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Special Edition: A Conversation with Paramount's Martin Blythe

by Robert Mandel

Before speaking with him a couple weeks ago, I had spent a couple months emailing back and forth with Paramount's VP of PR, Martin Blythe, who I found to be a straight shooter, but not undisciplined in this regard. If you participated in or read the transcripts from his chat on Home Theater Forum, you know he isn't going to give out future-looking information unless you tie him up at gunpoint and rifle through his desk. Even then, most likely, the information would probably be outdated (see below).

While I WAS surprised by his accent, Martin is a New Zealander who has been living in Los Angeles since 1987, I wasn't surprised by some of the questions I knew he just wouldn't answer. Still gotta ask Œem, right?

So, while Martin may not always be forthcoming (you can't blame him, really), he is always engagingŠand above all, an outspoken and somewhat unique voice among the many interesting people I have to deal with on a daily basis. I may not always agree with him, but I do respect anyone who stands by his beliefs, no matter what.

Martin came to Paramount at the turn of the millennium from Buena Vista, where he toiled from 1989 until 1999, holding a variety of posts in international marketing and promotions, domestic publicity, etc He has degrees in English (New Zealand) and Film & Television (UCLA).

What are Martin's main entertainment interests? Movies and gaming.

dOc: To Paramount, how does the DVD business differ from the VHS business?

MB: Well, obviously our bread-and-butter is still VHS, however DVD is rapidly becoming just as important. The future growth of the format appears to be enormous, despite occasional fears of Video-On-Demand, internet delivery and so on, arising as competition. However, there is a major difference in that DVD is an extraordinarily complex business as compared with VHS. I think many of your readers will have no idea just how complex it is. It's not just a question of spinning on a dime and turning something out. There are many more technological and legal and content issues to be resolved that simply weren't there for VHS.

dOc: What is the breakdown for Paramount, in regards to sales, between VHS and DVD?

MB: I decline to put a percentage or a number on that, let's just say that our DVD sales are consistently exceeding our goals, while our VHS remains flat. I don't see this as a cannibalization issue, like some people who have been talking about. I just think it continues to indicate the good health of the business.

dOc: So, across-the-board, ALL of your releases are doing better than expected?

MB: Well, some better than others. It's important to emphasize that this is still a "new release" business, that the financial returns, and the amount of money we can budget for each project falls naturally to new titles. That's why you're going to see more extras on new titles. It's very difficult to justify financially putting a lot of bells and whistles on titles that will sell to a very small niche audience.

dOc: What is your definition of "niche?"

MB: Fewer than 20,000 units sold.

dOc: Don't you think that the niche market will grow as the install base grows? If we have 10 million shipped now, and 10 times that in 5 years, let's say, then your niche market should grow at a rate equal to the overall DVD player growth rate. So, with that in mind, shouldn't you be able to justify over the long run putting those extras on the disc now, which will be the same disc on the shelf in 5 years?

MB: Well, I'm skeptical that it would grow like that actually. I think that just as DVD grows, audiences will still be interested in new releasesŠthat's just the way it is. I think we also have the model on how they've [catalog titles] sold on VHS. You can make certain predictions based on that. But as time passes new generations move on to new subjects. I'm a big film buff and it bothers me somewhat that some of the great classics—from any studio—haven't sold nearly as well as new movies, which face it, are much more perishable in terms of the culture. But that's the way it isŠhistory moves on. The challenge for me is to always talk up those titles with the full realization that they are not going to sell anything like the numbers that a new release is going to do.

dOc: Comparatively speaking, now I understand that there is an investment in the transfer of the contentŠ

MB:And the packaging and the marketing and the music clearances. Well, let's just say that my simple answer is that we're not going to put something out to lose money. And it is EASY to lose money in this business. Of course, the initial response to anyone reading this is "they only care about money," but it isn't true. You have to weigh all these considerations when you are putting titles out. And if the argument is "spend your money on bells and whistles," I'm not sure that's the best use of the money. I'd rather try to put out more titles and save what money there is for those. And you are seeing a gradual increase in the number of titles coming out each month, and that will continue to increase. It's going to depend on how much the market can support. You don't just throw titles out there because there are only so many dollars to go around.

dOc: Don't you think that some of these catalog titles get a new life when you put it out on DVD?

MB: No, nothing is forever.

Paramount has also been very cautious about reissuing titles as collector's editions. We feel it's important not to violate the consumer's trust by bringing out a standard edition and a collector's edition too close together. We are discussing a number of titles that are candidates for this‹I'm not going to name any‹but where it's appropriate we will proceed.

dOc: You are very cautious about these things.

MB: Well, I have to be, because you never know if something will simply drop out of the schedule again.

dOc: Speaking of your scheduleŠbased on your HTF chat, it sure seemed like your schedule was up in the air.

MB: It's constantly that way.

dOc: Why is that? Is it more due to licensing or productionŠ?

MB: Well, there are so many variables involved. And I think we can all guess what they are. The first thing is the state of the original film. Two, can we cluster movies so that there is a thematic link. If you're going to bring out a new Crocodile Dundee movie, you might want to think about bringing out the other ones. Or you may want to theme it around a filmmaker. That way you involve the filmmakers in the process. That brings me to the third point: filmmakers have their own opinions on this, and we're not going to move without consulting influential filmmakers.

dOc: But only influential filmmakers?

MB: Well, for obvious reasons you want to involve them in the project if it's going to benefit it. If they bring unique materials, unique programming to the disc, then you have an excellent incentive. At the same time many filmmakers approach US about bringing out there movies. There are so many that we have to sort through them. A fourth reason is legal clearances. It's not that simple when people say bring out the uncut version of Friday the 13th part whateverŠ we may not have the rights.

dOc: So what is the breakdown of cost for bringing a film to DVD? How much is for licensing, for transfers, etc.?

MB: Well, you can't break it down that way because it varies so much with each project, but let me just say that it is a lot more expensive than VHS. You know, anything with numbers I'm never going to comment on.

dOc: What about the $29.95 SRP?

MB: Do you mean are we contemplating changes to that at the moment?

dOc: In any way, shape or form. I mean on catalog titles, titles that have been out for a while.

MB: Well, we do have some $19.99 price pointsŠ Star Trek, the Peanuts titlesŠit's only an SRP. In other words, whatever the retailers are going to charge is something else again. We are always discussing price, but there is no change in strategy being contemplated at the moment.

dOc: What are your views on rental pricing?

MB: Again, nothing I would ever comment on...but bear in mind that there is revenue-sharing going on with some studios at retail; so in a sense, rental pricing has already appeared, although not along the old scale model that some people are talking about.

dOc: How do you think that the internet has affected marketing for studios—DVD in particular—meaning: how much does Paramount use the information available on the net from chats, message boards, etc.?

MB: Sometimes we do. The one thing I have found is that the opinions are all across the board. There are many that understand the studios' position and are willing to cut them some slack. We are individuals who have a diversity of opinions about what movies we want to see come out, just like them. In other words, we are sympathetic to what people say, but we work on our own assumptions too. On the other hand, those who see it as a "them vs. us" thing, where the studios are the bad guys who won't deliver to the consumer what they wantŠ it is disappointing to me when the conversations on chats deteriorates to the level of name calling.

The Home Theater Forum chat was genuinely interesting to our marketing people. When the subject of the DVD promotion came up involving the tearing off the UPC or barcodes, we learned that the consumers don't want to violate the box. This type of discussion is healthy, and that's why we anticipate doing more of these. When I read "Hey, Paramount, why don't you bring out such-and-such on DVD instead of sitting on your 'whatever'," it's like, "OK Violet, we'll take note of what you say," (I go online every couple of days to read these), but it's not going to move the dial much. In terms of marketing, I believe that marketing and PR need to keep their eye on the ball and determine what will translate into people buying DVDs.

dOc: What about on the theatrical side—how do you think the internet has affected marketing there? Take Blair Witch for example, where the internet, the website in particular, grew the word-of-mouthŠso quickly.

MB: I think it's very hard to generalize wider than that. I think we can all point out individual cases where this has happened, but I don't think that, in the greater scale of things, it translates into a huge difference. It's a great source of gossip and information, but I think it is only one of the vehicles that people use to make their mind up about what they go to see or buy.

It's a dilemma I have with the press. Do I really want to send out hundreds of DVDs to the press, which many will turn into reviews, but do those reviews mean that anybody will buy a DVD? Yes, but how significant is that? That's not unlike when reviews come out in the newspaper, do we trust the reviewer? Does ANYBODY trust the reviewer? No! Some we do more than others, but we form our own opinions.

dOc: I decline to comment!

MB: (Laughing) Because you agree with me!

dOc: I decline to comment!

MB: I think you constantly have to remind people to keep in mind that the most important part of every DVD is "The Movie." And I know that getting into all the technical details may be of interest to people, butŠ. An analogous argument can made for the extras on DVD—and I know this may sound like heresy to say so, but—I believe that people only watch the extras once, and they watch the movie several times.

dOc: That's perfectly viable. Certainly.

MB: It's not that I am criticizing extras, because the extras have many purposes. For example, they can give a movie a greater appeal as a rental at Blockbuster or Hollywood Video because people may find the extras the most compelling reason to rent the DVD.

dOc: That's what I was speaking to earlier, and perhaps I should rephrase in terms of rental appeal: a catalog VHS title, such as Shane, has been sitting on the shelf collecting dust for god knows how long...but when the renter sees it on DVD they want to pick it up—if for no other reason than to see and hear it on DVD, or because of the extras.

MB: Well, I think you are opening up the question of collectability, which I think is an interesting one. There is no question in my mind that DVD is splitting into two camps. The first are the collectors who have to restrain their tendencies to try to collect EVERYTHING and start focusing on what they REALLY want in their livingroom, and in that group are often film buffs who have a fairly decent idea of film history. Then the other group is your mass audience who are more inclined to rentals, and really DON'T want a large number of DVDs accumulating the way family kid-vid titles accumulated in many livingrooms across the country, when the kids were growing up. Those folks want to be able to pick and choose occasional titles. They may be the ones who are more interested in video on demand, and internet delivery, and other technologies in the future, ironically enough, because they don't want to be overwhelmed by all of these titles—it's too expensive.

dOc: They don't want all the piles like the ones in my livingroom?

MB: Right!

dOc: Has there been any thought similar to what Universal or Disney have done, where they have brought out different editions at the same time? Not necessarily just a widescreen and the other full frame, but a standard edition with movie and trailer, as well as a collector's edition with extra material; that being the split between rental and collection?

MB: I don't know that we have considered bringing out two simultaneously. We have considered revisiting some of our previous releases, partly because they didn't have any extras or they weren't anamorphic—reissuing those. There are none planned through the end of this year or early next year, but you may see some of that during next year. That's different from what you're asking.

dOc: So, as DVD goes mainstream, based on what you have honestly said are the facts that drive Paramount's decisions, are you going to stick with anamorphic widescreen?

MB: Yes. All of our titles, except where it doesn't make any sense, are in anamorphic. They are new transfersŠ

dOc: Are these downconverted High-Definition transfers?

MB: Yes.

dOc: So, when DVD is fully mainstream—despite the fact that average Joe Public doesn't like the "ugly black lines, " you have no intentions of switching to full frame or pan-and-scan only, or two-sided or dual-layered with both aspect ratios discs?

MB: That is not the Paramount strategy at this point. Although I have heard a number of people out there asking for full frame, it's not contemplated. What do you think of that?

dOc: Well, first, I am for protecting the integrity of the director's original artistic composition. Second, why not transfer the film to DVD at its highest possible resolution—to the fullest of the medium's capability?

Going back to your statement that you don't think DVD is cannibalizing VHS, do you think it is enhancing the entire home video businessŠpeople more interested in renting movies than they might have been on VHS alone?

MB: Yes. I think that DVD enhances the entertainment experience, because many people are building home theater systems that are very sophisticated or just quite simple, but they enjoy the way that you can control the entertainment in your home.

dOc: What do you think about home theater? Do you think that it has had an effect upon the theatrical experience?

MB: Yes, but I don't think that the comparison with theatrical is the right approach. I think what is more interesting is to relate the growth of DVD and home theater systems to considerations about where the computer should be in the house. The extraordinary rise of gaming, and some of the integrating technologies, whereby television and computer are merging. I think it's reshaping how people think about their livingrooms. Over the last 10 years there has been a tendency to upgrade computers every couple of years, and move old televisions into other rooms of the house. I actually think that this is a bad thing. Too many families have too many televisions in their house. I think that there will be a fascinating transition period here, where families identify what they want in their livingroom. THE room where they all hang out. Do they want the computer in there? Do they want to go shopping online in THAT room? These are the questions families are wrestling with.

dOc: So, if you don't think DVD has cannibalized VHS, do you think it has cannibalized theatrical?

MB: No. Look at box office receipts. The revenue streams from theatrical, video rental, video sell-through, the music business, the gaming business are all either ahead or stable. I think talking about cannibalizing is the wrong way to approach this. It all benefits the consumer to have choices. It's a word the press has often used.

dOc: You're right. When I say cannibalize I mean less the receipts than I do the experience. Why are people building these home theaters in their livingroom? I think it's because there are many who no longer enjoy the experience of going to the theater. Whether it's bad prints, bad screens, bad sound equipment, the film isn't focused, the chairs are uncomfortable, or the rest of the theatergoing public themselves. It's a double-edged sword, really. On the one hand, home theater allows the family to be together in the livingroom, but unlike those of us who didn't have this luxury and grew up with the etiquette of going to a theater, there is an entire generation that have grown up watching films in their livingrooms who translate this to mean that it is okay to then act the same way in the theater (talking, answering their cell phones, yelling at the screen, etc.), driving people to wait on a theatrical release until they can view it in the comfort of their own home in a manner that they feel comfortable. To boot, it is often cheaper to buy—let alone rent—a DVD than take a date or your family to the theater to see the same film. And, frankly, the right home theater with the properly treated DVD can blow away the theatrical experience. I still like both, but I admit I get really aggravated by the growing rudeness of people.

MB: I dispute that contention, because the revenues suggest that audience attendance remains healthy. It's just not true. It's true that the exhibition chains are in poor shape financially, but it's not because audience numbers are down. To speak to your point, it was ever so. There has always been a defection of certain age groups and demographic groups away from certain entertainment options. But that has always been replenished by a new generation.

dOc: How has DVD affected the theatrical production process?

MB: Minimally, still, however—there is no doubt that filmmakers have DVD in the back of their mind when they are shooting a movie. But you really have to ask the directors for their comments on this. I think you'd find that they are very diverse and very interesting. It would make for an interesting topic in itself.

dOc: So, does Paramount seek the final approval of the director for the DVD product? Or, at least from the "influential ones," as you said?

MB: Yes. Not always, but where we can, yes.

dOc: What is Paramount's definition of a "special edition?"

MB: So far Paramount has not issued any special editions. A disc like MI—II has so much stuff on it, one may well ask why it isn't called a special editionŠI guess when our first special edition comes along I'll tell you what our reasons were for calling it that. I suspect it will be because we already have a standard edition out, and we want to delineate that for consumers.

dOc: So, then MI—II is still not going to be a special edition DVD, to your standards?

MB: No.

dOc: That's unique.

MB: The thing is that the press or public have been referring to DVDs like TMR or Sleepy Hollow as collector's or special editions, but they're not. We felt that as new movies with strong commercial appeal, every bell and whistle that we had access to—that made sense—should go on those discs.

dOc: OK, so those aren't special editions. How is the decision made as far as catalog titles then? Obviously you have many catalog titles that are in high demand that are not out yet. You have talked to the fact that there are many that will never get the extra featuresŠbut there definitely seems to have been a turning point when Paramount began including extra content whereas before you hadn't.

MB: I think you can point to the middle of last year as a transition point. That's when all discs started to be anamorphic, and that was the first priority—then and now. It takes a little while to ramp up, so the first laden discs came out from that period hit in November and December—there has to be a time lag—those discs were Chinatown, Apocalypse Now, The General's DaughterŠso, really, ever since then.

dOc: What accounts for that change in policy?

MB: I think it was due to the perception that the market was changing.

dOc: But where did you draw that perception from?

MB: The sense that DVD player penetration was expanding at a healthy rate, so therefore it made sense to do these.

dOc: So, it wasn't audience driven? It was solely market driven?

MB: Certainly.

dOc: Meaning you weren't getting this information from market research, or the internet; the install base is an understandable measureŠ

MB: I wouldn't say that audiences didn't play a role. You know there is a concensus that forms on any issue, and everybody talks to everybody; out of that certain priorities emerge. Again, our first priority—since that policy change occurred last year—is the transfers.

dOc: What was the impetus for that change?

MB: Internal discussions about what was best for the format.

dOc: What about DVD-ROM contentŠis MI—II the first with this?

MB: No, actually it will be the second. The first is Blue's Clues: The Big Musical Movie. So, our obvious appeal there is that pre-schoolers love CD-ROM games. Probably a smaller number, but rapidly growing, is the amount of people who like to watch a movie on their computer, as opposed to on a DVD player.

dOc: What is your bestseller to this point?

MB: Well, there are shipped numbers and sales numbers, I think it is safe to say that MI—II is going to blow away all of our shipped numbers. We are absolutely thrilled at how exciting this disc is. What I particularly like is that its high-tech interactive features match the theme and style of the film. Even the menu screens knock your sox off!

dOc: Do you do all of your production in-house?

MB: No. They're vendors. Although we outsource, that isn't to say that there aren't people here from technology and programming who aren't tremendously involved. Our digital mastering people are calling the shots.

dOc: Going back, you guys don't have a lot of full motion menus.

MB: Well, again, these are fairly expensive items, and our money goes into the transfers. A big movie like MI—II—where we had the big budget—is an opportunity to have some fun with additional features, with the landscape.

dOc: Has there been a surprise seller?

MB: I think we always knew that Braveheart was going to be big, and for a movie that is more than 5 years old, it was extremely gratifying to see those numbers.

dOc: So, then, doesn't that bode well for putting out your better known catalog titles?

MB: Well, you also have to remember that Braveheart was the second most requested on, so there are indicators as to how you are going to do!

dOc: Since getting into the business of DVD, what has Paramount learned?

MB: Well, I'd have to say that we are always learning. And suggestions welcomed, too. The chats are good places to do it. Letters, emails and the phone. But I always say, "Put it in writing," because that's the proof that you went to the trouble. If you really believe in something, put it in a letter. I always think it's too easy to write an email and appear passionate.

Send your impassioned pleas to:
Paramount Home Entertainment
5555 Melrose Avenue
Hollywood, CA