Step-4: TRANSITION TO TWO-PRONGED BUSINESS MODEL (
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Posted On: 12/05/2018 11:36:04 AM
Re: speckulater #4990
Step-4: TRANSITION TO TWO-PRONGED BUSINESS MODEL (MyFlix, Major-Films)
The Home DVD sales and marketplace has been rapidly evolving.
The older business model involved DVD replication (Home Video) of lower-tier Independent Releases with limited theatrical release. At any given time, significant amounts of capital are being captured into fulfilling inventory for retailers, spread over four-to-five months of a multi-title release slate. It's expensive to be in the physical DVD and BluRay distribution business...
With management having determined that the lower-end titles are cash-intensive, time-consuming and deliver only a very marginal revenue upside. The company is basically moving AWAY from a cash-intensive model, and into a "fast-cash flow" delivery model. The company's cash flow IMPROVES under such a digital-streaming distribution model.
Additionally, the assignment of video rights for major films to the major studio partner (Sony Distribution Deal) relieves HHSE of the need for substantial video staff and manufacturing funds.
HHSE management feels that the company's new business model of higher profile films and MyFlix Streaming will result in far fewer producer disputes... as these new initiatives represent the dynamic forefront of the film distribution marketplace, as opposed to the lower-end of independent productions. It has been HHSE's experience that low-budgeted films are harder to sell than higher-profile releases... and that the program suppliers tend to be extremely high-maintenance in their unrealistic expectations (which is why some of the poorer-performing titles sometimes end up in litigation).
HHSE
The Home DVD sales and marketplace has been rapidly evolving.
The older business model involved DVD replication (Home Video) of lower-tier Independent Releases with limited theatrical release. At any given time, significant amounts of capital are being captured into fulfilling inventory for retailers, spread over four-to-five months of a multi-title release slate. It's expensive to be in the physical DVD and BluRay distribution business...
With management having determined that the lower-end titles are cash-intensive, time-consuming and deliver only a very marginal revenue upside. The company is basically moving AWAY from a cash-intensive model, and into a "fast-cash flow" delivery model. The company's cash flow IMPROVES under such a digital-streaming distribution model.
Additionally, the assignment of video rights for major films to the major studio partner (Sony Distribution Deal) relieves HHSE of the need for substantial video staff and manufacturing funds.
HHSE management feels that the company's new business model of higher profile films and MyFlix Streaming will result in far fewer producer disputes... as these new initiatives represent the dynamic forefront of the film distribution marketplace, as opposed to the lower-end of independent productions. It has been HHSE's experience that low-budgeted films are harder to sell than higher-profile releases... and that the program suppliers tend to be extremely high-maintenance in their unrealistic expectations (which is why some of the poorer-performing titles sometimes end up in litigation).
HHSE
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