Friday Updates on HHSE & Various Projects

Good Afternoon HHSE Friends & Followers - here's a quick summary of a few key items of interest.

1).  BONOBOS / SONY - Street date is August 7, and the HHSE shipments were received in time and in good condition; great way to start this important wholesale relationship for physical DVD release.  Additionally, placements for Video-On-Demand (also Aug. 7) are across the board at all major sites...

2).  AUDIT UPDATE - HHSE received a request from the auditors on Tuesday for additional backup detail on the net positions for the company's back list library (as these figures impact both the "royalties payable" balance sheet entry, and the "producer recoupment" balance sheet entry).  Staff is on this task already. 

UPDATE:  HHSE provided back-up for 117 titles to the auditors  on Monday - which fully satisfied this back-up document request. HHSE videos or products generating less than $10,000 in gross sales during the prior three years were excluded from this additional endeavor. ONE HUGE STEP CLOSER!. Also, for what it's worth, HHSE has engaged a very seasoned auditing firm and securities counsel for the Form 10 registration project. We are completely confident in their competency and direction to HHSE as to what items and issues are required for a Form 10 registration and expeditious acceptance. 

3).  THE RIOT ACT - Terrific response & support from key theatres after providing the V.I.P. screening link to this period-thriller.  Film opens Sept. 14.  Screen count is still being determined, but looks like at least TEN (10) locations within the State of Arkansas due to the historic basis of this film premise (based on a true incident - a murder - at the King Opera House in Van Buren, Arkansas). Other key markets include NYC, LA, CHI, PHIL, DFW and SF Bay Area.

4).  DOGPATCH USA - This whimsical documentary about the now defunct theme park in Arkansas will benefit from some licensed character support and promotions from the classic Al Capp comic strip, LIL ABNER.  This film will open in theatres on Sept. 28.

5).  OTHER UPCOMING VIDEO RELEASES - Activities are well underway for the forthcoming home video and V.O.D. releases of:  AMERICA UNITED, DAISY WINTERS, GETTING GRACE, HEXED, RIDE UNITED and TRINITY.  More details, packaging art and promotional support will be posted to this blog over the next few weeks.

6).  MYFLIX UPDATES - New title acquisition and on-boarding continues for the forthcoming launch of this exciting new digital streaming platform.  Consumer promotional campaigns are in the design / implementation stages for a coordinated launch. HHSE C.E.O. / MyFlix senior executive Eric Parkinson has been invited to participate in an industry panel at the upcoming MIPCOM Television Conference to discuss "The Big Shift" of entertainment from theatres, video and television over into the emerging digital streaming platforms (especially with the next generation of media consumers). MyFlix represents the RIGHT business model at the RIGHT time for HHSE!

7).  TWO NEW PRIVATELY FUNDED FEATURES - HHSE has been approached by private investors to finance both the PRODUCTION and the DISTRIBUTION of two commercial film projects. These ventures came about in large part as a result of the superb quality of THE RIOT ACT production in Arkansas, which is generating good "buzz" among the local investment community. Watch for more details on this blog within the next month. 

SONY Design Team presents HHSE with Video Concept art for "SLEEPER CELL" (f.k.a. "The Algerian")

Good Morning HHSE Friends & Followers - Now that we have gotten past the initial DVD release launch through SONY, we are moving ahead on additional titles, including our 2015 theatrical release of "THE ALGERIAN."  In order for the movie to NOT sound like a foreign-language film to consumers, the more timely title of "SLEEPER CELL" has been chosen as the primary Video release title.  Listed below are FIVE (5) new campaigns provided to HHSE from the SONY design team, each of which seems visually stronger for a DVD box size than our prior theatrical release art.

We don't yet know which of these will be selected by SONY - or if a new concept or variation will be the final choice. But we are definitely impressed with the variety and impact from each concept.

CHEERS!  HHSE!


CAMPAIGN 1

CAMPAIGN 2

CAMPAIGN 3

CAMPAIGN 4

CAMPAIGN 5

The Characters from "LIL' ABNER" Comic Strip - come to life in DOGPATCH USA Film

Greetings HHSE Friends & Followers - The Al Capp comic strip "LIL' ABNER" was a worldwide hit in the 1960's and 1970's - with millions of daily readers, and eventually, it's own THEME PARK known as DOGPATCH USA.

Hannover House has entered into an agreement with the producers of "Dogpatch USA" for a limited theatrical release and servicing arrangement for videos into Walmart for the holiday collector's season. This impressive documentary tells the history of the Arkansas-based Theme Park, and it's unusual genesis and eventual downfall. Watch for more details - including new POSTER ART and TRAILER here soon - along with additional details on theatres that will be showing this documentary feature.

https://www.facebook.com/DogpatchUSA.documentary/

* * * * *

In other HHSE / MyFlix news:

1).  BONOBOS DVDs will hit stores in August through SONY - shipments now in progress!

2).  HHSE Q2 Filing has been formatted and submitted to our auditors to provide the most current "reporting period" data for the Form 10 filing.

3).  AMERICA UNITED (the star-studded concert event from ABC Television, featuring Janet Jackson, ZZ Top, Snoop Dogg, Clint Black and many other superstars), will be released in early November to DVD, to coorespond to VETERAN'S DAY promotions.

4).  THE RIOT ACT has a new theatrical launch date:  Friday, Sept. 14 in NY, LA and other key markets. Watch for new trailer and poster art to be released in the next few days.

5).  ON-BOARDING / UPLOADS for MyFlix titles continues at a solid pace, while the visuals for the home page and title-genre' pages continue toward final tweaking.

MORE-TO-COME!!

Snapshots of typical day at Hannover House / MyFlix

Greetings HHSE Friends & Followers - while "Friday the 13th" is a rare calendar event, for all of us on the HHSE / MyFlix team, it's just another day in paradise!

Here's some snapshots from around the office and at the printers - showing some of our team and the sort of activities that we often handle each day.

HAVE A TERRIFIC WEEKEND!

Friday Morning started with another PRESS CHECK, this time for "BONOBOS" DVD Wraps, designed specifically for the "RENTAL" home video market (serviced by SONY).  HHSE Designer JON McCALLUM hams it up on the Just-Us Printers control panel after HHSE C.E.O. ERIC PARKINSON comments to the press team on color densities for visual impact.

Back at the office - in living proof that "ADVERTISING WORKS" - HHSE office manager MARYEVELYN JONES marvels at this month's "QUIETUS" ad in STRAND MAGAZINE, while HHSE President FRED SHEFTE rolls up his sleeves and helps with the fulfillment of HUNDREDS of copies of re-orders for BARNES & NOBLE STORES of this popular selling HHSE item!  Office Delivery Notification Expert (aka "Coco the dog") wags his approval of the company's ongoing success at sales!

But there's so much more to do on the core activities everyday.  Today involved:  new artwork updates from the SONY design team for ALGERIAN ("Sleeper Cell"), GETTING GRACE and THE LENNON PROJECT... video packaging design work for SPICES OF LIBERTY, the star-studded AMERICA UNITED and the insane Redbull Moto-Cross extravaganza RIDE UNITED.  The selection of images for both the front and back art of DVD and BluRay releases is very crucial to converting a browsing shopper into a purchasing consumer!

AND LAST BUT NOT LEAST... the ongoing "on-boarding" of approximately thirty titles PER DAY to the data-bank for the MYFLIX streaming site... ranging from Major Studio theatrical hits, to specialty independent films in a wide range of genres:  Action, Adventure, Animation, Christian, Classics Comedy, Drama, Family, Foreign, Full Contact Sports, Horror, Manga, Science-Fiction and Television Episodics to name a few! -

JUST ANOTHER DAY IN PARADISE, aka HANNOVER HOUSE / MYFLIX !

Update on HHSE Litigation Moves and Resolutions - Along with Additional News Bits

Happy Friday-the-13th to our HHSE Friends & Followers - Firstly, we want to congratulate director MARCEL WALZ on the opening week digital streaming success of his film, "BLOOD FEAST" - which has been in the top 10 for ALL new release horror titles streaming this week... a terrific start for "Blood Feast" and HHSE!  The launch of the Digital release is also very well-timed for the upcoming COMIC-CON show in San Diego - where Marcel will be signing autographs and "Blood Feast" posters on Friday, July 20 at 2:30-pm.

https://comiccon2018.sched.com/overview/type/U%3A+Updated/Individual+Signing

Hannover House C.E.O. Eric Parkinson with "Blood Feast" Director MARCEL WALZ

Next - and as mentioned in an earlier blog - HHSE has been active in prevailing, settling or otherwise progressing in cleaning up the company's balance sheet and other disputes. The purpose of these activities is to eliminate litigation, strengthen the company's balance sheet and generally improve the overall optics of HHSE as the company emerges from S.E.C. Registration and the simultaneous launch the highly-anticipated MYFLIX digital streaming venture. Over $5-mm in debts have been paid, settled or otherwise retired by HHSE over the past few years - and strategies are in place for all of the company's major creditors.  Most of the nuisance lawsuits have already been adjudicated in HHSE's favor or otherwise dismissed.  There are three currently active litigation matters that are in motion, for which shareholders are seeking status updates.

1).  UPTONE RELEASING ("Union Bound") - HHSE has complied with all of the terms of the settlement agreement except a final release of unsold DVD returns (which requires the cooperation of wholesaler, Cinedigm Entertainment).  HHSE has paid Cinedigm for costs and handling fees associated with the release of unsold merchandise, and we anticipate that these DVDs will ship to UPTONE by mid-next week.  Upon receipt of merchandise, the settlement agreement will have been satisfied and proper court filings are required to be completed by Uptone's counsel in order to have this issue fully vacated and closed. 

2).  CRIMSON FOREST - Plaintiff's counsel has extended to named Defendants a 21-day extension of time to file a response, based upon improper service.  A clerical default against three of four named Defendants will be vacated following the formal motion, including failure to file a Motion for Default, failure to provide evidence of proper (legal) service, failure to notify Defendants and the written agreement by Plaintiff's counsel to HHSE for a 21-day extension as of July 10 (providing until August 1 for a responsive filing). HHSE's cross complaint integrates the Crimson claims with the overall merger and financing agreement, and HHSE will seek to enforce the financial terms of the merger agreement, calling for a minimum of $1-million prior to May 15, 2017 (which Crimson did not pay), and additional financial damages of more than $3-million caused to HHSE and HHSE shareholders as a result of Crimson's breach of the merger and financing agreement. Per the terms of the March 8 Merger Agreement, and as filed with the S.E.C., disputes regarding the merger must be adjudicated in California, under California law. Accordingly, HHSE counsel feels that a cross-complaint in the Crimson matter is one of our responsive options - or alternatively, that a separate action can be filed by HHSE against Crimson for their breach of the merger and other acts that otherwise negatively impacted against HHSE (all of the strategic actions and decisions in this matter will occur prior to the August 1st filing date). 

3).  ORIGIN RELEASING - HHSE's counsel filed a variety of motions and objections in the past two weeks, one of which contained an embarrassing typo in which HHSE was erroneously listed as the "Plaintiff" instead of as the "Defendant." While this attorney error did not appear to impact the accuracy and validity of the remainder of the filings, it does provide yet another example of why the HHSE "going forward plan" cannot include anymore micro-budgeted films from unrealistic or otherwise delusional producers. There is no financial upside to selling sub-standard productions, and the risk of irrational producers filing a lawsuit is not worth the effort. The Texas judge in the Origin case ruled that HHSE was "in breach" of the February, 2013 settlement agreement by selling videos past the six-month sell-off period (a factual point which HHSE did not oppose, and indeed, HHSE openly reported these sales). This "partial judgment" of undisputed fact does not dilute the accuracy of HHSE sales statements and payments, which are the basis of Origin's action. The HHSE Motion for Dismissal of the entire case is calendered for August 4th - and under Texas law and precedent - is expected to prevail.

AS THE MATERIAL ISSUES OF REGISTRATION AND MYFLIX LAUNCH loom near and seem likely to transform HHSE, eliminating the issues of nuisance litigation and very old balance sheet debts will improve HHSE's overall optics and appeal for new investment funds and shareholders. Watch for updates on these issues over the next few (crucial) weeks!

And finally, HAPPY FRIDAY THE 13TH!  Please do NOT look backwards into a mirror and call-out the name of "Candyman" three times... not today of all days!  Cheers!

"R" Rated Version of BLOOD FEAST launches to V.O.D. Platforms Today!

Greetings HHSE Friends & Followers - the "R" rated version of BLOOD FEAST launches today on key V.O.D. Platforms (see some of the links below) - and is already generating strong traffic and transactions.  The special UNRATED / UNCUT director's version of the film will continue to play in theatres across the U.S.A. ("only in theatres") - but may eventually find a home on V.O.D. and physical home video.  Meanwhile, fans can see MOST of the meatiest stuff with the "R" rated version, available now on these links below (and other USA / Canadian platforms and cable carriers):

ONLINE PLATFORMS:

iTunes: https://itunes.apple.com/us/movie/blood-feast/id1396933546

Shortened Link: http://bit.ly/BF-iTunes

Amazon: https://www.amazon.com/Blood-Feast-Robert-Rusler/dp/B07DPJZG35/

Shortened Link: http://bit.ly/BF-Amazon

Google Play: https://play.google.com/store/movies/details/Blood_Feast?id=v6i70mTEW-w

Shortened Link: bit.ly/BF-GooglePlay

Xbox: https://www.microsoft.com/en-us/p/blood-feast/8d6kgwxn280c/0001

Shortened Link: bit.ly/BF-Xbox

Fandango Now: https://www.fandangonow.com/details/movie/blood-feast-2018/MMVB332015DA83120EDA52B164854406A87B

Shortened Link: bit.ly/BF-FandangoNow

Vimeo on Demand: https://vimeo.com/274775102

Shortened Link: bit.ly/BF-VimeoOnDemand

HHSE's "THE RIOT ACT" is a $2-mm Production, completed for $468,000 (!!)

Greetings HHSE Friends & Followers - Last November, HHSE facilitated the production of "THE RIOT ACT" (shot on location in and around Van Buren, Arkansas), by combining financial resources of distribution presales and State of Arkansas rebates with a bank credit line. 

But one of the most valuable contributions to the film was the outstanding support received from the Fort Smith and Van Buren convention & tourism bureaus - which helped in securing wagons, costumed extras, horses, and an unprecedented "total shut down" of downtown Van Buren for a week... all at little or no cost to the production.  With 70+ dump trucks of dirt, the streets and sidewalks were restored to 1903 status, and with limited expense on art direction, the buildings of Van Buren were converted to the proper period.  The value of the in-kind goods and services is well in excess of $1-mm, and really made a huge difference with the final look of the film.

As another cost-cutting (free) expense to the production - HHSE managers (and the Executive Producers of the film, Eric Parkinson and Fred Shefte), took a quick break from supervisory duties, and appeared in a bit cameo as the local newspaper photographers.

THE RIOT ACT will open this Fall - the release specifics are still being finalized... but it's likely to follow the "Lady Bird" model, with the initial weekend focused on New York and Los Angeles.  A full-page ad in the April Cinemacon issue of BOX OFFICE MAGAZINE generated over 200 playdate offers from all major circuits and key art house / specialty cinemas across the country... so the film has a lot of theatrical options available. 

Pictured below are HHSE CEO Eric Parkinson (with a temporary "period goatee") and President Fred Shefte - on the SONY Pictures Studio lot, on the RIOT ACT location, and in character as 1903 Newspaper photographers. 

Myflix - Brand Positioning for the New Media Marketplace

Greetings HHSE Friends & Followers on this lovely Fourth of July mid-week holiday! As we move into third gear for our ramp-up of the MYFLIX streaming site and portal, it is helpful to look at the current marketplace to help determine our POSITIONING and PROSPECTS for the venture.

First of all, let's look at the economic benefits of this streaming venture, as compared to the "current" film distribution model for HHSE / Medallion (which has been heavily weighted towards physical DVD sales since our first hit DVD title - "I Gotta Go" - in 2003).  When we place a title like BATTLECREEK or LOST IN THE PACIFIC into retail outlets, the company has to advance a significant amount of capital upfront for the manufacturing and freight costs to fill the retail shelf space allotted for a particular title. The larger the initial orders, the more that HHSE's capital is tied-up into inventories.  While the wholesale pricing of most $14.95 suggested retail priced DVD titles is around $7, and the manufacturing and fulfillment for these is around $1 per unit, initial shipments of 30,000 units to retailers does tie-up a lot of working capital... and is often not returned into cash flow to the company for four or five months (i.e., allowing for the time to manufacture, ship, stock the shelves, determine net consumer purchase quantities, settle the balance of unsold returns, and finally have the retailer pay the net sales to the supplier).  

At any given time, significant amounts of capital are being captured into fulfilling inventory for retailers, spread over four-to-five months of a multi-title release slate.  It's expensive to be in the physical DVD and BluRay distribution business... and even more burdensome when a title is widely placed with retailers!

Both of these costs (manufacturing expenses and payment delays) are functionally eliminated with the V.O.D. streaming model.  There is no cost for replicating and shipping DVDs and there's no multi-month "wait" for payment (V.O.D. transactions occur directly with consumers via credit card or bank debit, and are paid in DAYS to the streaming service sites, as opposed to MONTHS for traditional retail distribution).  So, in this respect, a shift away from physical DVD / BluRay sales in favor of streaming revenues will significantly reduce the amount of operating capital tied-up at any given time for HHSE / Medallion.  The company is basically moving AWAY from a cash-intensive model, and into a "fast-cash flow" delivery model.  The company's cash flow IMPROVES under such a digital-streaming distribution model.

Some shareholders have asked, WHERE do we see the MyFlix brand falling within the scope of competitive options for the S.V.O.D. space?  In order to best answer such a question, let's take a look at the principal Subscription-based entertainment streaming suppliers servicing North America:

NETFLIX is the 900-pound gorilla, with over $1-Billion in monthly subscription revenues.  Amazon is a distant second place, with HULU in third, and HBO NOW targeting to close-in on $100-mm in monthly revenues by early 2019.

The comparable suppliers to MYFLIX are most likely viewed as ACORN.TV and FILMSTRUCK.  Acorn has a mix of British TV programming, PBS and Urban features with an impressive 710,000 monthly subscriber base after less than 5-years of operations.  FilmStruck launched just last October, and already has over 250,000 monthly subscribers generating about $2.8-million in monthly grosses.  VRV is a label consolidator (not unlike MyFlix) and they represent a handful of specialty labels, primarily on a non-exclusive basis (MyFlix will have MANY of the same titles that VRV is offering). UFC and SCREAMBOX are specialty subscription channels (wrestling / horror).


Based on the MyFlix revenue-sharing model with our 30+ program supplier labels, the venture should be operating in a cash-flow-positive mode after only 15,000 Monthly Subscribers - which is a revenue level so far below these other principal SVOD sites that it boggles the mind to try to justify any forecasts which do not significantly exceed this threshold. 


The variable costs impacting the MyFlix launch and growth is MARKETING and ADVERTISING.  How does the company build brand-name visibility and awareness with consumers in a cost-effective manner?  Obviously, the company is not looking to rely on word-of-mouth, but is also not planning to buy a multi-million-dollar Superbowl TV commercial. The company's MyFlix marketing plan is extensive, creative and is designed to deliver tens-of-millions of consumer impressions at a very cost-effective level. The launch campaign includes paid internet ads and banners onto high-traffic sites catering to film consumers... other major support activities include extensive "barter" web placement activities, social media outreach, taste-maker and influencer campaigns, traditional publicity support and viral-style videos designed to build the MyFlix brand.


After reaching the cash-flow-positive threshold, MyFlix will work to expand its subscriber and user base through ongoing marketing and advertising - as well as a robust program of NEW TITLES to be added at over 300 per month. In short order, HHSE believes the site has the elements and panache' to become an entertainment brand name and a hugely popular destination portal.

Hannover House has been operating continuously since 1993 - initially in the Book publishing business, then into DVD when the opportunity arose, then later into theatrical, international and into feature film production as conditions in the marketplace suggested that HHSE take steps to EVOLVE in order to THRIVE. Now, with the digital streaming frontier wide-open ahead of us - and 30+ supplier partners (collectively with over 10,000 feature films and 2,000+ hours of television programming) - MyFlix will be among the largest of libraries for consumers to browse and access through this delivery breakthrough of digital streaming media.

MyFlix is the main reason why there is wide-spread enthusiasm among smart and visionary investors who recognize what a huge deal this site has become... and what a massive turning point this represents in the long history of Hannover House.  




Watch this space!