Dvd Sales

Cost-cutting and robust holiday-season sales of "Transformers: Revenge of the Fallen" and "Star Trek" DVDs propelled Viacom Inc. to a fourfold increase in fourth-quarter profit. Viacom reported Thursday that it earned $694 million, or $1.14 a share, compared with $172 million, or 28 cents, a year earlier. The jump in earnings was, in large part, because of a $454-million restructuring charge taken in the period in 2008. Revenue, however, fell 3% to $4.1 billion for the quarter, reflecting continued weakness in the TV advertising market.

DreamWorks Animation, the Glendale studio behind the "Shrek" and"Kung Fu Panda" movies, saw its revenue jump 26% to $136.1 million in the first quarter. The company said it earned a profit of $9.1 million, or 11 cents a share, in the three months ended March 31, a 3% increase over the year-earlier period. The growth reflected home video and international ticket sales from the "Shrek" spinoff,"Puss in Boots,"which grossed $554 million worldwide since its release in October. Analysts polled by Thomson Reuters had estimated earnings of 9 cents a share and revenue of $134 million in the quarter.

Setting up opposing camps among the Hollywood studios over $1-per-night kiosk rentals, Paramount Pictures has agreed to provide its movies to Redbox on the same day they go on sale. The move comes soon after Warner Bros., Universal Pictures and 20th Century Fox all signed deals with Redbox to block rentals of DVDs until 28 days after they are released. The studios have argued that discount kiosk rentals hamper DVD sales and cut into home video revenue. However, Viacom Inc.'s Paramount views things differently.

Getting comedies onto the big screen has become a sobering business in Hollywood. Once one of the movie industry's most successful genres, with stars such as Eddie Murphy and Will Ferrell boasting $20-million paychecks, comedy is now among the most challenging propositions for the studios that bankroll them. The fact that they typically aren't popular overseas — where culturally specific humor can be difficult to translate — has become a larger obstacle in an increasingly global film business.

Netflix has attracted more than 20 million subscribers, more than 20,000 movies and television shows for its online service, and more than its share of headaches in Hollywood. There's one thing it has yet to attract: competition. Netflix is the only company that streams a large selection of movies and TV shows online for a monthly fee. That will probably change. Retail giants such as Wal-Mart Stores Inc., Amazon.com Inc., and Best Buy Co., Internet television provider Hulu, and satellite broadcaster Dish Network Corp.

The bottom may be falling out of the DVD market for Hollywood, but not at Netflix Inc. The DVD rental company set a record for subscriber growth -- blowing past the 10-million-customer mark -- and reported that first-quarter profit skyrocketed almost 70% from the same period a year earlier. Reed Hastings, chief executive of Netflix, attributed the growth to the online video service's "unlimited rental" deal, which allows movie junkies all-you-can-watch plans for the month.

Re "DVD Slump Scares Industry," May 19: I laughed out loud when Patrick Goldstein compared Hollywood executives to great athletes: "If they lose their confidence, they can't do their job well." It doesn't take genius or confidence to greenlight a movie like "Indiana Jones and the Kingdom of the Crystal Skull," when you have Spielberg and Harrison Ford attached to a film with a built-in audience. You could sneeze on 120 pages and shoot it -- which, come to think of it, looks about like they did. And therein lie the answer and solution to the problem of lagging DVD sales.

When Joy Papa of Silver Lake stopped by Fry's Electronics in Burbank last week, she did something movie executives wish consumers would do more often this year: buy a DVD. "Every time a new movie comes out that I like, I buy it even if I saw it in theaters," she said while clutching a copy of "Fast & Furious," which had just come out. The DVD business may be down, but it's not out -- at least for the biggest titles.

Sony Pictures Entertainment, grappling with slumping DVD sales and a worsening economy, plans to cut about 300 jobs, or about 4% of its workforce, through layoffs and by eliminating open positions, according to a person familiar with the situation. The cuts could come as early as next week, the person said. A Sony spokesman declined to comment. Sony is the latest Hollywood studio to lay off employees, following cutbacks at Warner Bros., Universal Pictures and Paramount Pictures.

Blockbuster Inc. will begin overhauling its more than 4,400 U.S. stores this month as the No. 1 video-rental chain tries to grab a bigger share of the $8.4-billion retail market for digital videodiscs. Blockbuster is counting on new layouts with color-coded DVD retail sections to generate more movie purchases by people who typically rent from the stores. Shares of Blockbuster fell 39 cents to $23.58 on the NYSE.

Amid a continuing industrywide slump in DVD sales, Walt Disney Studios issued layoff notices on Wednesday as part of a plan to shed about 200 jobs. The cuts include an undisclosed number of layoffs and dozens of jobs that have been unfilled, primarily in the studio's home entertainment division in Burbank, said a person familiar with the matter who was not authorized to comment. The movie studio behind the current worldwide hit "Pirates of the Caribbean: On Stranger Tides," employs about 5,000 people globally.

Netflix has attracted more than 20 million subscribers, more than 20,000 movies and television shows for its online service, and more than its share of headaches in Hollywood. There's one thing it has yet to attract: competition. Netflix is the only company that streams a large selection of movies and TV shows online for a monthly fee. That will probably change. Retail giants such as Wal-Mart Stores Inc., Amazon.com Inc., and Best Buy Co., Internet television provider Hulu, and satellite broadcaster Dish Network Corp.

DreamWorks Animation had good news and a bigger dose of bad news in its fourth quarter, as strong DVD sales for "How to Train Your Dragon" were reported alongside a disappointing DVD release for "Shrek Forever After" and a weak box-office run for "Megamind. " The Glendale animation studio also took write-downs on its unsuccessful "Kung Fu Panda" virtual world and the national tour of its live stage show "Shrek the Musical. " DreamWorks released three movies in 2010, the most it has put out in a single year.

Amid calls from some on Wall Street to choke off the supply of newly released DVDs to discount movie rental services, Walt Disney Co. has quietly decided to hike its wholesale prices on new-release DVDs for Redbox and Netflix, according to people familiar with the matter. The move marks a subtle shift in Disney's relationship with Netflix and Redbox, one that stands in contrast with most of Hollywood's dealings with the two rental giants. Other studios have refused to supply DVDs to Netflix and Redbox until 28 days after they have been released out of concern that low-cost rentals will undercut DVD sales.

The pornography industry, like the rest of Hollywood, has been buffeted by the economic downturn, the falloff in DVD sales and a cornucopia of free content on the Internet. Still, for better or worse, the adult entertainment business remains alive and well in the San Fernando Valley, where thousands of films are shot every year in warehouses and private homes. One of the 10 busiest sites for on-location filming in Los Angeles last year was a two-story industrial building in Chatsworth operated by Penthouse Studios, a spinoff of the adult magazine.

To paraphrase Apollo 13 astronaut Jack Swigert, "Hollywood, we have a problem. " The industry that was supposed to be immune to economic downturns looks like it's going to have some re-entry problems as the economy begins to recover. Broad swaths of the entertainment business declined in 2010. DVD sales were off 13%. Music CD purchases plummeted 19%. Video game sales as well as concert and theater attendance also fell. Even the turnout for America's favorite pastimes ? baseball and NASCAR ?

Metro-Goldwyn-Mayer Inc. cut its first-quarter loss to $55.8 million, or 22 cents a share, from a year-earlier loss of $90.8 million, or 37 cents. Revenue climbed 25% to $395.2 million. The studio credited its film "Agent Cody Banks" and strong DVD sales. MGM was hurt last year by costly flops such as "Hart's War" and "Rollerball." Analyst David Miller of Sanders Morris Harris said MGM had relatively little at stake financially in films that did poorly in the first quarter.

Universal's video and DVD version of "How the Grinch Stole Christmas" has generated $145 million in sales, setting a holiday record for the studio. In its first six days, the movie sold 8.5 million copies, including 3 million DVDs, said Universal Studios, a division of Paris-based Vivendi Universal. The film, based on the children's classic by Dr. Seuss and starring comedian Jim Carrey, was the highest-grossing film last year, making $260 million in domestic ticket sales.

Consumers long ago switched their shopping habits to the Internet, so that now most don't hesitate to buy cameras, TVs, books, appliances, cars, clothing, even foreclosed homes online. There appears to be no product that shoppers don't prefer to buy with the click of a mouse. No product, that is, except movies. A strange thing has happened on the way to the digital revolution. For more than a decade, Internet movie downloads and streaming ? the two ways to watch movies online ?

Greg Carter spent the last three years scraping together $250,000 to write, direct and produce "A Gangland Love Story," a gritty, urban retelling of "Romeo and Juliet. " Since its DVD release in July, audiences have embraced it: More than 60,000 viewers have watched the movie on the Internet, giving the independent filmmaker a coveted public following. Unfortunately, winning an audience has come at a steep price. The viewers of Carter's film watched if from pirate movie sites and never paid for it. Carter figures the unauthorized viewing has cost him as much as $100,000 in lost revenue, dashing hope that he'll ever see a profit.