'we Need To Keep The Excitement Up So People Buy And Rent Dvds'

As one of the leaders in the worldwide launch of the DVD format, Benjamin S. Feingold had a central role in changing the home-video industry.

He is not, however, one to rest on past achievements. Feingold, who is president/CEO of Columbia TriStar Home Entertainment and also president of business and operations for Columbia TriStar Motion Picture Group, has his eye on introducing high-definition (HD) DVDs to consumers in the next few years.

Columbia TriStar has already endorsed the Blu-ray format, one of several competing HD technologies that have been proposed to international standards body the DVD Forum.

In addition to his work (along with Sony, Toshiba and Warner Home Video) on the 1997 introduction of DVD, Feingold helped to pioneer Columbia TriStar's direct-to-sell-through strategy for such live-action adult films as "Jerry Maguire," "My Best Friend's Wedding," "Air Force One" and "As Good as It Gets." That policy increased Columbia TriStar's North American sell-through annual gross sales to $800 million from $150 million during the past five years.

Feingold also has overseen the opening of Columbia TriStar subsidiaries in Korea, Brazil, Mexico and Ireland and worked to increase the company's video acquisitions to enhance its offerings beyond projects from Columbia Pictures, TriStar Pictures, Screen Gems and Sony Pictures Classics. Recent acquisitions include "Arlington Road" and "Dogma."

Under his guidance, Columbia TriStar set the current first-day video sales record last year, when "Spider-Man" moved 7 million combined VHS and DVD units.

"Ben's brilliance is he doesn't need credit for everything he does, which allows him to get more done," says Reed Hastings, CEO of online rental service Netflix. "He was pivotal in getting DVD going but let others have the credit."



Q: What are the most pressing issues that the home-video industry faces right now?



A: I think the biggest concern is online piracy. There are a lot of illegal downloads of movies, but watching downloaded movies on a computer as they are is not terribly attractive. We need to keep the excitement level up so people buy and rent DVDs. The concern is to not have happen to us what happened to the music business, which is that a generation was lost to online piracy.



Q: Is Columbia TriStar already taking steps to battle piracy?



A: We certainly are. The value proposition for buying or renting a movie is superior to anything you can get legally or illegally online. The presentation of DVDs, together with the value-added features, is a good value proposition for the consumer. The second thing is we are really looking forward to launching high-definition DVD in two or three years. This will significantly raise the bar in terms of the quality of the offering to the consumer.

Our strategy is to keep raising the bar so the proposition to the consumer is great, together with great marketing campaigns and enormous availability of our movies.



Q: Why have you chosen to endorse a specific HD technology?



A: Sony, Columbia TriStar and I personally have been very involved in Blu-ray for a number of years. There are many reasons. In terms of the bandwidth, it is five times what we are going to get on DVD. That creates the ability for us to have unbelievable, stunning picture quality, but also gives us a lot more bandwidth for interactive features. Compared to the other high-definition formats, Blu-ray has the most bandwidth.

By moving to Blu-ray, we will also have a new manufacturing process. We are seeing online piracy and also physical piracy in Asia and places in Europe. By having new discs and having HD at some point supplant DVD, maybe a lot of that pirate capacity will be obsolete.



Q: Are innovative marketing campaigns for DVDs going to be more important going forward?



A: They are and they aren't. I've never been one to believe in overhyping a particular product. Two of my best-selling catalog titles are "Black Hawk Down" and "Snatch." That's not because of marketing campaigns. It's because the movies are so strong, they've achieved near-cult status.

Clearly in the case of "Spider-Man," it's great to make an exciting campaign—to have it release the day after Halloween, to have stores open on Halloween night, to have big campaigns. What's right for a particular product may not be right for another one.



Q: Will video-on-demand services impact video sales in the near future?



A: I believe that video on demand has [been] and will continue to be one of the most overhyped categories relative to physical media. When people go to a store, they are ready to buy. The only decision is what to buy. When people are at their homes, they've made a decision to be home. The only decision is what they do with their time.

I can't be more blunt about it. I think that video on demand will be a part of the business, but it is a niche business that will not replace the core business, which is physical prerecorded media.



Q: When will VHS be phased out from Columbia TriStar's inventory?



A: We will continue to supply VHS so long as there is consumer demand. The critical issue is not so much consumer demand but the limited shelf space at retail. Clearly, retail would rather devote space to a growing format than a declining format. Circuit City and Best Buy are completely out of the category.



Q: Does Columbia TriStar take issue with mass merchants loss-leadering DVD products?



A: The retail price is outside of our control. I personally think the suggested retail price points or the MAP [minimum advertised price] price points are almost perfect. A MAP price point of $19.95 on a new-release DVD is within the basic price parameters of American consumers. For some reason, our customers like to compete with price. There is not much I can do about it other than to enforce strict MAP policies, as we have and will continue to do, and strengthen them.



Q: What are Columbia TriStar's key releases this fourth quarter?



A: I think our No. 1 title will probably be "Bad Boys II." Our research indicates it has the No. 1 intent to purchase in December, including "Pirates of the Caribbean" [Buena Vista Home Entertainment], even though its box office [value] is roughly half.

"Bad Boys II" is 100% in the sweet spot of the DVD consumer. It's male, it's fun, it's ugly, it's action, it's loud. We expect "Bad Boys II" to overindex its box office pound for pound as a DVD title.

"Charlie's Angels: Full Throttle" will have a great result, as will the indie movie "Whale Rider" and the documentary "Winged Migration." "Finding Nemo" [Buena Vista] will probably be No. 1 this fourth quarter. "The Matrix Reloaded" [Warner Home Video] may be No. 2.



Q: Will fourth-quarter performance be better than last year?



A: I think that this fourth quarter will be bigger than last fourth quarter. I think catalog will perform significantly better than the prior year. I also think that there are a lot more R-rated movies this year that are in the DVD sales sweet spot. That seems to be what is working more than family. Having said that, "Nemo" will probably be the No. 1 movie, even though it's not R-rated.

There's a little bit for everybody this fourth quarter. I think "Pirates" and "X2" [Twentieth Century Fox Home Entertainment] will do well. "Terminator 3: Rise of the Machines" [WHV] is going to do great because it is a phenomenal movie and a great DVD. I think the business will be up but spread across many different titles, which is more healthy than last year.



Benjamin S. Feingold: Career Highlights



2000: Appointed president of business and operations for Columbia TriStar Motion Picture Group

Co-recipient of the Video Software Dealers Assn.'s Person of the Year Award

1994: Named president/CEO of Columbia TriStar Home Entertainment

1989: Appointed Sony Pictures Entertainment senior VP of corporate development

1982: Received his JD from the Hastings College of Law, University of California, and joined the New York law firm Kaye Scholer Fierman Hays & Handler as a corporate securities and mergers and acquisitions associate

1979: Graduated from the London School of Economics with a master's degree in economics

1978: Graduated magna cum laude from Brandeis University with a bachelor's degree in history