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Warner Bros. to close straight to video unit as home entertainment migrates online

Warner Premiere will be folded into Warner Bros.' digital distribution department, with "single digits" of employees losing their jobs.

Warner Bros. is to close its direct-to-video outfit Warner Premiere this summer due to the collapse in DVD sales, as the home entertainment industry migrates online.

Warner Premiere will cease to become a stand-alone department and will instead be integrated into the production company’s digital distribution and animation unit, with Warner Premiere employees set to be transferred to other departments within the organisation. The closure will impact a “single digit” number of employees, a source told TheWrap.

Launched in 2006, the division focused on producing films that bypassed a theatrical release and targeted the stay at home film-watching audience. The straight-to-DVD market was, for a time, highly-lucrative, with films like Christian Bale’s The Machinist – which grossed less than $1 million on a miliscule cinema release – making more than ten times that on DVD.

Usually, though, straight to DVD was an arena of sequels or spin-off franchises, with the most notable films released by Warner Premiere including Ace Ventura Jr: Pet Detective (2009), The Dukes of Hazzard: The Beginning (2007) and Free Willy: Escape from Pirate’s Cove (2010).

As a BBC Worldwide Exec told movieScope recently: “With a staight to DVD release, a studio can decide to make a sequel that exploits the cache of an existing brand. American Pie is the obvious example. There are about nine American Pie films once you include all the spin-offs, and that’s not even including the original cast. There’s an acceptance the films won’t be good enough for a cinema release, but they are made in the hope that rental sales will be strong on the back of the original.”

But Warner Premiere failed to catch the wave with their straight to DVD department opening relatively recently in 2006, as the home entertainment market was just beginning to suffer. Last year saw rises in home entertainment revenue for the first time in seven years, due to a whopping 81 per cent rise in online streaming. DVD sales continue to fall sharply.

“Given the continuing decline in the direct-to-video film market and shifting business models in the production of digital series, the decision was made to close Warner Premiere,” the studio told TheWrap. “The division will continue and complete production on its remaining film and digital series project into the Fall.”

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