Fox finds rev share
Holdout inks Blockbuster deal for 1-yr. try
Fox Filmed Entertainment chairman Bill Mechanic, who has been opposed to enacting a revenue-sharing program in the past, confirmed that Blockbuster is offering "There's Something About Mary," released Feb. 2, on a revenue-sharing basis.
"Mary" is not the first title from Fox under the program with Blockbuster (the first titles released under the arrangement, beginning last month, were "How Stella Got Her Groove Back," "The Slums of Beverly Hills" and "Shooting Fish") but the $172 million theatrical hit is definately the biggest title to come under the pact.
Mechanic said he had been unwilling to institute such a program until "we could make sure the business was evenhanded." In the past, Mechanic and a few other studio execs have expressed concern that revenue-sharing with the major chains like Blockbuster and Hollywood Video could effectively alienate smaller retailers, leading to a consolidation of the retail business among a few large companies.
A Fox Home Entertainment spokesman also confirmed the deal and said: "Fox's goal is to build business for all retailers. We continually evaluate a full spectrum of copy-depth programs."
Not on output basis
While executives at Fox would not provide additional details, industry sources said the chain will offer additional Fox titles on a revenue-sharing basis, but not on an output basis. The agreement is said to last about a year, unlike the three-year pacts the chain recently signed with a host of other major suppliers.
Last month, Warner Home Video and its sister companies, New Line Home Video, HBO Video and Turner Entertainment, signed a multiyear output deal with the Dallas-based chain.
Sources said Fox signed a pact with Blockbuster both to see if revenue sharing works and to end the dry spell between the two parties.
Fox's agreement, while not an official "test," according to industry sources, ended a long-running battle between the two companies that began last year when Fox became reluctant to sign a deal with the chain.
Retaliation
Blockbuster, which has been pushing for revenue sharing as a way to offer copy depth without a large upfront financial risk, retaliated by greatly reducing the amount of Fox product it carried.
Fox reportedly is not anxious to offer revenue sharing with other chains and is taking a wait-and-see attitude before it makes any further decisions, including signing a long-term pact with Blockbuster.
"Let's face it, 'Something About Mary' is a major title and (Fox) wanted to get as many units out there as possible," said one industry executive. "They don't really know how revenue sharing will work unless they try it."
Among others
Fox joins not only Warner, but Universal Studios Home Entertainment, Columbia TriStar Home Video and Buena Vista Home Entertainment in the revenue-sharing arena.
Paramount Home Video has not announced revenue sharing, but industry sources have long speculated that it has been selling product to sister company Blockbuster on a revenue-sharing basis since last year.
DreamWorks remains on the fence and has not signed revenue-sharing agreements with any major chain. Some of its product, however, has been sold to Rentrak Corp. through Universal, its distribution partner.
(Video Business columnist Paul Sweeting contributed to this report; Betsy Scala is a reporter with Video Business.)
