For Your Consideration: Low-Budget Blockbusters ... Toshiba Exec Reflects on HD DVD ... Theaters Evolve

- Low-budget blockbusters like 'Once' never happen ... until they do. (Movie industry insiders say it's always safer to bet on big budget releases with well-known stars.) Portfolio.com has an analysis of the economics of 'Once,' made for $150,000 and released in the US by Fox Searchlight. The financial returns thus far, Portfolio says, have hit about 10,000 percent. From the story:

After the film opened in the U.S., it grew slowly and steadily. Fox Searchlight had the best marketing that money can’t buy: word-of-mouth buzz and critical acclaim. While summer’s blockbusters came and went, Once stuck around theaters for an amazing 219 days—most of 2007—whereas Spider-Man and Pirates played for 112 and 133 days, respectively.

There's also a slideshow of the top ten movies from a return-on-investment perspective (mostly indies like 'Blair Witch' and 'Napoleon Dynamite,' but all three 'Lord of the Rings' films also make the list.)

- Toshiba's CEO talks to the Wall Street Journal about the impact to the company of losing the high-def format war to Sony and Blu-ray. Atsutoshi Nishida says:

I didn't think we stood a chance after Warner left us because it meant HD DVD would have just 20% to 30% of software market share. One has to take calculated risks in business, but it's also important to switch gears immediately if you think your decision was wrong. We were doing this to win, and if we weren't going to win then we had to pull out, especially since consumers were already asking for a single standard.

- The Detroit News writes about how movie theaters are evolving -- with a big focus on 3-D, live concerts, and videogame tournaments. (Long interviewed me for the piece, and includes a short quote.)Fox

HD DVD's Last Ditch Effort?

Today's news that Paramount and DreamWorks Animation will release movies in HD DVD only feels like a last-ditch effort to give HD DVD a leg up over Blu-ray...especially because financial incentives are involved, and especially because the exclusive agreement could be for as short as a year.

From Brooks Barnes' NY Times coverage:

...Paramount and DreamWorks Animation together will receive about $150 million in financial incentives for their commitment to HD DVD, according to two Viacom executives with knowledge of the deal but who asked not to be identified.

The incentives will come in a combination of cash and promotional guarantees. Toshiba, for instance, will use the release of “Shrek the Third” as part of an HD DVD marketing campaign.

In the Wall Street Journal, Sarah McBride writes:

The exclusive could be for as little as a year, according to two people familiar with the situation.

The studios won undisclosed financial incentives for exclusive commitments to release high-definition movies onto HD DVD only. A person familiar with the situation said the incentives included both cash payments and soft incentives such as marketing promotions.

...Prices for hardware to play each of the dueling formats are dropping. Toshiba HD DVD players are now available for less than $300, compared with about $449 for the least-expensive Blu-ray player. The combination of the less expensive players and the hot titles that will be available on HD DVD could help steer many consumers in that direction over the key holiday sales period.

Variety notes that as recently as March, DreamWorks Animation CEO Jeffrey Katzenberg had been non-plussed by high-def discs in general. Daniel Frankel and Ben Fritz write:

"Blu-Ray and HD DVD are a niche business," [Katzenberg] said in March on a conference call with Wall Street analysts. "They're not going to become the next platform. I think for the general consumer, there is not a big enough delta between the standard DVD in terms of where it is today and the next generation."

That's a far cry from the statement he put out on Monday: "We believe the combination of this year's low-priced HD DVD players and the commitment to release a significant number of hit titles in the fall makes HD DVD the best way to view movies at home."