TALKBACK

HBO extends video arm to acquisitions

By John Dempsey -- Video Business,06/26/2006

JUNE 26 | HBO Video is buying more independent movies to help compensate for the slowdown in high-octane original series made by its HBO parent.

The video arm, which has raked in hefty coin from DVD sales of Sex and the City and The Sopranos, is ponying up between $500,000 and $2 million for DVD rights to movies such as Big Stan, the directorial debut of Rob Schneider, and The OH in Ohio, a $5 million sex comedy from Ambush Entertainment starring Parker Posey and Danny DeVito.

HBO Video president Henry McGee uses the phrase "back to the future" to describe the label's shifting focus, noting its slate consisted mainly of theatrical movies from indie distributors until the late '90s, when HBO got very aggressive in creating original programming.

Acquisitions took a back seat during the reign of Sex and Sopranos. But the former has long since stopped production, and the latter is winding down to its final eight episodes. Recent HBO series such as Big Love, Rome, Deadwood and Carnivale have not generated anywhere near the viewing levels or critical accolades, which could put a damper on their eventual DVD sales and rentals.

But McGee rejects the notion that HBO Video is returning to movies because it's afraid the new series will underperform on DVD. He cited the brisk business the first season of Deadwood has racked up, the solid DVD performance of Entourage and the high expectations for the first season of Rome.

The indie pickups "will be an adjunct to HBO's base" of original series, McGee said.

Besides Big Stan, a $10 million production from Crystal Sky in which Schneider also stars, and The OH in Ohio, recent acquisitions include Mini's First Time, a $6 million comedy with Luke Wilson and Alec Baldwin, and Red Dust, starring Hilary Swank and directed by Tom Hooper. Red Dust will premiere on disc, but the other pics will have theatrical runs before arriving in stores.

The label will share Picturehouse theatricals with sister company Fine Line Video. The next three Picturehouse movies for HBO Video are Last Days, Tristram Shandy: A Cock & Bull Story and The Notorious Bettie Page.

The video label is still mounting lavish DVD packages for its shows. The first season of Rome, for example, comes with 20 hours of extras.

DVD sales of original programming such as Sex and The Sopranos have contributed to a thriving ancillary market for series, miniseries and made-for-HBO movies, which funnels about 20% of the $1 billion in pure profits harvested every year by the pay cabler.

HBO Video started its push into buying movies from independents late last year with the release of 2001 romantic comedy The Whole Shebang, starring Stanley Tucci and Bridget Fonda, from 2K Media/Original Voices; Bauer Martinez Pictures' 2004 noir drama Out of Season, with Dennis Hopper; and IFC Films' comedy drama Duane Hopwood, starring David Schwimmer.

Reliable figures for DVD sales of indie movies are hard to come by, but Nielsen reports HBO Video has sold 21,998 units of Last Days, whereas Duane Hopwood is a flop, selling only 897 units. (These numbers don't include Wal-Mart sales.)

But don't go by these relatively modest grosses, McGee said.

"We think there are tremendous opportunities for all of these movies in DVD," he said. "The DVD business may have plateaued, but the plateau is so high up that we'll do just fine."

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