PORTLAND, Ore., Aug. 6 /PRNewswire/ -- Hollywood Entertainment Corporation, owner of the Hollywood Video chain of over 1800 video superstores, today announced that it has entered into a new VHS and DVD revenue sharing agreement with MGM Home Entertainment. (Photo: http://www.newscom.com/cgi-bin/prnh/19991105/HLYWLOGO )
Hollywood Entertainment revenue shares VHS with all major studios. The MGM agreement is Hollywood Entertainment's first revenue share agreement that includes DVD. The Company believes that the growth of DVD will increase consumer spending on movie rentals and both the studios and retailers can increase their revenues and profit under revenue sharing agreements as a result.
Commenting on revenue sharing and today's announcement, Mark Wattles, Founder and President of Hollywood Entertainment said, "As a result of Blockbuster Entertainment's comments on their Q2 conference call regarding revenue sharing on both VHS and DVD we have received many questions about our position on revenue sharing. We are interested in and anticipate entering into additional DVD and VHS revenue sharing agreements that allow us to satisfy customer demand in both formats and maintain our existing combined VHS and DVD margins. We are also willing to carry DVD titles under these revenue sharing agreements that we would otherwise not have carried because the fixed cost was too high. Based on my discussions with the studios it is their desire to insure shelf space in our stores, maintain their existing margins, and share in the upside revenue that the industry is experiencing as a result of consumers lifting their rental habits when they acquire a DVD player. We believe that both MGM and Hollywood will increase their revenue and profits from MGM titles in Hollywood Video stores as a result of our new agreement."
Hollywood Entertainment Corporation will be releasing its second quarter earnings August 7, 2001 and will hold a conference call at 10:00 am Eastern Daylight Time. The call may be accessed at 1-712-257-2360 and reference the passcode HOLLYWOOD. The call may also be accessed on the Investor Relations section of Hollywood's web site at www.hollywoodvideo.com. The conference call will be archived on the Investor Relations section of the web site through September 7, 2001.
The information contained herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Important factors that could cause actual results to differ materially from the Company's expectations include the Company's inability to negotiate future revenue sharing agreements of a similar nature with other studios on reasonably acceptable terms, and such other factors as weather, quality and timing and availability of new releases, general economic and market conditions, and factors disclosed in its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
SOURCE: Hollywood Entertainment Corporation