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Sun, Sep 04, 2005 - Page 12 News List

Disney tackles a DVD dilemma

Mickey Mouse's new boss thinks it more profitable to release a movie's DVD at the same time as its theatrical release

AP , LOS ANGELES

In the US, studios are pressured by a box office slump and a DVD glut that has led to a sharp decline in sales for new releases that compete for shelf space with old TV show box sets and older hits.

New technology is adding to the competition as cable operators promote video-on-demand services and phone companies, such as SBC and Verizon, are creating high-speed Internet networks that will make on-demand viewing even easier.

Advances in wireless are also challenging old business models. In Europe, Sony Pictures has released a full-length version of Spider-Man II for viewing on a cell phone.

For some industry players, simultaneously releasing a movie in theaters and on DVD makes perfect sense.

"Most packaged entertainment -- books, CDs, games -- most all of these make their debut at retail," said Ted Sarandos, chief content officer of Netflix Inc., which rents DVDs by mail. "It isn't that radical a proposition that movies could follow that same path."

In April, 2929 Entertainment, which owns two television networks, a chain of movie theaters and film and television distribution companies, announced a partnership with Oscar-winning film director Steven Soderbergh to direct six films and release them simultaneously in theaters, on TV and on DVD.

Wagner, the company's co-owner, said under his model, theater owners share in the revenue made from distributing films on DVD and other media.

"We want the exhibitors to be a part of this because they should be and from my perspective, they always should have been," Wagner said.

Wagner also disputes the notion that people would stay away from theaters if they could watch the same movie at home.

Wagner and Cuban own the NBA's Dallas Mavericks, which still draws a crowd when games are broadcast on radio and TV.

"It didn't kill professional sports when it was available simultaneously on different mediums," he said. "They cross promote each other and they're all doing just fine."

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