College Football Madness... just a few weeks away!

Yes, Sports Fans... it's "that time of year" coming at us quickly... the launch of the College Football Season!  Hannover House is proud to have partnered with IMG College Sports (and the University of Arkansas Athletic Department) to present the first in a planned series of S.E.C. and top college team pre-season football videos.  The Arkansas Razorbacks Football 2013 DVD will be launched in mid-August with premium in-store placement at Wal-Mart Supercenters and Hometown Markets, including checkout aisle displayers at many locations (see display design below).  With print-edition team guides selling tens-of-thousands of copies each year... there's a building enthusiasm that the same concept transferred to DVD will be popular with consumers.  As the fans down in Wal-Mart-land like to cheer, "GO HOGS!"

ARKANSAS RAZORBACK FOOTBALL 2013 - 93 Mins., Color, Stereo, $14.95 srp

 

 

VODwiz Emerging as Indie Film Powerhouse

News is breaking this week (and next) about exciting new developments and supplier partners for VODwiz, the indie studio Video-On-Demand Wizard site from Hannover House (and Nanotech Entertainment).  The logo before your eyes is poised to become a brand-name icon... and you were there first!  We extend thanks to all of those "shareholders of vision,", who have the wisdom and ability to see both the present moment as well as into the near-term future.  Go HHSE!

From Holocaust Survivor... to French Resistance Fighter... "ONE OF THE LUCKY ONES" is an incredible and true story.

NPR's Kyle Kellams (KUAF-Radio) conducted an in-depth (and moving) interview with World War II survivor Nicole Holland and her daughter and co-author Brenda Hancock, which aired on regional radio stations throughout Arkansas yesterday.  Excerpts from this interview will be edited for national NPR placement in support of their new book "ONE OF THE LUCKY ONES," which will be in bookstores July 23rd.  If you'd like to hear the interview, click on the link below to KUAF Radio.  The interview is contained within the Ozarks At Large story from Monday, July 8th, and begins at 22-minutes into yesterday's program.

http://www.kuaf.com/content/monday-july-8-2013

A Brave New Media World...

Although it predates my time, I still recall my father’s stories of when Television launched in the early 1950’s, and replaced radio as the medium for mass entertainment.  This sea-wave of change created great turmoil in the advertising worlds, but within the entertainment industries, the Radio Giants quickly adapted to become the Television Giants (ABC, CBS, NBC).  And while the transition from Black & White to COLOR TV was seismic in the eyes of consumers, again, the existing “major media players” remained the powerhouses controlling TV entertainment and the lion’s share of media revenues.

It wasn’t until the 1980’s – when cable TV began to emerge – that new media giants were born.  Then, just a few years later, the emerging home video industry spawned an explosion of new media companies… leading to today’s transformative video-on-demand platform that is finally enabling indie studios to compete one-on-one with 100-year old media giants.  VODwiz and the associated VODwiz IPTV Channel are the Hannover House windows directly to hundreds-of-millions of consumers… direct delivery to consumers of our movies (and titles from many other suppliers), with no manufacturing costs, no shipping, no middle-man fees and no time-delays for payment.  Watch “what you want, when you want it” is no longer a slogan, but a reality that VODwiz is making possible.

So what’s next?  For Hannover House (and our technology partner NanoTech Entertainment), we think that “4k TV” is the next transformative media platform… a high definition picture so clear and detailed that it makes today’s HD screens feel like a Black-and-White relic.  If you haven’t had a chance to see a 4K image, you’ll have to accept our observation that most people’s jaws literally drop open in awe!

Parallel paths will be pursued for the launch of 4k in America.  An effort to assemble and create 4k programming needs to occur hand-in-hand with the retail placement of 4k players and screens.  Hannover House is already taking active steps on both fronts – with top tier titles set for 4k remastering and VODwiz studio partners being pursued for additional 4k titles (on the programming front), with hardware and package configurations through NanoTech set for mass merchandiser presentations and 2013 retail availability.  It’s like the launch of the Sony Walkman, on mega-High-Def-steroids.  Very exciting, very cutting-edge, and HHSE is well ahead of competitors on this pioneering front.

On other matters, some shareholders have asked for more details on the eBook “BookTV” format launch – which deserves a lengthy blog on its own.  But for brevity, we’ll pose a hypothetical question: 

Do you think a 19-year-old college student is going to prefer to pay $99 for the purchase of a seven-pound textbook to lug around all semester – or $19.95 for the same “information” delivered digitally to their iPad or mobile device?  What if that digital version also contained active links to reference websites, video clips and expert demonstrations?  Which is the better, more thorough, more convenient (and less expensive) way to deliver textbooks or entertainment books (for that matter)? 

The textbook industry in America is a $10-billion annual market… the HHSE / NTEK Book-TV format makes textbooks better and less costly… both indicators of a terrific opportunity.  Sure, book wholesalers and even campus book stores will be threatened by this improvement in textbook delivery, but it’s a brave new media world.  Adapt and thrive – or ignore the coming wave and perish.  HHSE is very excited about this moment in time, and our position and direction in the digital-entertainment and digital-information age.

—ERIC PARKINSON, C.E.O. Hannover House

Tax Programs Spark Arkansas Film Production

As the only company in N.W. Arkansas with a full-service Grip & Electric truck and equipment package for motion picture production, Hannover House has enjoyed a spike in demand recently... sparked by the newly enhanced Motion Picture Tax Incentives for Arkansas-based productions.  Today is the first day of principal photography for "VALLEY INN" - just days after the completion of "THE RECRUIT" and a few weeks after the wrap of  "GREATER" (all of which utilized Hannover House production services equipment).  When HHSE shareholders ask what is meant when we describe ourselves as a "full-service" entertainment company, we mean that (like Paramount or Sony Pictures), we have the full range of services and capabilities (from the physical production of films through the actual distribution of entertainment programming through all major media channels, without requiring third party suppliers or service providers).  Just FYI... stay tuned...

OMG! NanoTech and VODwiz are AMAZING! (beta-test mode)

We just watched a beta-test streaming of a Hannover House movie from the Nanotech hosted VODwiz IPTV Channel.  What an impressive and inspiring experience!  The picture and sound quality were superb, the streaming was uninterrupted and to see the VODwiz LOGO on the Roku home page next to NETFLIX really underscores the vast potential that this channel and VOD streaming site pose:  thousands of titles (most which are NOT available through other VOD portals) will be available to consumers to watch on a pay-per-transaction basis (at competitive or better pricing models than Amazon, VUDU, HULU, etc...). 

It felt like the first time that the "Cable News Network" (CNN) was delivered on cable 30 years ago... or the first time that the Yahoo! site was posted to the internet in the early 1990's.  The VODwiz experience looks and feels MONUMENTAL!  Thanks to the technical wizards at Nanotech Entertainment for bringing to life our vision of a vast library of movies for streaming directly to homes and to mobile viewing devices.  The site is still in the beta-stage at present, but we can see the "live" date approaching soon!

Shareholder questions about pricing tiers and operations...

Hannover managers have received a variety of questions from shareholders regarding the Company's policy on tiered-pricing structures for key accounts, and how this corresponds to industry practices and / or fair-trade rules.  So here's the short answer to an otherwise complex, if not mind-numbing, pricing policy.

For DVD's and Blu-Ray units, "list" wholesale pricing by category is as follows:

a).  Direct Retail purchasers:  45% off suggested retail;
b).  Two-Step Wholesalers for Schools & Libraries:  50% off suggested retail;
c).  Two-Step Wholesalers providing "rental ready" or stickered products:  55% off suggested retail;
d).  Internet Sellers purchasing less than $20,000 per year:  50% off suggested retail;
e).  Internet Sellers purchasing more than $20,000 per year:  55% off suggested retail;
f).  Subscription outlets (e.g., Netflix):  60% off suggested retail;
g).  Mass Merchandisers requiring "retail ready" and purchasing $500,000 or more per year (e.g. Walmart):  65% off suggested retail;
h).  Kiosk retailers purchasing $250,000 or more per year, and not requiring full packaging (e.g. Redbox):  75% off suggested retail;

The above discount structures are comparable to all major home video suppliers / indie studios.  From a practical sense, how might this look on a specific title basis?  Let's use ZOMBIE WARZ as an example.

	Approx	Avg.		Percent
	Units	Wholesale	Sub-Total	Of Total
Direct Retail Buyers	150	$             8.22	$             1,233	0.48%
Two Step Libraries	400	$             7.48	$             2,990	1.16%
Two Step Rental Ready	600	$             6.73	$             4,037	1.56%
Internet (Small Accts)	100	$             7.48	$                 748	0.29%
Internet (Large Accts)	500	$             6.73	$             3,364	1.30%
Subscription Units	400	$             5.98	$             2,392	0.93%
Mass Merchants	25,000	$             5.25	$        131,250	50.77%
Kiosks	30,000	$             3.75	$        112,500	43.52%
	57,150		$        258,513

Clearly, in this particular scenario, a mass merchant (such as Walmart) and a Kiosk outlet (such as Redbox) comprise 94% of the total revenue streams.  Other items - such as "Toys in the Attic" which has been especially popular with Internet sellers, as well as with Schools and Libraries - has a revenue model that's more evenly spread away from mass merchants and kiosks. 

From the standpoint of rationalizing the different pricing for different categories of purchasers, it's most easily represented with Redbox.  The first photo below shows a partial shipment of 18,000 "DVD discs only" of "ZOMBIE WARZ" for Redbox.  The second photos shows a ROW OF PALLETS that were required to ship the same quantity of units of "PINK SKIES" for WalMart.  Clearly, from a standpoint of space, weight and freight, it's significantly cheaper to ship "discs only" than to ship fully packaged DVDs.  Additionally, the savings from not having to create four-color wrap inserts, plastic shell cases, security EAS stickers, top spines and shrink-wrap, add to the savings enjoyed on a kiosk sale vs. a standard mass merchant retailer sale.  Of course, with Video-On-Demand, even the disc manufacturing and freight costs are eliminated!  But that's the subject of a blog for another day.