Image acquires Criterion

Discussion in 'DVD Video' started by Goro, Aug 3, 2005.

  1. Goro

    Goro Guest

    so i wonder what this means. Will it help Criterion and allow them to
    get access to more films and to get them out faster? Or does it mean
    that Criteiron will "sell out" and start doing more
    ARMAGEDDON-types...?

    I'm hoping for the best.

    -goro-

    http://videostoremag.com/news/html/breaking_article.cfm?sec_id=2&&article_ID=7843

    Image Entertainment Monday announced it has bought Home Vision
    Entertainment, a Chicago-based specialty supplier of independent and
    foreign films. In connection with the $8 million cash deal, Image also
    negotiated exclusive distribution rights to the prestigious Criterion
    Collection for the next five years.

    Image, a Chatsworth, Calif.-based producer and distributor of home
    entertainment, has a domestic catalog of more than 2,800 exclusive DVDs
    and 175 CDs.

    Also on Monday, Image lowered its first-quarter 2006 revenue guidance
    to between $18 million and $19 million for the quarter ending June 30.
    Previously the company had announced revenue guidance of between $19
    million and $21 million. Image also said it is not adjusting previously
    announced annual revenue guidance of between $110 million and $120
    million. An investor conference call will be held Aug. 11.

    With the acquisition of all of the outstanding capital stock of Public
    Media Inc., Image becomes the new owner of Home Vision, with a library
    of more than 130 active titles, including The Day of the Dolphin, the
    1973 film with George C. Scott, and the BBC productions of C.S.
    Lewis' classic The Chronicles of Narnia.

    Image also becomes the sole retail source of titles from Criterion, the
    industry's major source of high-end special-edition DVDs. Criterion
    has about 280 active DVD titles in its library, mostly acclaimed
    classic and contemporary films, and releases three to four new titles a
    month.

    Previously, Image shared distribution of Criterion titles with Home
    Vision, each servicing its own retail lists.

    Image COO David Borshell noted that this is Image's first acquisition
    of an independent video company and the company's first acquisition
    since the 1999 purchase of online retailer DVD Planet.

    "This is extremely important to Image in our strategy to grow the
    company," Borshell said. "We are a public company, and people are
    always asking us how we can continue to grow revenue. Our
    infrastructure is really in a great position to add revenue like this,
    from external sources - and with very little expense."

    Image maintains a 76,000-square-foot distribution facility in Las Vegas
    and a sales force of 10 national sales representatives, not including
    support staff. Image plans to close Home Vision's Chicago
    headquarters and warehouse, laying off 40 of 45 employees and
    consolidating all of the company's operations into its own facilities
    in Chatsworth and Las Vegas.

    Home Vision president and CEO Adrianne Furniss will stay on as a
    consultant for three years.

    Borshell said that in calendar-year 2004, Home Vision generated net
    revenue of about $29 million from its exclusive titles as well as its
    co-distributed Criterion DVDs.

    Now that the entire Criterion Collection is under Image's auspices,
    Borshell said, the company's marketing muscle can really kick in.

    "With cohesive marketing, we certainly believe we can increase the
    revenue base," he said. "In the past, because we only dealt with
    part of Criterion, their product didn't even flow through our
    marketing department because we only handled a subset. Now, all of a
    sudden because we are exclusive, our entire marketing department gets
    to step in and help build the brand."

    Criterion Collection CEO Jonathan Turell said he looks forward "to
    increased marketing and sales efforts with respect to our programming
    as a result of our new exclusive distribution agreement. Over the
    years, Image has been a very vocal supporter of ours, and they have a
    tremendous understanding of the Criterion Collection's importance in
    the DVD market."

    Borshell promises more acquisitions in the future. "We certainly
    believe this is a nice stepping stone for us in letting other companies
    know that Image is looking to grow its business," he said. "And
    while we have openly talked about wanting to do acquisitions, it's
    always nice to get the first one under your belt."

    "The stage has been set to keep this growth engine running," Image
    president and CEO Martin Greenwald said. "Now that the transaction
    has been concluded, we plan to intensify efforts to identify and pursue
    further opportunities. Our strategy is clear: to continue acquiring
    exclusive content for a broad range of current and future distribution
    channels."
    Goro, Aug 3, 2005
    #1
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  2. On 2 Aug 2005 16:38:25 -0700, Goro wrote:

    [snip]

    Your subject line is misleading, they don't appear to have bought Criterion
    itself just its distributor leaving Image as the sole distributor of
    Criterion DVDs.
    Ian Galbraith, Aug 3, 2005
    #2
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  3. Goro

    jayembee Guest

    Ian Galbraith <> wrote:

    > Your subject line is misleading, they don't appear to have bought Criterion
    > itself just its distributor leaving Image as the sole distributor of
    > Criterion DVDs.


    Not quite. Home Vision wasn't just a distributor of Criterion DVDs Home Vision
    was a co-owner of Criterion (the other partner being Janus Films). By buying
    HVE, Image has become half-owner of Criterion.

    -- jayembee
    jayembee, Aug 4, 2005
    #3
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