FAMILY MOVIE DEMAND SPARKS MOONBEAM

CLEVELAND -- Demand for family movies is fueling the growth of the direct-to-video Moonbeam Entertainment label, said Charles Band, chairman and chief executive officer of Full Moon Entertainment, Los Angeles. Full Moon, which produces fantasy movies with more adult themes, launched the Moonbeam label last year with the successful "Prehysteria!" to tap the family market. The live-action dinosaur title

CLEVELAND -- Demand for family movies is fueling the growth of the direct-to-video Moonbeam Entertainment label, said Charles Band, chairman and chief executive officer of Full Moon Entertainment, Los Angeles. Full Moon, which produces fantasy movies with more adult themes, launched the Moonbeam label last year with the successful "Prehysteria!" to tap the family market. The live-action dinosaur title is believed to be the top-selling direct-to-video rental release to date, said Band. Full Moon titles are distributed by Paramount Home Video. By next year, Band hopes Moonbeam will be releasing one title per month, as the company does with the Full Moon label. "We are trying to put at least half of our energy and time in the direction of Moonbeam," he said. Band spoke here during a 12-city road show tour, where he demonstrated his company's special effects, costumes and puppetry to retailers. "This road show has confirmed, through the several hundred video retailers that we are meeting, that the biggest void for them and their consumers is fantasy films for the family and for kids," said Band. " 'More of these titles are needed.' That is the outcry from every stop," he said. There is a "huge" potential for the Moonbeam titles in supermarket video rental departments, said Band. "We are in a pretty good position because our pictures are relatively tame. We are not making slasher movies or really horrific films. While it is true that some of the Full Moon films may not be right for the supermarket shelf, Moonbeam is just made to order for families," he said. The company has four Moonbeam titles planned for release this year. "Dragonworld" will be released on July 27, followed by "Prehysteria 2," "The Pet Shop" and "Beanstalk," which will be based on the "Jack and the Beanstalk" fable. From sales presentations to supermarket buyers, "the early reaction to 'Dragonworld' has been fantastic. We did real well with 'Prehysteria!' and 'Remote,' so I think Moonbeam is such a perfect candidate for that market," he said. While Full Moon has been a leader in the direct-to-video-rental market, other companies see opportunities in direct-to-video sell-through. Disney has helped focus attention on this market segment with the success of "The Return of Jafar," which was released at sell-through pricing direct to video retailers, and has sold about 7 million units so far. MCA/Universal Home Video also has some direct-to-video titles in the works, including a "Darkman" sequel. "A lot of other shows are about to premier at your local video store. Suddenly this video venue is becoming more respected, and it is becoming a happening thing," said Band. "But, as usual, when the majors start seeing the possibilities in it, there will be a glut of product. That is something we also have to be careful about because the retailers only have so many dollars to buy," he said.

"The video business is a $15 billion business. The theatrical business is a $5 billion business. A lot of people aren't aware that the video business, both rental and sell-through, is three times the theatrical business. It's still called an ancillary market, but it's the biggest slice of the pie," he said. Band plans to continue targeting the rental market with initial releases, with later repricings to sell-through levels. "All the Moonbeam titles will be out at sell-through after a short rental life. We are coming out with 'Prehysteria!' at a sell-through price in October," he said. The company has no plans to release its Full Moon titles at sell-through prices, he added. Full Moon had tried this a few years ago, but it cannibalized sales of the new releases, said Band. A result of this direct-to-video-rental strategy -- and the company's unique products -- is that the Full Moon and Moonbeam labels are starting to achieve brand recognition with consumers, he said. "We are lucky that, other than Disney, there is no other film label that has any meaning for fans," he said. In the past, major studios would put an identifiable "stamp" on the movies they produced, but this has changed. "All the other major companies and independents are now releasing organizations," he said. Because of difficulties getting his products reviewed, Band plans to start releasing some of the company's better titles to theaters in a limited number of cities. "We want to release them in the top 10 to 15 markets and end up with some good reviews. That will help pave the way for them on video. But our core business clearly will remain direct-to-video," he said. Disney's success with "Jafar" also may help get more direct-to-video titles reviewed, he said. "If nothing else, "Jafar" is going to be responsible for getting a lot of people who would otherwise never review a direct-to-video film, to take notice," Band said. Band sees a period of rapid change ahead for the video business. "I think our whole future is going to be in the 5-inch format -- interactive video, CD-ROM, audio and movies. It is going to be one of those real quick revolutions just like, all of a sudden, no one was playing vinyl record albums anymore," he said. "The theatrical movie business will be more and more for the big event movies. That is happening now, and that's why the majors are looking at different venues to premier smaller pictures, like home video, cable, pay per view and all the other stuff that is going to happen," said Band. "The whole world is changing. It is shape shifting into God knows what, but it won't be the same in a few years. And I think we are definitely the tip of the iceberg when it comes to direct to video," he noted.