Metue.com

Blockbuster  (NYSE: BBI, BBI.B), reported Q4 earnings.

For the quarter, net income was down to $12.9m ($.05/share) from $18m ($.09/share).  Revenues increased 1.4% to $1.51b.  Online subscribers increased by 700k during the period.  Operating income totaled 445.8m, down from $57m in the prior year.

For the full year, 2006 revenues decreased 3.5% $5.52 billion – attributed by the company to the closing of stores.  Operating income for the year was at $79.1m,  versus a loss of $388m in the prior year (which included a $341m non-cash charge).

More detailed press coverage on Blockbuster’s finances can be found at:

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I looked at the prospect of hiring some off-shore programmers to handle a few items for this site. From a cost standpoint, the cost savings were a tempting lure for a small site like Metue, especially in comparison to hiring programmers locally in Silicon Valley.  Ultimately I did all but a couple tiny things myself.  For me, I saw it as an opportunity to get my hands dirty and learn more about web development. My tasks were also not that complicated.

If I had a big project, or needed more specialized services – and if I had the means to manage the workflow effectively (something not as easily done with a single project freelancer) I’d seriously consider using programming services overseas – India, Eastern Europe etc.  

On the heals of my experience, I wasn’t surprised when I saw news that Sony’s Special Effects and animation arm, Sony Pictures Imageworks (SPI) is expanding to far beyond it’s Culver City campus’ geography.

SPI acquired a 51 percent equity stake in Chennai India based effects and animation studio FrameFlow.  FrameFlow will change its name to Imageworks India and will work together with Sony Pictures Imageworks’ facility in Culver City, California. Click to Read More

Lionsgate (NYSE: LGF), the maker/distributor of television, movie and music content including popular programming like Showtime’s Weeds, announced results of Q3 on Tuesday (year end results due in early April) .  

For the quarter ended Dec 31, 2006, revenues were up 11% to $254.5m.  Operating income was up 270%.  International revnue was up 90%.  Home movie and theatrical operations saw single digit revenue declines but free cash flow increased by well over 100% to $50.7m

Sequels do out later in the year to its Saw and Hostel movie franchises are expected to provide solid growth for the company.  Rumors of the company being a potential acquisition target are encouraged by their positive growth.

More detailed press coverage on Lionsgate’s finances can be found at:

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Tax breaks, subsidies, cheaper labor, lower overhead – manufacturers have long found overseas production to be cheaper.  Software developers have also drawn the same conclusion and shipped some of their development to overseas firms from Ireland to India.   Why not the same for digital animation?

A recent article in Forbes suggests Imagi, a Hong Kong based Computer Graphics animator is trying to be an “Asia’s answer to Pixar.”  I don’t entirely agree.   The facts in the article lead me to believe that recently appointed CEO Douglas Glen is positioning Imagi to be both an offshore partner of choice for CG Animation as well as a standalone animation studio.  I think the company is going to go after both contract work and the development of their own franchises.

Glen is no stranger to off-shoring, nor its benefits.  Prior to taking the helm at Imagi in September 2006, Glen worked at toy giant Mattel where he was president of a media division responsible for software and electronics.  Mattel often relies on contracted Asian manufacturing.  Glen was also an executive at Sega of America handling game development – and the gaming industry has a well publicized history of moving production to Asia in recent years but keeping creative control elsewhere. With his background, I’d also expect Glen will insure Imagi has a hand in the lucrative licensing market that surrounds big league animation franchises

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EBay and other companies ambitiously targeted China and drooled over the potential goldmine of revenue to be reaped from its gigantic population base.  Each aspiring effort has proved a costly struggle to realize.   (EBay recently restructured its offerings there.)

Casino Royal was recently released to widescreen audiences in China.   With over a billion potential viewers, Sony aggressively pursued the release which was scheduled for around 1000 screens.  Censors were given early access to review the film for objectionable content (Previous Bond movie Die Another Day (2002) was rejected outright).  Even Danielle Craig, the star, was in Beijing for the premier. 

The James Bond franchise finally making it to Beijing underscores yet again the promise and pitfalls of breaking into new international markets, especially China, where government controls make it among the most extreme environments for any would-be marketer to navigate and profit from.

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Netflix  (NASDAQ: NFLX), reported Q4 earnings.

The company announced earnings of $14.9m ($0.21/share) versus  $3.3m (excluding a $34.9m tax gain) in the prior year.  The returns beat consensus which projected $0.15/share. 

During the period, Netflix added 654k new subscribers.  Revenue was up 44% to $277.2m

More detailed press coverage on Netflix’ finances can be found at:

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Marketwatch