Criterion and Sony

[Highway 61]

How does this affect Criterion's relationship with the other majors? I can't imagine Paramount and Fox are thrilled that Sony is now distributing their films.

[ianungstad]

Good question.

[Tribe]

How does this affect Criterion's relationship with the other majors? I can't imagine Paramount and Fox are thrilled that Sony is now distributing their films.

I don't understand how this would impact any relationship. Fox and Paramount are already competing with Criterion in the marketplace, I don't see how this would change that in any way. Why do you think it makes a difference?

[captveg]

Hmmm....

From what I can tell this is essentially Sony DADC doing the physical disc manufacturing, so that shouldn't have any affect on Criterion or Image on the authoring side of things. but merely replication. The flip side is the distribution of catalog titles by Image, which could lead to some more Sony owned catalog titles in the Criterion Collection.

Otherwise this has little impact, IMO. Sony, for example, already replicates (and even does some authoring) for Starz, but Starz makes all the key decisions with their catalog. When it comes to Hollywood, there are basically four major authoring facilities: Sony, Technicolor, Deluxe, GDMX. When it comes to replication, there are also four: Sony DADC, Deluxe, Technicolor, Cinram.

[Jeff]

How does this affect Criterion's relationship with the other majors? I can't imagine Paramount and Fox are thrilled that Sony is now distributing their films.

I don't understand how this would impact any relationship. Fox and Paramount are already competing with Criterion in the marketplace, I don't see how this would change that in any way. Why do you think it makes a difference?

I can see how it would bother other studios. Criterion is just a boutique home video producer that often works with the majors, whereas all the major studios compete directly with each other in all venues across the entertainment industry (music, theatrical, television, etc.). They are long-time rivals, whereas I don't think anyone views Criterion as anything but a potential partner for deep catalog product. Currently, distribution of Criterion product accounts for between 20% and 30% of Image's annual revenue. That revenue will now, presumably, be going to Sony. I can see how, for example, Paramount might be irked that the folks at Sony are getting a cut of every copy of Days of Heaven that sells.

[ianungstad]

How does this affect Criterion's relationship with the other majors? I can't imagine Paramount and Fox are thrilled that Sony is now distributing their films.

I don't understand how this would impact any relationship. Fox and Paramount are already competing with Criterion in the marketplace, I don't see how this would change that in any way. Why do you think it makes a difference?

I can see how it would bother other studios. Criterion is just a boutique home video producer that often works with the majors, whereas all the major studios compete directly with each other in all venues across the entertainment industry (music, theatrical, television, etc.). They are long-time rivals, whereas I don't think anyone views Criterion as anything but a potential partner for deep catalog product. Currently, distribution of Criterion product accounts for between 20% and 30% of Image's annual revenue. That revenue will now, presumably, be going to Sony. I can see how, for example, Paramount might be irked that the folks at Sony are getting a cut of every copy of Days of Heaven that sells.

What is the average markup for distribution? I would guess 25-50%?!? If I was Paramount, I would be especially irked that Sony is probably making substantially more off a release of Days of Heaven than Paramount is!

[captveg]

Sony DAC has authored many Paramount Blu-rays, so it's not like Paramount has never given Sony a cut before....

[ianungstad]

Well at any rate, now we know how Criterion managed to land that BBS box with all the high profile catalog titles. I'm sure we'll see lots of similar kinds of arrangements. Wouldn't surprise me if this enables Criterion to get a hold of other high profile titles like Taxi Driver.

Image/Criterion absorb all the production costs, Sony gets licensing, royalties, distribution and production fees.

Sounds like a good deal!

[swo17]

I totally called this shit.

[Jeff]

Possibilities are endless, and Taxi Driver with the Criterion commentary from somebody seems more likely than ever. Sony's got a home video output deal with Apparition. Perhaps this leads to eventual Criterion releases of Tree of Life and Bright Star.

[beamish13]

Does Sony continue to own the distribution rights to Neil Jordan's debut ANGEL (DANNY BOY)?

[shiftyeyes]

I hope this doesn't mean Criterion's discs will have all that Sony legalese that plagues their releases (and the releases of all the other majors as well).

[Tom Hagen]

Possibilities are endless, and Taxi Driver with the Criterion commentary from somebody seems more likely than ever. Sony's got a home video output deal with Apparition. Perhaps this leads to eventual Criterion releases of Tree of Life and Bright Star.

That assumes an actual release of the Malick title first!

[Perkins Cobb]

Is this rather vague announcement of a Sony/Image deal the death knell for the trickle of classic Columbia releases we've been getting? I guess it could go the other way, too, but I'm not optimistic about anything DVD these days.

[HarryLong]

which has slowly re-emerged from near bankruptcy to near profitability

Gotta love that phrase.

[Perkins Cobb]

which has slowly re-emerged from near bankruptcy to near profitability

Gotta love that phrase.

AKA "dead cat bounce."

[ianungstad]

The fine print for those interested:

On August 23, 2010, Image Entertainment, Inc. (or the Company) signed a Distribution Services and License Agreement with Sony Pictures Home Entertainment Inc. (or SPHE), to act as exclusive manufacturer to meet the Company's DVD requirements, including Blu-ray Disc high-definition format, and to provide related distribution and other logistics services in exchange for certain fees. The Company received an interest-free $2.5 million advance against future replication from SPHE and an $750,000 non-recoupable advance. All outstanding amounts under the advance are subordinated to all obligations outstanding to Wells Fargo Capital Finance (or Wells Fargo) under the Company's Loan and Security Agreement, as amended. Until the advance is repaid, SPHE will have a security interest in all the Company's assets in second position behind Wells Fargo. Within the first year of the SPHE agreement, the un-recouped portion of both the recoupable and unrecoupable advances are fully refundable to SPHE upon termination under the terms and conditions of the SPHE agreement. After the first year, only the unrecouped portion of the recoupable advance is refundable.

I don't really understand why Sony is paying Image $2.5 million? Is that like a signing bonus or something?

[Tribe]

The fine print for those interested:

On August 23, 2010, Image Entertainment, Inc. (or the Company) signed a Distribution Services and License Agreement with Sony Pictures Home Entertainment Inc. (or SPHE), to act as exclusive manufacturer to meet the Company's DVD requirements, including Blu-ray Disc high-definition format, and to provide related distribution and other logistics services in exchange for certain fees. The Company received an interest-free $2.5 million advance against future replication from SPHE and an $750,000 non-recoupable advance. All outstanding amounts under the advance are subordinated to all obligations outstanding to Wells Fargo Capital Finance (or Wells Fargo) under the Company's Loan and Security Agreement, as amended. Until the advance is repaid, SPHE will have a security interest in all the Company's assets in second position behind Wells Fargo. Within the first year of the SPHE agreement, the un-recouped portion of both the recoupable and unrecoupable advances are fully refundable to SPHE upon termination under the terms and conditions of the SPHE agreement. After the first year, only the unrecouped portion of the recoupable advance is refundable.

I don't really understand why Sony is paying Image $2.5 million? Is that like a signing bonus or something?

It's an advance...not a gift. In this case, an interest free loan.

[Buttery Jeb]

The first Sony releases are up on the Image website, slated for December 7th. They all seem to be budget DVD releases thus far.

The titles currently scheduled are:

"About Last Night..."
"Against All Odds"
"Awakenings"
"Blind Date"
"The Deep"
"The Fisher King" (!?!)
"Jagged Edge"
"Johnny Mnemonic"
"Short Circuit 2"
"St. Elmo's Fire"

-BJ

[ianungstad]

Well hopefully they let Criterion release special editions of The Fisher King and Adaptation. Nothing else on that list is all that exciting to me.

[Jeff]

This may very well end up having nothing to do with Criterion at all. Universal released a lot of their titles through Image in the early days of DVD. New Line did some too. This may just be a way for Sony to cut down on the amount of catalog product they have to manage.

[captveg]

Jeff is probably on the money. Especially with a Sony MOD program announcement seemingly imminent if those deepdiscount.com listings are any indication.

[Arthur House]

Just went over the first wave of the Sony MOD list @ Deep Discount Seeing as both The Pumpkin Eater and Mickey One are on there, I wonder what other "distinct possibilities" for Criterion will end up in that line instead. Something tells me Truffaut's Such A Gorgeous Kid Like Me is one of them.

[brendanjc]

I'm not sure if the intention of this thread was for the first post to stay up-to-date or not, but there are a few things that have been released subsequently that are probably no longer possibilities (for example, Sony themselves are releasing an Ishtar Blu-ray).

One film I was thinking about today that doesn't look to have been brought up yet is 2046. The current DVD is fine and has a decent set of extras, but Wong Kar Wai's film would have a natural home in the collection. If it were released today Sony would almost certainly give it a day-and-date Blu release like most of their other art-house films, but as a catalogue title who knows if or when they'll ever get back to it. I'm pretty sure this is wishful thinking on my part for now, though, since unlike Crumb the Sony DVD is still in print.

[Jeff]

I'm not sure if the intention of this thread was for the first post to stay up-to-date or not, but there are a few things that have been released subsequently that are probably no longer possibilities (for example, Sony themselves are releasing an Ishtar Blu-ray).

Nah. That was just my random speculation when we heard there were more titles coming. They turned out to be fewer and farther between than I anticipated. I can't think of anything that we got from Sony other than Bottle Rocket, Repulsion, Crumb and the BBS set, and I'm pretty sure those last two weren't part of the original plan. Most of those titles from my first post will probably never happen, and with the Sony titles coming so slowly, I'm not really interested in trying to keep it current. Feel free to continue speculating randomly though!