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Image Entertainment Acquires HVE/Criterion Distribution Rights

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Image Entertainment Acquires HVE/Criterion Distribution Rights

Old 08-02-05, 11:10 AM
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Image Entertainment Acquires HVE/Criterion Distribution Rights

IMAGE GAINS CRITERION
As part of Home Vision acquisition
By Scott Hettrick 8/2/2005
http://www.dvdexclusive.com/article.asp?articleID=2298

AUG. 2 | DVD distributor Image Entertainment has acquired 19-year-old Chicago-based publisher/distributor Home Vision Entertainment.

The $8 million deal--one of the largest ever for Chatsworth, Calif.-based Image--also gives the former laserdisc company exclusive distribution rights to the prestigious Criterion Collection of esoteric, foreign and critically acclaimed movies on DVD.

For the past eight years, Image had split retail distribution of Criterion titles with Home Vision, which had a separate 50/50 joint venture with Criterion. With that arrangement, Image was never able to include Criterion titles in its overall national marketing efforts.

With this week's deal, Home Vision sells its 50% stake in the joint venture back to Criterion, freeing up Criterion to sign an exclusive output deal with Image for its 280 active catalog titles and three to four monthly new releases through 2010.

Image will now be able to mount full-fledged marketing campaigns for DVDs from Criterion, which is credited with creating the market for today's DVD bonus features and audio commentaries when the company first produced those features for laserdiscs in the '80s. Criterion licenses selected titles such as The Life Aquatic and Hoop Dreams from studios and producers, paying a royalty fee that is often comparable to the wholesale price realized by suppliers on the titles. The Criterion Collection contains approximately 280 active DVD titles in its library and typically releases three or four new titles each month.

The privately held Home Vision, which specializes in independent and foreign films on DVD such as the BBC production of The Chronicles of Narnia, the animated classic Animal Farm, Allegro Non Troppo and the George C. Scott starrer The Day of the Dolphin, had net revenue of $29 million last year on more than 130 active titles, according to the companies.

With the acquisition of all outstanding capital stock, Image is expected to eventually lay off about 40 of Home Vision's 45 employees and shutter Home Vision's Chicago headquarters and warehouse facility, consolidating those operations into its newly renovated facilities by the end of the year.

Home Vision's president and CEO, Adrianne Furniss, will remain as a consultant for three years, assisting with Image's consolidation and content acquisition efforts. Others will likely come from Home Vision's acquisition and production areas.

The Home Vision Entertainment name will remain as a label under which Image will continue to release new titles on a monthly basis.

Image execs believe the deal will allow the combined companies to realize at least $2 million in cost savings.

Image COO David Borshell said the company intends to use the deal as a springboard to make additional acquisitions, perhaps further expanding its re-entry into the fine arts and foreign film category as well as others.

"We have a physical and personnel infrastructure that we are in a great position to leverage," Borshell said.

"Now that the transaction has been concluded, we plan to intensify efforts to identify and pursue further opportunities," said Image president and CEO Martin Greenwald.

Criterion president Peter Becker said, "After well over a decade's experience with us and our brand, Image understands what The Criterion Collection means, both to our core customers and to the retailers who help us reach a wider audience."
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Old 08-02-05, 11:15 AM
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Interesting. And what does it mean? Was Criterion only worth 8 million? Is there other outside debt or something?
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Old 08-02-05, 11:20 AM
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I thought Image/Criterion/DVD Planet were already linked somehow.
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Old 08-02-05, 11:27 AM
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Originally Posted by johnglad
Interesting. And what does it mean? Was Criterion only worth 8 million? Is there other outside debt or something?
The headline is a bit misleading, in that the term "gains" seems to suggest that Image "acquired" Criterion. Image actually has only acquired HVE and also exclusive distribution rights for the Criterion catalog. Previously, Image had 50% of Criterion's distribution and HVE had the other 50%. As part of the whole deal, Criterion purchased back the 50% distribution share previously sold to HVE, and then Criterion and Image make a deal that gives exclusive distribution rights for the Criterion catalog to Image for $8MM. In other words, Image hasn't acquired Criterion; rather, they've contracted for 100% of Criterion's distribution (where previously they had 50%).
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Old 08-02-05, 11:45 AM
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If this makes both Criterion and Image stronger then I'm all for it.
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Old 08-02-05, 12:00 PM
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Criterion licenses selected titles such as The Life Aquatic and Hoop Dreams from studios and producers, paying a royalty fee that is often comparable to the wholesale price realized by suppliers on the titles.

Maybe that would finally get people to stop complaining about Criterion's pricing......but I doubt it.

--Ian
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Old 08-02-05, 12:10 PM
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If Image is going to distribute Criterion DVDs, that might be good news for us Columbia House devotees.
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Old 08-02-05, 12:21 PM
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Originally Posted by SFranke
If Image is going to distribute Criterion DVDs, that might be good news for us Columbia House devotees.
Image had already been distributing Criterion titles already, and have been for 15 years or so. Image simply consolidated exclusive distribution rights.

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Old 08-02-05, 12:27 PM
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I have mixed feelings about the move. Both good and bad ones:

Good:
1.Perhaps with Image's involvement more foreign titles will appear under the Criterion label ("joint-releases"??).
2.Even better publicity resulting in higher profits for Criterion resulting in even more acquisitions.
3.Mayve a long shot...but I always thought that Criterion should release at least a few substantial contemporary titles. Perhaps Criterion and Image can finally come up with an off-branch that will be dedicated only to contemporary foreign/independent cinema (Home Vision's sporadic attempts are clearly not enough).


Bad:
1. Involvement on Image's side that goes beyond distribution resulting in poor Criterion selections.
2.Cheap restructuring that would lead to watering of the Criterion name (quality, design)


As to Home Vision...I actually absolutely love their efforts. They, together with Criterion, are one of the few classy distributors that manage to bring quality foreign films to the US market...PLUS offering proper transfers (not PAL to NTSC ports). So, what will become of them now I have no idea... I wish they stay on the market.


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Old 08-02-05, 12:37 PM
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Originally Posted by pro-bassoonist
IBad:
1. Involvement on Image's side that goes beyond distribution resulting in poor Criterion selections.
2.Cheap restructuring that would lead to watering of the Criterion name (quality, design)
With 40 of the 45 employees loosing their jobs, I would say that the quality will go down.
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Old 08-02-05, 01:12 PM
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Yes, that's a misleading thread title. Image doesn't own Criterion.
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Old 08-02-05, 01:30 PM
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Originally Posted by Tracer
With 40 of the 45 employees loosing their jobs, I would say that the quality will go down.
Say what? Can you elaborate?
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Old 08-02-05, 01:32 PM
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Originally Posted by Tracer
With 40 of the 45 employees loosing their jobs, I would say that the quality will go down.
The article says Criterion bought back the distribution rights from HV, thereby "freeing up" Criterion to make this new deal. Criterion is very proud of their reputation and product, so I'm not sure they would willingly do something that would tarnish their name or product.
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Old 08-02-05, 01:34 PM
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Originally Posted by Tracer
With 40 of the 45 employees loosing their jobs, I would say that the quality will go down.
...on Home Vision's side...not Criterion's. Quite a difference there!

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Old 08-02-05, 01:41 PM
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Gary Tooze at dvdbeaver doesn't seem to think that this is good news:

Some (possibly) poor news has surfaced.

As of August 1st, circa 3 pm, Home Vision as we all knew it ceased to exist. Home Vision will now be a "specialty label" owned and operated by Image Entertainment. Image will be closing the Chicago location to "consolidate" Home Vision's label to their corporate offices in California.

As to what this means besides a lot of unemployed cinephiles and heartbreaks remains to be seen. Image is contractually obligated to release any future Home Vision titles that where already in the works or which had already been contracted. Image's "lenient" quality control will certainly play a part in any future "Home Vision" release so beware.

Criterion remains an independently owned company. This deal formalizes a 100% distribution deal between Image and Criterion lasting through the end of 2010. More to follow as we find out.
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Old 08-02-05, 01:42 PM
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All I can say is:

"Thank God HVE has already finished up the Zatoichi series."

I'll be watching how this develops with great interest.
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Old 08-02-05, 01:54 PM
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My heart goes out to the laid-off HVE employees (who apparently had no hint that such a deal was forthcoming). You fought the good fight, but Commerce won out (as it always does).

Part of me is hopeful that Image has made this move with the intent of getting back in the game. With the exception of their wonderful TV-on-DVD releases (Dick van Dyke, Twilight Zone), the company has released very little of interest (to me) in the last several years. They've mostly been appealing to the lowest common denominator with niche horror, music, Latin, and softcore T&A titles.

With the addition of the HVE label, Image appears to be trying to reclaim some of its arthouse past, since the label gives them good name-recognition and credibility (likewise with their exclusive distribution deal with Criterion). I hope to god they don't rake the good name of HVE through the mud.

I remain (very) cautiously optimistic.
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Old 08-02-05, 04:34 PM
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I'm glad HVE released Annaud's "Black and White in Color" already.
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Old 08-02-05, 05:42 PM
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HVE released quite a few Akira Kurosawa movies on VHS. Maybe these will show up on DVD.
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Old 08-02-05, 06:04 PM
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I don't think this is going to have much of an effect on Criterion. Perhaps they will put out more titles a year maybe not.
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Old 08-02-05, 06:54 PM
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It is probably a wash to a minor plus for Criterion since little will probably change as far as their distribution goes with the plus being that they will probably gain some access to Image's library of titles....all 3 Lang Mabuse titles done Criterion style anyone? It is worth restating again. Image did not buy Criterion and should have no say in what titles they feature or the quality of the discs. I also wonder now that this is out of the way is the road cleared for Criterion to unlease their long talked about cult sub-line, Eclipse.
At first blush you've got to wonder what this means for HVE. Everyone here knows Image's quality can be up & down and with most of HVE's staff being let go you've got to wonder what will happen to the high quality of their product.
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Old 08-03-05, 12:39 AM
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If somehow....the Gods agree that we see a Criterion release of Antonioni's RED DESERT...it might get interesting!!

so...let's wait and see!
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Old 08-03-05, 02:27 AM
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Originally Posted by djtoell
Image had already been distributing Criterion titles already, and have been for 15 years or so. Image simply consolidated exclusive distribution rights.

DJ
Which is probably why CH currently carries a small handful of Criterions. With Image having sole distribution rights, it's much more likely that CH will carry more in the future.
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Old 08-03-05, 09:35 AM
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Originally Posted by D-Ball
Which is probably why CH currently carries a small handful of Criterions. With Image having sole distribution rights, it's much more likely that CH will carry more in the future.

THAT would be a big plus for CH - let's hope it happens!
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Old 08-03-05, 10:47 AM
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Originally Posted by johnglad
Interesting. And what does it mean? Was Criterion only worth 8 million? Is there other outside debt or something?
Yea, $8M is the cost of just one set of their DVDs, and they must have more than one copy of each in their warehouses.
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