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It was looking like News Corp was getting off its quarter-long roller coaster ride yesterday with a go-ahead vote to buy Dow Jones but elsewhere in media stocks, particularly entertainment, a different roller coaster ride kept going. After the close of market Tuesday,  DreamWorks Animation and CBS both released quarterly earnings.  It was a good day for animators, not such a good day for TV.

DreamWorks Animation(NYSE: DWA:)
DreamWorks Animation reported towering second quarter revenue with net income of $61.8m (60 cents a share) for the quarter ended June 30th.  Even subtracting a one time gain of 11cents a share for a reduction in reserves for home video sales, and another one time gain of 4cents from tax accounting,  it was huge return relative to last years income of 13.7m for the same period. 

Quarterly revenue in the film industry is highly variable and heavily influenced by the volume and quality of titles released at any given time.  DreamWorks strategy is to release one franchise title and one new film every year.  Shrek the Third was the franchise film for this year and it released this past quarter.  They’ll be living off of it for the rest of the year.

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If I posed the question: what might get Martin Scorsese, Amazon.com, and Hewlett Packard seeing in black and white and talking in excited hyperbole? How would people answer?  Would they think I was kidding if I told them the answer involved a refrigerator, a vault and a computer?  Would it help if they knew Scorsese was a noted film preservationist, that he filmed Raging Bull in black in white partly because he questioned the durability of color film stock at the time?

From Los Angeles to Sacramento to Seattle, the answer to my question lies in old celluloid, lost masters, and digital future.  The answer is hope vested in the pairing of film preservation with Print-on-Demand DVD.  It’s a quiet renaissance, something of a Hollywood 2.0; an ambitious plan being pursued by a number of industry giants.

The Preservation Paradox:
Watching a classic movie is like seeing a moment frozen in time; slivers of history.  Like a photograph, old movies have a richness, a romanticism in their black and white footage.  Absent the kind of special effects wizardry that can fill the screen today, they also had to tell a good story, and a good story is timeless.  Unfortunately, film is not so enduring.  Old film requires costly temperature controlled storage, and to be re-aired, requires meticulous, and equally expensive, cleaning and restoration. 

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Tivo and Amazon cut out the need to use a PC from their video download service earlier this week.  Tivo equipped users can now buy downloadable movies straight from their remote controls if their DVR is hooked up to a broadband Internet connection.  Microsoft similarly cut out the PC for movie downloads when it enabled a PC-free movie rental service through its Xbox gaming platform and website Xbox Live about a year ago.

At the video gaming industry’s leading trade show in Santa Monica, Microsoft and Disney announced a deal to expand the titles available on Microsoft’s service. 

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With the battle of HD DVD formats escalating into the summer, the launch of a consumer-friendly, potentially neutralizing dual-format disc has been delayed.

Warner Brothers has acknowledged that Total HD, a disc capable of housing an HD DVD movie on one side and a Blu Ray version of the movie on the other will be delayed until some time in 2008.

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Since January 24, 2006,  when Disney acquired Pixar,  Pixar executives have been in charge of the joint animation group.  Change has been in the works.  Animation head Ed Catmull and fellow former Pixar executive John Lasseter have been slowly introducing their Pixar based management culture (with the added support of Disney shareholder and Board of Directors member, Steve Jobs).

Pixar has always had its own way of doing business.  Movies and creative staff are given the time and space they need to create.    There isn’t a rush to market.  While bottom line revenue is important, there is a separation of powers when it comes to development.  Pixar doesn’t want their story tellers thinking about how to make money or their money makers thinking about how to tell stories.  Executives don’t go to story meetings.  It’s all part of its management practices.  Similarly, Pixar also strives to stay original and avoids copying its successes.  Toy Story is the only movie it’s made a sequel of.

Yesterday, in a clear sign of Disney’s “Pixarization,” changes were announced.  Principal among them, Disney will cease issuing direct-to-video sequels of some its franchises.  The sequels, which Steve Jobs has called “embarrassing,” were money makers but their quality level, both in story and execution was second rate.  

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Despite a recent history of saying it wasn’t interested in subscription businesses, London’s Financial Times and the Wall Street Journal are reporting today that Apple is in late-stage discussions with Hollywood movie studios to offer movie rentals through iTunes. The rumored plan which includes $2.99 video downloads that will expire after one month doesn’t contradict Apple’s anti-subscription position, but other rumors circulating suggest (though much less likely) that Apple might also consider a subscription rental package.

While information on the concept of iTunes rentals is too early and inconclusive to verify with certainty, it’s not an unrealistic rumor. Apple is doing well with DVD sales through iTunes but its growing market share could easily be swallowed by Amazon’s Unbox video download service (partnered with Tivo), or efforts to provide digital rental services from Blockbuster or Netflix, should they materialize. Click to Read More

For now, and the near future, the LCD’s rule as the display technology of choice for portable devices is relatively unthreatened but developing technologies are only a few years from trying to stage a coup. On Friday, at a display industry event, Sony and Philips unveiled bleeding-edge display technology breakthroughs that may lead the charge for next-generation devices in the form of ultra-thin, bendable displays.

The Phillips announcement, which was limited to words and a photograph, captured modest press attention. The Sony news, which was also revealed in a Japanese video showcasing the technology, has been burning up the wire services.

Sony’s video press release showcased a 2.5in prototype of an “Electronic Paper” display.  It has a screen that measures in at a tiny .01 inch (.3mm) thickness.  Layered on a plastic, instead of glass, the display is so thin, in fact, that unlike LCD or Plasma TV technologies, the Sony prototype can be bent into curves yet still show high quality full motion video content. (The Philips prototype offers similar abilities).

At its core, the Sony display uses what’s called an OLED (Organic Light Emitting Diode) technology along with several innovations.  The OLED technology which uses organic materials printed onto a thin film doesn’t require any kind of backlight to function (compared to an LCD) and as a result can be made far thinner.

Possible futuristic applications include ultra thin portable video devices that could look like they were imagined out of the archives of science fiction.  Click to Read More