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Wednesday, April 16, 2014

Toys in the Attic - Strong "first day" launch at Walmart Canadian Locations!

Yesterday (Tuesday, April 15) was the initial "street date" for TOYS IN THE ATTIC to hit the shelves at approximately 389 Walmart locations across Canada.  We were ecstatic to hear the news this morning that yesterday's first-day sales place the title inside the top 10 for all family videos ("Frozen" is # 1), and the overall top 25 selling titles across all genres.  Fingers crossed that this weekend holds strong (weekends are best for family videos, actually... "Tuesday New Release" buyers tend to gravitate toward big theatrical releases, especially action and sci-fi, e.g. "Hobbit: Desolation of Smaug").  A strong response in the Canadian locations will help in securing a re-release placement for TOYS IN THE ATTIC into the USA Walmart stores for later this summer... so we'll keep our eyes on this current activity.  FYI, the Walmart.ca website does not currently have TOYS IN THE ATTIC listed for on-line purchase... but they requested box art yesterday and told us that it's "in process" to be added to that site.  When it goes live, we'll post the link here.

Friday, April 11, 2014

HHSE Featured on "TheStockRadio" website, check it out!

Hannover House C.E.O. Eric Parkinson was interviewed yesterday for "TheStockRadio" website.  His interview has just gone "live" and will be promoted for about a week on their website (which reaches over 100,000 investors and traders in the USA, Canada and U.K.).  Nice placement!

http://thestockradio.com/hhse-hannover-house-inc-ceo-eric-parkinson/

Wednesday, April 9, 2014

VODWIZ, Inc., share structure thoughts for HHSE

The HHSE Board resolution yesterday (authorizing the formation of a subsidiary corporation, VODwiz, Inc.), sparked some discussion and inquiries about the share structure and plans for the new entity.  The purpose of this morning's blog is to answer some of the key questions posed by HHSE shareholders.

1).   Why will HHSE only own 60% of the VODwiz, Inc. stock?  This is a false question.  HHSE will own 100% of the "issued" VODwiz, Inc. stock upon initial issuance.  However, like most corporations, VODwiz, Inc. will only be releasing 6-million of the 10-million "authorized" shares initially.  So HHSE will own 100% of the ISSUED shares by having this quantity from day one.

2).   Why have a separate entity for the Video-On-Demand streaming venture at all?  The number of studios signing up for participation in VODwiz is exceeding our expectations, and the number of films to be available upon launch is headed towards being a very impressive number (we're still NOT officially "consumer launched" as of this date... VODwiz willl officially launch as a service to consumers on the day that all of the new, third-party titles go "live" to the site).  Accordingly, we're feeling that this venture is positioned to become much larger than forecast, both in terms of revenues as well as visibility and eventual operational infrastructure.  Putting all of the studio licensing agreements into the VODwiz, Inc. name serves a variety of purposes, including liability insulation for HHSE, business credibility for the venture, and a degree of separation for some suppliers that are a tiny-bit uncomfortable about participating in a streaming venture with a direct competitor.

3).   What will happen with the "unissued" VODwiz, Inc. stock shares?  Without having a crystal ball, it's impossible to say.  While there are no immediate plans for the issuance of any of the authorized (but non-issued VODwiz, Inc.) treasury stock, possible uses come to mind, e.g.:  a).  VODwiz, Inc. might become it's "own" separate publicly traded entity someday, with HHSE shareholders receiving shares in the new VODwiz Pubco (while still retaining their HHSE shares);  b).  VODwiz treasury shares might be useful in attracting a super-star level President for VODwiz, someone with a background and proven track record in the internet-site or streaming businesses (shares for sign-on or performance-based incentives);  c).  Treasury shares might be useful in securing a few "major studio" product lines to be available through VODwiz.

4).   Mobile Devices and Streaming are becoming the "New Norm" worldwide - VODwiz is positioned as a Pioneer in a rapidly growing market segment.  CISCO, APPLE, SAMSUNG and other hardware / software giants have forecasted an explosion in streaming-enabled mobile devices... up to TEN BILLION units in the coming years.  VODwiz, Inc. is  ready to ascend to a leadership role and pioneer site as a major streaming supplier due to its broad programming from more than a dozen studio suppliers.  Check out the article below from FORBES, and decide if you think NOW is the right time to put focus and energy into the VODwiz venture?

http://www.forbes.com/sites/connieguglielmo/2014/02/05/mobile-traffic-will-continue-to-rise-rise-rise-as-smart-devices-take-over-the-world/

GO HHSE!  GO VODWIZ!








Tuesday, April 8, 2014

HHSE Establishes Spanish-Language Releasing Label

Hannover House, Inc. (OTC: HHSE), a leading independent distributor of films, books and entertainment products, is expanding its home entertainment programming mix to address the growing marketplace of Spanish-speaking consumers in the United States and Canada.  Effective with the June 26 theatrical launch of the Mexican thriller, "Borrar de la Memoria," Spanish-language titles from Hannover House will be marketed under the Peliculas ¡Olé! branding for theatrical, home video, V.O.D. and television release.

Initial theatrical releases under the  Peliculas ¡Olé! label include "Borrar de la Memoria" and the Sundance Film Festival international competitor, "Asalto Al Cine."  Initial home video releases include "Tierra Salvaje" and "El Viaje Magico."  Previously released Spanish-language titles from Hannover House will be rebranded as new DVD inventories are needed.  Top selling Spanish titles previously released by Hannover House include (alphabetically):  Ahi Esta El Detalle, Ando Volando Bajo, Antonio Aguilar Colecion, Ay Que Tiempos Senor Don Simon, Dos Tipos de Cuidado,  El Rapto, La Leyenda: Germain de la Fuente y Los Angelos Negros, Macario, Rigo Tovar Una Confesion Total, Santo Y Blue Demon Contra Los Monstruos and Vivir Para Amar. 

Key accounts that will be targeted for the renewed outreach to the Spanish market include Walmart, Redbox, Target and Best Buy.

"The company has generated millions of dollars in the past through the release of quality, Spanish-language movies onto DVD," said Eric Parkinson, Hannover House C.E.O.  "The establishment of this new branding outreach, and our enhanced attention to  this growing market, should be a significant and complementary revenue stream to supplement all of our other corporate activities," he concluded. 

Hannover House was formed in 1993 as a book publisher.  DVDs were added as a product line in 2003, and by 2004, the company began dabbling in limited release theatrical titles such as “Off The Lip”, “Hounddog” and “War Eagle, Arkansas” to enhance the films’ profile for the DVD and Video-On-Demand markets.  In 2010, Hannover House licensed the Joel Schumacher thriller, “Twelve” at the Sundance Film Festival , for a sizable advance to production entity, Gaumont, of $1.75-million.  The film was released that summer to 220 theatres, and became a significant DVD and Blu-Ray hit through a distribution pact with 20th Century Fox Home Entertainment.  Hannover House also operates its own "direct distribution pipeline" to major retailers and wholesalers, and feels that the Spanish-Language label will be an ideal complement to the core activities.

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.

Monday, April 7, 2014

Hannover House book promotional outreach with Baker & Taylor Wholesale

Good Monday to our HHSE friends.  This week, Hannover House is launching a major "outreach" campaign with book wholesaler Baker & Taylor, to reach thousands of schools, libraries and independent book retailers nationwide.  The campaign includes a direct mailing, followed by telemarketing support and email follow-ups.  This is the first of FOUR campaigns with Baker & Taylor in support of Hannover House book releases, as listed below:

1).   Sable Shore, One of the Lucky Ones, Made in the USA - April 15 blast;

2).   Quietus, Sacred Prey - May 1 blast;

3).   The Verdict, Blood Money & Power - May 15 blast;

4).   Lennon Bermuda (book and audio CD) - June 1 blast;

Books releases for HHSE are generally more profitable on a margin-basis than DVDs;  however, they are also harder to place at retail as there's not as many indie booksellers anymore, and the major retailers (such as Walmart and Target) that carry hard-cover and trade-print books usually focus on the top 40 best-sellers.  Accordingly, having a major wholesaler such as Baker & Taylor supporting the Hannover House titles - and specifically reaching out to indie stores, schools and libraries (that are NOT limited to the breadth of their coverage), is a tremendous opportunity for HHSE to generate significant new revenues.

Thursday, April 3, 2014

Accounting Primer - Cash vs. Accrual Accounting for Film Distributors / Studios

Greetings HHSE Friends - Although this issue should be obvious to most - and although we've addressed it several times in the past to "'splain it to Lucy" and others - we still occasionally get emails or inquiries about how Hannover House (and other film distributors) account for sales, revenues and profits.

There are two principal methodologies for recording revenues under the "Generally Accepted Accounting Principles" as practiced by the major USA accounting and audit firms. 

1).  CASH ACCOUNTING is the way that most individuals or small businesses "account" for revenues.  For instance, if you operated a "COFFEE SHOP" (as an absurd example), you would likely record all of your $1 sales of coffee on a "cash" basis, then deduct all of your direct costs of supplies and operations to determine your "pre-tax income."  That sort of cash-basis accounting is perfectly fine for small businesses and individuals who don't have significant "contracts receivable" for substantial amounts due to the business in the future.

2).  ACCRUAL ACCOUNTING is the way that most manufacturing businesses, video distributors or larger entities with "contract receivables" account for their activities.  For instance, when Hannover House licenses a movie (such as "All's Faire In Love") to Netflix for subscription streaming... their contract payment of $250,000 is made to Hannover House through twelve (12) equal quarterly installments (e.g., the payments are spread out over the 3-year license period for the title's initial subscription rights sale).  Hannover House will "recognize" this sale as it happens... then slowly collect the revenues over the term of the agreement.  As another example, international presale contracts can be "recognized" as executed, although the cash-flow from those forms of sale is not generated until the movie is actually delivered to the purchasing entity.  An airplane manufacturer such as Boeing / Spirit Aviation might immediately "recognize" ("book") the revenues from a $50-billion contract for jet planes, even though it might be years in the future before the actual delivery of planes occurs and the payment is rendered;  meanwhile, they can expense the tools, staff and manufacturing costs related to that sale, as it has already been recognized as an offset to the revenue portion of the transaction.

It has been no secret that Hannover House incurred a lot of debt in 2010 with the acquisition and release of the film "Twelve."  It has also been disclosed that the company is choosing to immediately reinvest as much "surplus" cash flow as possible in release activities (growing our revenues, stature and bottom line with more DVD, Book, VOD and International releases).  Managing the old debt, maintaining the operational overhead, and investing in an enhanced release slate are all drains on the company's cash flow resources.  Confusion has occurred when some shareholders look at the consistent (and growing) profitability for HHSE and assume that accrued sales to Netflix (for instance) equals immediate cash-in-hand today.  Unfortunately, it doesn't work that way.

If Hannover House selected an amount of cash to "sit on" (such as $250,000 to have "on-hand" at any given time, but simply not ever touched), this would not be a good use of the capital in Management's opinion.  There are income producing opportunities and releases requiring modest investments, and it's arguably bad-form to sit on cash when some creditors have been patiently accepting small payment installments over the past few years.  The HHSE management treats cash with great respect.  We use it to build the business with new releases, while balancing the obligations from the past with the current operational needs. 

On an accrual basis, Hannover House is consistently profitable - and it's likely to grow exponentially this year.  But on a cash basis, if the company is ever significantly CASH RICH, then we're probably missing out on growth opportunities to benefit shareholders... and this philosophy of reinvesting all reasonably available revenues should persist at least until HHSE achieves the level of $100-mm per year in revenue turnover.

If cash-vs.-accrual accounting is too complicated for some people to understand, perhaps they are better suited to invest in a neighborhood coffee shop... something that doesn't require much brain power to follow and accurately analyze. 

Hannover House is competing in the same arena as media giants, and the company is surviving and growing without the huge resources that a Comcast or Sony can access.  The upside for our shareholders is phenomenal, and the ability to reach such goals is realistic and proven through the prior successes of CEO Eric Parkinson (as C.E.O. of Hemdale, e.g. "Terminator", "Platoon", "Hoosiers") and D. Frederick Shefte, Esq. (as a partner in the prestigious San Diego firm Seltzer, Caplan, Wilkins & McMahon). Thanks to our many, legitimate shareholders and supporters, this is going to be a very exciting summer and year for HHSE.






When Payback is the Only Option... things can get "GRIM"

Here's a kick-ass urban-actioner that will do great business for Hannover House on DVD and BluRay this August:  "GRIM" - from director Matty Johnson.  This edgy, graphic-novel-style thriller delivers the action, the suspense, the violence and the good-triumphs over evil ending.  The bad guys think they're smart... they think they can screw around with reality forever... but one day, when they are not suspecting it, all hell falls upon them in the form of the Grim Reaper - a SWAT Team officer who refuses to be constrained by the limitations of due-process anymore.  "GRIM" follows the tradition of feel-good vigilante thrillers such as "Death Wish" and "Ransom," where the bad guys get what's coming to them and the good guys ALWAYS prevail.  Go HHSE!!!