Twin Peaks Season 2 DVD, Where Art Thou?

It's been two years now since the release of Artisan's Twin Peaks Season 1 DVD set, and the question on everyone's mind is, where's season 2? The good news is that most countries outside the US will be getting it in September of 2004. The bad news is that no US release is in sight. Why is that you're probably asking? In recent months there have been various news reports in which Artisan has claimed that they either don't have the rights any more or that the first season didn't sell enough to warrant season 2. Neither of these is true. Artisan's deal for the Spelling/Republic library (which includes Peaks) doesn't run out until September of 2005, and the Peaks box set was a fairly good seller for them, only bested by large blockbuster titles such as Terminator 2. So why haven't they really gotten around to season 2 yet? I've spent the last month or so looking into this, including talking with a couple of sources inside Artisan. The answer, sadly, boils down to petty corporate rivalry between Artisan and Paramount.
Paramount's parent company, Viacom, owned 80% of Spelling Entertainment in the late '90s due to a 1994 purchase of Blockbuster Entertainment. At the time, Spelling was showing huge losses and Paramount was trying to unload the unprofitable division. Thus they made the licensing deal with Artisan in 1998, figuring the catalog wasn't worth much. Then things changed in 1999. Spelling Entertainment underwent a dramatic restructuring that caused the company to start turning a profit, and suddenly Paramount started paying more attention. Instead of trying to dump Spelling, they purchased the remaining 20% to gain full ownership of the company and officially merged it into Viacom's family. Around the same time, dvd sales really took off, and before you knew it, home entertainment companies were eager to exploit their catalogs for titles to release on the hot dvd format. That library that Spelling let Artisan have cheap was now worth so much more.
So here's the interesting question to ask: Why has Artisan done so little to exploit the Spelling/Republic catalog, when every other home entertainment company is scrambling to dig into their back catalog for new dvd releases? The Spelling deal gives them the rights to over 6,300 films, yet to date they've only released about 30, most of which are just re-issues of the pre-licensing deal Republic discs. The answer once again, is Paramount. Because Paramount owns Spelling/Republic, they own all the source prints and negatives to every film and tv show licensed by Artisan (aside from prints have found their way into the hands of collectors). And Paramount doesn't like to share. Like most large entertainment corporations, they protect their assets fiercely once they deem them to have value, and would rather do nothing with them than let go of them cheaply for another company to profit off of. We already saw this in Paramount's refusal to license the Peaks pilot (which wasn't covered in the Spelling deal) at a reasonable price to Artisan for the first season set. With this new huge DVD market to be exploited, Paramount knew it had value, and they weren't going to let go of it easily. So we lost out on getting a US release of the pilot with the season 1 set. Now something similar is happening with season 2, and all the Spelling/Republic titles for that matter. The licensing deal Artisan has gives them the rights to release the titles, but it doesn't guarantee them access to the source materials to make new masters from. Paramount owns those, and they are doing everything they can to make it difficult for Artisan to get a hold of them to make new dvd masters from. Artisan has older existing masters for much of the catalog, but most were done for VHS releases and don't live up to the quality expected for dvd releases. New hi-def masters have to be made for dvd releases. In most cases, Paramount is either asking huge unreasonable fees for access to the source materials, or outright refusing to let Artisan have them. Artisan is a small company without deep pockets, so they have to watch carefully how much they spend on a disc. At the prices Paramount is asking, in most cases they just can't justify spending the money for new transfers (and of course if Paramount refuses outright they're stuck even more). That leaves them with two options: release sub-par discs that they know people will complain about and not accept, or not release the title at all. Artisan has opted for the latter.
So what this all means, is that we'll probably never see a release of Twin Peaks season 2 here in the US until after September of 2005, unless Paramount suddenly has a change of heart. The good news is that since Paramount is already doing new masters for the European and Asian discs, they'll have them done and can quickly churn out the discs once they re-acquire control of the Spelling library. The other wild card in all this is Lion's Gate, who now own Artisan. They're a bit more agressive with their home video releases and may decide it's worth spending the extra money to bring out some of the Spelling/Republic titles. Though given Paramount's lack of cooperation, I'd say it's a long shot at best. Most likely if you want to see Twin Peaks season 2 on dvd, you'll have to either import a copy from another region late next year, or wait until after September 2005 for a US release.