disney chief Bob Iger (subtly) and News Corp. head honcho Rupert Murdoch (not-so-subtly) threw barbs at Paramount and DreamWorks for their turn to HD DVD exclusively, while showing their true Blu confidence with comments like Iger’s “We believe it’s a no brainer that the industry should be behind Blu-ray” and Murdoch’s “The public is going to want Blu-ray. The public can tell the difference.”

“Paramount switched out the other day,” Murdoch was widely quoted as saying. “God knows why.” Of course he then went on to say that he did know why—it was for a combined $150 million payment from the HD DVD camp. (Which many publications reported breathlessly, like it was new news, perhaps because Murdoch said it.)

The next day, DWA CEO Jeffrey Katzenberg struck back, still without commenting on the $100 million his studio reportedly received, saying, “It’s somewhat disingenuous for other companies to suggest that they were not compensated for endorsing Blu-ray.”

There were some more pragmatic views. Time Warner CEO Dick Parsons advocating format neutrality and focus on growing high-def overall: “Our objective is not to take sides on the format but to do what we need to do to get maximum penetration.” Katzenberg on cautious optimism for standard DVD in Q4: “Probably the greatest lineup of films ever coming to home video” but there are risks of “cannibalization not unlike what we saw at the box office this summer.”

But in a perverse way, the sniping over high-def formats makes the home entertainment business sound pretty dynamic, and dynamism is a good thing.

Home entertainment at no time in the past decade has stopped being a dynamic business, but Wall Street has not always viewed it that way. But if the likes of Rupert Murdoch and Jeffrey Katzenberg are feuding over high-def formats, there’s gotta be some big money in them, right?

If not now, then next year, or the year after, in one format or two, but it’s important that the money men see importance in the evolution of the still-dynamic DVD business.

Posted by Marcy Magiera on September 21, 2007 | Comments (0)