Paramount Pictures has found a cheaper way to monetize older titles in its film library: have Warner Bros. pump out the DVDs and Blu-rays.
The studios announced a three-year pact on Thursday that will have WB handle the distribution of 600 catalog titles on all homevid formats for Par in return for the rights to offer those movies through online streaming and discovery service Flixster.
Films like “Terms of Endearment,” “Ferris Bueller’s Day Off” and “Airplane!” will be part of the deal that starts in January, with UltraViolet versions of those films also available through Flixster.
Par will receive licensing fees from WB and benefit financially from Flixster, depending on demand for its films. Par also will retain all digital rights for its titles, including electronic sell-through, video-on-demand and subscription VOD.
Pact won’t include 100 pics that are still popular sellers for Par including the “Transformers,” “Star Trek” and “Indiana Jones” franchises, but Warner will gain access to select new titles after they’ve been available for 26 weeks.
Deal is clearly a reaction to homevid titles generating much of their coin during the first four months of release, and studios looking for ways to cut back on overhead costs by not producing as many physical discs for retailers that will just sit on store shelves.
“We are bullish on this deal as it firmly supports innovation in a critical aspect of our business, while at the same time it leverages our collective strengths and assets to maximize profits in the present market,” said Dennis Maguire, president of Paramount Home Media Distribution. “Flixster provides access to the leading movie discovery application that will promote digital content ownership and aid in expanding our digital business. At the same time, on the physical side, this agreement enables us to manage our profitability in a time of change in the marketplace and to focus more resources on new releases. With its strong infrastructure and track record, Warner will not only safeguard but enhance the long-term value of titles covered by this agreement.”
For years, Par has explored the possibility of merging its DVD and Blu-ray replication businesses with another studio. But in 2009, the company reupped a deal with Technicolor to handle the mastering, replication, packaging, distribution and returns processing, as well as freight management services in North America.
Technicolor also replicates and distribs discs for various territories for Warner Bros., Disney, DreamWorks Animation and Universal. The company has handled Paramount Home Entertainment’s business since 2002, and worked with Par to build a post-production facility on the Par lot in Hollywood.
In addition to providing Flixster with hundreds of new titles, Warner Bros. will handle on demand manufacturing rights for films in the deal.
Warner Bros., in 2009, opened its film vault to offer “made-to-order” DVDs or downloads to ring more coin out of decades-old films through WarnerArchive.com for $20 per pic. The WB film archive include 6,800 titles, but 2,000 have been released on DVD and Blu-ray to date.
Studio also will handle the UltraViolet version of the films for Par on a non-exclusive basis.
Warner Bros. has been eager to grow usage of Flixster since taking over the service when it bought parent Rotten Tomatoes last year.
It sees deals like the one with Paramount as a way to make the service more attractive to film fans and consumers.
“These Paramount catalog titles are the perfect complement to the Warner Bros. library; they will allow us to offer consumers new multi-feature film packages and debut many titles on Blu-ray for the first time,” said Ron Sanders, president, Warner Home Video. “The deal also adds a new energy to our Warner Archive Collection initiative, broadening the selection of rare titles available to consumers on demand.”
At the same time, the studio sees Flixster as a way to promote UltraViolet and its usage among consumers as they increasingly make the transition to digital platforms for entertainment.
“We’re delighted that movie fans will now be able to access Paramount titles through Flixster, further expanding the already robust library of UltraViolet-enabled content and making the continued transition to digital much smoother for the consumer,” said Thomas Gewecke, president, Warner Bros. Digital Distribution.
