Hannover House 20th Anniversary Marks Home Video Sales Milestone

Entertainment distributor Hannover House, Inc. (OTC: HHSE), will celebrate two milestone events today, as the company’s 20^th anniversary corresponds to the cumulative unit sales achievement of ten-million (10,000,000) home video units.  Formed in September, 1993, Hannover House began as a book publisher, but added home video products ten years ago and now owns or controls the distribution rights to more than 180 feature films and video programs.  A historic video sales review - completed last week in compliance with ongoing audit requirements - revealed that the company’s September shipment of “Zombie Warz” to Walmart pushed the cumulative sales for home video units to 10,004,150 (inclusive of DVD and Blu-Ray units, and until 2005, VHS videos).

“We are very pleased to have reached two milestones today that few independent studios ever achieve,” said Eric Parkinson, C.E.O. of Hannover House.  “The completion of twenty years of continuous operation is both rare and notable.  But the consistent sales performance over these years, and the company’s ability to adapt to both changing market and media conditions is more meaningful to me.  Our strength has been in identifying and predicting commercial concepts and trends, and providing programming that addresses these needs.  As consumer tastes have changed, so have our titles, and as the market continues to mature, Hannover will adapt our programming to maximize success.”

Top selling video releases for Hannover House cover more than forty independent suppliers and releasing labels, and include (alphabetically):  American Bullfighter, American Fighter Pilot, Animal Clinic, Antonio Aguilar Colecion, Black Male, Boggy Creek, Classic Comedy Collection, Classic TV Comedies, Come Away Home, Dawn of the Living Dead, Deceptz, Delivering Milo, Devil in the Flesh, Fathers of the Sport, Fun Park, Future Shock, Grand Champion, Great Souls, Humans Vs. Zombies, Gotta Go, Magic Voyage, Martial Arts Action Pack, Mind Your Manners, My Brother The Pig, Oxygen, Outlaws: The Legend of O.B. Taggart, Patient Zero, Pink Skies, Samurai Action Pack, Savage Land, Siegfried & Roy: The Magic Box, SWAT: The Real Story, Teen Yoga, Televisa Spanish Classics, Toys in the Attic, Turtle: The Incredible Journey, Twelve, War Eagle Arkansas, Wrangler and Zombie Warz: Falls the Shadow.

Upcoming home video releases for Hannover House include these items currently in solicitation:  Amityville Asylum; Blues for Willadean;  The Coffin; Frankenstein 2014; Ingloda: The Possession Within;  Sunshine and To.Get.Her: The Spring Break Murders.  Three international titles are slated for limited theatrical release in Q4 prior to a Q2 home video launch:  The Weather Station (Russia), Asalto Al Cine (Mexico) and Borrar de la Memoria (Mexico).

In addition to the company’s achievements with home video, Hannover House remains active in book publishing, and is expanding efforts to grow its Video-On-Demand business.

“We wish to thank the wholesalers and retailers that have supported Hannover House products over the years,” Parkinson continued.  “We also wish to thank our key suppliers, our program producers and our public company shareholders for helping us build the company into what is now one of the longest, continuously operating independent distribution labels in America.”

HANNOVER HOUSE was formed in 1993 as a U.S. Book Publisher, adding DVD products in 2002, music CDs in 2004 and theatrical releasing activities in 2008. The company sells to most major retailers and wholesalers of entertainment products in North America, with Wal-Mart, Best Buy, Netflix, Redbox and Barnes & Noble collectively representing over 80% of annual consumer product revenues. Hannover has been expanding its activities in the emerging media of Video-On-Demand, both with direct licensing arrangements to the major portal outlets, as well as through a newly launched portal venture with Nanotech Entertainment, called “VODwiz” (as both an IPTV channel as well as an internet V.O.D. site). The principal offices for Hannover House are located in Northwest Arkansas, conveniently near the world headquarters for Wal-Mart Stores, Inc., and major distribution centers. For more information on Hannover House, view the filings at: www.OTCMarkets.com under trading symbol HHSE.

SAFE HARBOR STATEMENT

This press release may contain certain forward-looking statements within the meaning of Sections 27A & 21E of the amended Securities and Exchange Acts of 1933-34, which are intended to be covered by the safe harbors created thereby. Although the company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, there can be no assurance that these statements included in this press release will prove accurate.

 

Hannover House pacts directly with Walmart's VUDU for V.O.D. Streaming...

Watch for a newswire release this afternoon covering a long-term agreement signed between Hannover House and VUDU (the Walmart-owned streaming site).  Initial release slate includes 20 catalog titles and 20 new releases (of which ten have yet to be publicly announced outside of the Non-Disclosure status between Hannover House and VUDU).

As Video-On-Demand continues to grow (and in some instances, at the expense of traditional home video "packaged goods"), the importance of aligning Hannover House to these major players is clear.  Beginning in January, all Hannover House DVD and Blu-Ray products sold into retail placement at Walmart locations, will also be available (day-and-date) with VUDU for streaming and or / electronic purchase ("digital download").  We are especially pleased to be one of only six indie studios selected for direct status with VUDU, which is based in large part to the company's current successes with packaged goods at Walmart, as well as the historic standing between the companies.

Over the next few weeks, watch for other strategic announcements between Hannover House and major V.O.D. portals.

From a revenue and return-on-investment basis, sales generated through Video-On-Demand sites (such as VUDU and VODwiz) are high-margin and low-cost pursuits.  Traditional home video packaged goods require manufacturing, shipping and inventory storage, which diminish the R.O.I. when compared to V.O.D. sales.

Zombie Warz leads HOT MOVIES promotion at 2,907 Wal-Mart Supercenters!

Benefitting from a well-timed release corresponding with the major Brad Pitt hit, "WORLD WAR Z", the Hannover House apocalyptic thriller "ZOMBIE WARZ" is the current lead title in a 24-film special assortment of "HOT MOVIES" at 2,300 Walmart stores nationwide!  The 1/2-pallet display is in the "action alley" (near the Hard-Goods store entrance) and in many locations, the display is adjacent to the 1/2-pallet displayer for "WORLD WAR Z."  It's a great example of market drafting and complementary timing, and a great indie-studio strategy whenever possible.  In the past, Hannover House has had other successful titles that "drafted" off major theatrical films of a similar content.  The company's direct-to-video productions of "SWAT: THE REAL STORY" and "SAMURAI: THE LAST WARRIOR" were top selling items at Walmart and Best Buy as complementary documentary support for the feature films "S.W.A.T." and "THE LAST SAMURAI."  Hannover's current direct-to-video documentary production of "DINOSAURS OF THE JURASSIC WORLD" should be a solid selling item when first released next spring... but is also expected to have a long retail shelf-life due in part to it's complementary support of the upcoming Spielberg epic "JURASSIC WORLD" (due out in theatres June, 2015).

Major retailer adds LENNON BERMUDA CD to Black Friday Specials!!!

The Lennon Bermuda (Tribute CD) from Hannover House and FB Media has been added as a Black Friday featured item from one of the nation's top retailers!  Watch for the announcement in October(from the retailer) as they roll-out their entire product listings as Black Friday specials.  We are also working to get a couple of DVD's included, but that's not yet finalized... Meanwhile, time to get our manufacturing lab in California busy!  SMILIN' AND DIALIN' for Q4 sales!

UPDATE:  While all of the retail accounts are aware of the street dates for this item, some shareholders believed that the Lennon CD was due out now (Sept. 24), based upon the acquisitions announcement in July.  Our apologies for not immediately informing shareholders of the corrected release date, which was changed back in July after initial discussions with major accounts.  In order to be a "new" release eligible for Black Friday placement, the company had to move the retail (bricks-and-mortar) date to Tuesday, Nov. 19 (and the on-line date to Tues., Nov. 12).  The November dates not only work for mainstream book retailers, but also represent a preferred on-sale launch date for discussions underway for placement into Starbucks.  Our goal remains to maximize sales for each item, and oftentimes, this means that the company needs to coordinate release dates to correspond with retail shelf space or promotional availabilities.

Upcoming release of BONOBOS should appeal to large nature-documentary market

We received some inquiries from shareholders about the genres' of upcoming releases - including questions about the African nature film, "THE LION PRINCE" and other nature programming.  While the company is still working out the casting details for "THE LION PRINCE" for revoicing into English (the film otherwise already is shot and ready for release), we wanted to share information on another, exciting nature film that is in process.

Hannover House is working with the producers of "BONOBOS" and its French director Alain Tixier on a venture to release his amazing new film into North America.  This 2012 nature documentary from MC4 and Warner Brothers International will generate proceeds to benefit the Bonobos Rescue Center and the World Wildlife Fund;  WWF celebrity supporters include Hugh Jackman and Cate Blanchett, who - pending scheduling - may be providing the narration for the film (please note that neither of these performers is signed as of today).  If either (or both) of these designated performers ultimately is unavailable to participate in this project, we're told that other WWF celebrity supporters are likely to support the venture.  Below is teaser artwork. The HHSE plan is to release the film to V.O.D., DVD and Blu-Ray on March 4, 2014 - with placements into Walmart, Sams, Costco, Redbox, Netflix and other key accounts (as well as wide "On-Demand" VOD placement, including VODwiz.com). 

Stay tuned....!

Updates on Phones, Projects

Good Morning HHSE Friends - Here's a couple of quick updates for today, Thursday, Sept. 12.

1).  TELEPHONE & DIGITAL SYSTEMS UPGRADE - Hannover House has contracted with Cox Communications for a significant upgrade to the company's telephone and internet services.  These installations are occurring TODAY and may result in temporary outage of telephone and internet services.  The new phone systems will include personnel specific direct dial numbers and Voice Mail; the internet service includes a capacity upgrade to enable high-speed streaming of 4k products and other high-data uses to occur.

2).  MAJOR PROJECTS - While Hannover House is in various stages of development and financing for several major feature projects, we feel it's necessary to address the rumor that "NO," one of the projects is not a biography on John Lennon.  The company is pleased to be working with FB Media on the Lennon Bermuda projects, but to our knowledge, there is not a feature film in development by any of the principal parties.  The other titles generating the greatest level of inquiry and questions for Hannover House management are:

a).  MOTHER GOOSE / aka "UTOPIA" - Significant structural steps have been taken to turn this project and the international pre-sale commitments into an active production.  This title seems well-positioned for 2014.

b).  T3K ("Terminator 3000") - While progress continues on the screenplay for this 3-D animated feature, the rights issue of the franchise will still need to be resolved before actual production can commence.

c).  MOTHMAN CHRONICLES (aka NIGHT SKIES) - Still in active pre-production, financing agreements with private investors are still being finalized.  Our major star talents have been "attached" but will not be announced until commencement of principal photography.

3).  THE VERDICT: JUSTICE FOR JOHN F. KENNEDY - Media interest in booking our author, Barr McClellan, has been extremely high, and we think this bodes well for a significant result on this book's release in November.  This is McClellan's sequel to the 2003 book, "Blood, Money & Power: How LBHJ Killed JFK" which sold over 120,000 copies and hit # 1 on Amazon (and # 11 on the New York Times Best-Sellers list). 

4).  AUDIT STATUS - Outside-Accountant Diane Hagerty has been working at Hannover House almost daily in assembling elements in the format requested by Hogan-Taylor.  All of the company's historic accounts payable records are being input into QuickBooks and assigned by categories, subcategories and title-specific tracking data.  This information will enable instant verification that costs have been included and properly assigned, while eliminating the prospect of costs being improperly allocated or entered.  For the past 10-years, the company had been tracking accounts payable under an XL format of data entry, which is not compatible with the QuickBooks data tracking.  The company does not anticipate any unreasonable delays or issues impacting this audit process, and does not see this as an issue impacting the TCA Credit Line covenants.

Special Purpose International Division

The company has received some shareholder inquiries about our postings yesterday concerning the benefits of organizing an entity in the Republic of Ireland.  To be clear, the purpose of such an activity would be to maximize shareholder return from International Sales (including pre-sales for "Mother Goose").  However, HHSE does not otherwise envision a scenario of moving the public-company itself to a domicile out of the United States. 

With each motion picture production, most studios form a "Special Purpose Entity" (SPE) for such endeavors for a variety of reasons (ranging from liability insulation to accommodation of third party investments).  In determining the structure and domicile of a special purpose entity, consideration needs to be made with respect to tax issues, co-production ventures and sales-revenue benefits.  A Hannover House related SPE domiciled in Ireland could potentially save the company substantially in taxes, while positioning the film for enhanced revenues through E.U. Certification Status.  Bottom-line, a SPE domiciled in Ireland could result in millions of dollars of net benefit to HHSE.

Next time you're watching a major feature film, don't leave the theatre (or turn off the television) until the final credits have scrolled.  Towards the end of the closing credits (often the very last lines), you are likely to find that SPE's were utilized for each film production, while the overall distribution (for instance) might be UNIVERSAL or FOX or some other major studio.  When you're dealing with a film that has a $20-million revenue potential, if the studio can effect a savings of 28% on taxes and see an improvement in E.U. Territorial Sales of 15%, the net results literally translate into multiple millions of dollars.

Why are so many major corporations establishing EU offices in Ireland?

For those who have asked "Why Ireland?" the link below to the PowerPoint presentation on some of the benefits of organizing in Ireland are quite clear.  What this PPT neglects to address is the SALES value to a project such a "MOTHER GOOSE" in obtaining an E.U. Certification as a qualifying production.  Many territories in Europe have quota systems that provide preferential opportunities to E.U. productions, over U.S.A. or other non-E.U. sourced product.  When you add-in the benefits of lower corporate tax rates, special opportunities for expensing of capitalized costs and special allowances for Intellectual Properties, the benefits to a company such as HHSE come into focus.

http://www.idaireland.com/news-media/publications/library-publications/external-publications/Why%20Ireland_mop.pdf