Posts filed under “Film”
In my occasional travels in — and conversations with — Silicon Valley, I get to speak to some very smart, very observant people. Not company insiders, but savvy "insiders" of the Tech scene.
I recently mentioned that TiVo’s (OTC: TIVO) management seems to be all over the place, both philosophically and managerially (see Goodbye Tivo). Their business model is suffering, and despite having first mover advantage and the best product in the category, they don’t seem to be able to make a buck.
This is a shame, as TiVo is one of my very favorite toys, and I would be quite distraught if they went bye-bye. It works exceedingly well with my DISH.
In batting this around, we reached a few interesting conclusions: a) TiVo’s recent shifts are not random, and are probably in response to some longer term strategic shifts; 2) something significant was going on with the company.
What might that be?
Our best guess (and this is only a guess, with a smidgen of wishful thinking thrown in) is that TiVo is about to be bought. Their market cap is well under $1/2B, and so for a minor premium — wild guess: $750 million or $8 a share in stock — they get taken out; Sooner rather than later — probably over the next month or so.
A close friend who has no ties to the company thinks the firm that makes the most sense to grab them is Echostar (OTC: DISH).
Echostar competes with Direct TV, which used to use TiVo (you can even see the logo on their DVR page) but are now rolling out their own DVR. TiVo becomes a competitive feature for DISH in their wars with Direct TV, uses TiVo as an added feature for their Users, and of course could sell through to this base and monetize this much faster than TiVo has been able to do. Clearly, a premium sch as this would work well with Echostar’s large installed base.
TiVo, taken out by DISH. You read it here first . . .
UPDATE October 9, 2005 10:46am
Let’s nip this one in the bud, shall we?
5 6 7 factors are hurting theater attendance:
1) Social factors eroding theater environment (talking, cell phones, babies crying, etc.);
2) Sacrificing long term relationships with theater-goers for the increase in short term profitability (commercials, no ushers, etc.);
3) Higher quality experience elsewhere (Home theater);
4) Declining quality of mainstream movies;
5) Easily available Long Tail content alternatives (Netflix, Amazon);
7) Demographics: Aging babyboomers simply go out to movies less.
While content quality has indeed worsened over the years, it shouldn’t be the main concern this Summer: As of late, there have been a spate of movies which have been either well-reviewed (Batman Begins) or had good word-of-mouth (Wedding Crashers) or incredible special effects perfectly suited to the big screen (Revenge of the Sith or War of the Worlds).
So what else might be the source of declining theatrical fortunes?
Well, how about the movie theater-going experience itself? The adventure of heading to a cineplex is becoming a less and less pleasant form of entertainment. Many of the headaches involved have been painfully detailed by Bob Lefsetz’ readers (see their ordeals below).
Note that we are not even discussing content quality at this point.
Then there are the adverts. A recent L.A.Times article – Now playing: A glut of ads — points out that even studio executives were stunned by 15 minutes of commercials theatre goers had to endure after paying their 10 bucks:
"As head of production at New Line Cinema, Toby Emmerich is not your typical moviegoer. So when he wanted to see "War of the Worlds" the other night, his choice was between seeing the film in a theater with a tub of popcorn or watching it in a screening room at Jim Carrey’s house, with a private chef handling the culinary options. Despite this seemingly loaded deck, Emmerich opted for a real theater.
"I love seeing a movie with a big crowd," he says. "But I had no idea how many obnoxious ads I’d have to endure — it really drove me crazy. After sitting through about 15 minutes of ads, I turned to my wife and said, ‘Maybe we should’ve gone to Jim Carrey’s house after all.’ "
When DreamWorks marketing chief Terry Press took her young twins to see "Robots" this year, she said, "My own children turned to me and said, ‘Mommy, there are too many commercials!’ Now, when the lights go halfway down, I’m filled with dread. The whole uniqueness of the moviegoing experience is being eroded by all the endless ads." (emphasis added)
So while the industry laments piracy, consider if you will why going to the theatre has become so much less enjoyable than watching DVD films on your own big screen in the comfort of your home theatre.
The theatres have adapted Radio’s disasterous Hamburger Helper approach: Short term increases in profitability in exchange for alienating your core audience, who eventually seek out a more enjoyable substitute. Quite frankly, I’m astonished the film industry has (contractually)
allowed theatre owners to degrade their copyright protected product by
diminishing the experience so dramatically.
As Radio has so painfully learned, the end result is a big fat Buh-bye!
To a large degree, this is a zero sum game: The theatre chains losses are Best Buys’ gain; Is it any surprise that high quality home sound systems and large screen TV sales have gone through a ginormous growth spurt over the past 5 years? Even as the lowest common denominator productions falter, Netflix (and its rivals) allow home theater owners to enjoy a Long Tail orgy of DVD content.
Yo, theatre owners, when a segment of retail electronics called HOME THEATRE explodes in sales, that is your wake up call. You seem to have been oblivous, and missed the bell ringing.
Good luck getting the toothepaste back in the tube!
UPDATE: July 25, 2005 7:37pm
At Slate, Edward Jay Epstein explains the numbers behind decreased attendance on increased revenue. Fascinating stuff . . .
UPDATE II: August 30, 2005 12:07pm
A weekend NYT article, titled Summer Fading, Hollywood Sees Fizzle quotes an exec as blaming the quality of flicks:
"Part of this is the fact that the movies may not have lived up to the
expectations of the audience, not just in this year, but in years prior," said
Michael Lynton, chairman of Sony Pictures Entertainment, which had some flops
this summer, including the science fiction action movie "Stealth"
and the romantic comedy "Bewitched."
"Audiences have gotten smart to the marketing, and they can smell the good ones
from the bad ones at a distance."
Now Playing: A Glut Of Ads
The Big Picture
L. A. Times, July 12, 2005
June 5, 2005
(complete sourcing below)
Summer Fading, Hollywood Sees Fizzle
By SHARON WAXMAN
NYTimes, August 24, 2005