Sony, 20th Century Fox pact for DVD, Blu-ray buyers

With Brazil’s middle and upper classes growing, Sony Pictures and 20th Century Fox have paired up to go after a new kind of consumer in the massive territory: DVD and Blu-ray buyers.

The homevideo divisions at the two studios have formed Fox-Sony Pictures Home Entertainment do Brasil (FSPHEB) as a joint venture that will launch during the first quarter of 2012 and manage the marketing, sales and distribution of each company’s DVD and Blu-ray releases in Brazil.

Jefferson Pugsley, most recently VP and managing director of Paramount Home Entertainment Brazil, has been tapped to oversee the venture as general manager.

He will report to a board of di rectors made up of reps from Sony and Fox.

For years, disc sales in the region were stagnant as more Brazilians opted to rent rather than buy. But Hollywood has started to see a shift toward purchases in the region as economic growth has put more coin in consumers’ pockets over the past decade . There are 194 million people living in Brazil.

“For the last 10 years, we’ve seen an emergent middle and upper class in Brazil who are devoting an increasing amount of interest to entertainment and technology, similar to the habits we are witnessing in other countries,” said Gary Ferguson, senior VP of emerging markets at 20th Century Fox Home Entertainment. “Combining expertise from Fox and SPHE under one roof positions our new organization to efficiently meet consumer demand for high-definition home entertainment viewing experiences in the living room.”

But to encourage more sales, Sony and Fox realized retailers needed help in educating their customers on the benefits of owning movies and building collections.

“The retail infrastructures are still underdeveloped and will require Hollywood’s support to grow that market,” Keith Feldman, prexy of Twentieth Century Fox Home Entertainment Intl., told Variety .

By pairing up, the studios wanted to “create some urgency to shape the marketplace in Brazil,” especially as there’s been “tremendous screen growth,” with more HDTVs winding up in consumers’ homes, Feldman said. “We’re seeing the same behavior in disc consumption and want to ride that wave.”

It will only continue to grow with the 2014 World Cup and 2016 Summer Olympic Games taking place in Brazil.

“Brazilian consumers are trading up to a higher standard in home entertainment with the purchase of high definition televisions and Blu-ray players,” said T. Paul Miller, Sony Picture Home Entertainment’s senior VP of international. The two sporting events “will drive not only economic growth but growth in the home entertainment marketplace through the expansion of HDTVs into a whole new set of homes.”

Creating a single unit run by two studios was considered necessary to tackle the territory. “It is such a huge landmass that (with FSPHEB) you are able to take advantage of distribution efficiencies and gives you critical mass for the local consumer,” Miller said.

The division plans to release one new title every month, with “Alvin and the Chipmunks: Chipwrecked,” Cameron Crowe’s “We Bought a Zoo” and “The Adventures of Tin Tin” the first to get a push in Brazil.

More studios could become part of the FSPHEB, but “it tends to get cumbersome when you deal with more than one studio,” Miller said.

Added Feldman, “We want to get this thing right and demonstrate it works in the marketplace and go from there.”

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