Film Studios Can 'Cannibalize' Their DVD Sales, Or Lose Them Completely
from the time-warp dept
"Like music before it, and lately the book industry, major film studios are grappling with the transition from distribution of physical DVDs to electronic delivery. It is a change the studios need to make, to cut costs and curtail piracy." You'd be forgiven for thinking that line was from a story about the film business from several years ago, but it's from a piece over the weekend in the WSJ laying out that movie studios still haven't figured out this internet thing. Of course, with guys like Michael Lynton in charge, that doesn't seem too surprising. Anyway, the main point of the WSJ piece is that studios have been slow to move because they're afraid of killing off DVD sales, which still account for 43 percent of film revenues. Here's the rub, though: DVD sales are already slipping, and efforts to boost them by pushing new kinds of plastic discs on consumers aren't helping. The studios seem to believe that their content is valuable enough that they can dictate how people purchase and enjoy it, and that they'll keep on buying, regardless of how their preferences and desires change. This attitude has already shown up in the studios thinking of yanking their movies from Netflix and trying to hamper the Redbox rental service. Clearly, the idea that studios can protect DVD sales by hamstringing downloads and online services isn't working. Using the fear of cannibalizing DVD revenues with online services isn't particularly smart. Studios face the choice of perhaps cannibalizing their own sales, or losing the revenues to somebody else completely.
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Umm, who are they going to lose the sales to? It isn't like two studios made the same movie.
DVD sales are slipping perhaps because buying DVDs is perhaps a luxury, something that isn't as popular in these poor financial times. In fact, the blog entry you link to (rather than linking to the actual story, Mike will be proud of your SEO skills) shows this clearly, the more expensive the DVD, the more sales are off. That would appear to be a question of ability to pay, and not a lack of demand. It also is numbers in dollar figures, not units sold.
It's a big jump from here to saying the studios need to change their business model completely.
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Why, illegal downloads of course. You can lose sales to illegal sources as well as legal.
It's a big jump from here to saying the studios need to change their business model completely.
The idea that DVD sales are slipping is ancillary to the argument that the movie studios need to change their business model. What's clear from Carlo's post -- and a common theme of many TD posts -- is that the movie studios are having a hard time adapting to a new marketplace. Rather than controlling what replaces DVDs, they're so fearful of "losing" profit, even to themselves, that they're going to end up losing much more in the long run.
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It's been proven time and time again: give people a service, a reason to pay, and they will.
In lieu of that reason, service, people will create their own service (filesharing).
This is not rocket science, but it is for lazy people who don't want to try to find new methods.
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What exactly are you saying is incorrect? You replied to my comment, but you seem to be agreeing with it, not contradicting it.
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The argument that they need to change business models is an opinion. More importantly, the article from the WSJ that is pointed to is an opinion, and all the other links in the story are to techdirt posts by Mike that are also opinion.
Most importantly, they are opinions that don't consider alternate solutions for decline in dollar sales, such as lower DVD prices, people with less disposible income, people not currently buying because they are waiting to move to blu-ray, more people seeing the movies in Theaters rather than buying the DVD later, etc. So the opinion expressed isn't so much based in reality as much as a sort of group wishful thought, a tightly focused desire to move to more easily "infringed" digital delivery systems, to make more stuff "FREE!".
This is light on facts, heavy on opinion, and of course, an opinion based on quoting other opinions.
This is actually more what Masnick's law really is: If you state an opinion over and over and link to as many similar opinions, you can treat them as facts in the future.
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Yes...and? You're surprised that a web site that provides analysis on the subject of technology contains opinions?
Most importantly, they are opinions that don't consider alternate solutions
Who says these "alternate solutions" aren't being considered? Just because they're not enumerated in the post, doesn't mean that they aren't part of the overall argument. Besides, the reason for the decline in DVD sales is irrelevent. I repeat, the reason that the movie studies need to change their business model doesn't have to do with a short term decline in DVD sales. It has to do with this new fangled contraption called "The Internet" and how it will make the sale of plastic discs irrelevent.
This is actually more what Masnick's law really is: If you state an opinion over and over and link to as many similar opinions, you can treat them as facts in the future.
Feel free to provide a well-reasoned counteropinion rather than a ambiguous attack on the concept of the opinion.
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Thus, it is an opinion, and an opinion based on nothing more than a desire to make that opinion true.
"Yes...and? You're surprised that a web site that provides analysis on the subject of technology contains opinions?"
Not at all, What I object to is the citing of third party sites as source material, when it turns out that the source material is also opinion, often based on source material from another third party opinion site. I object even more because the tactic of Mike on Techdirt is to turn around and backlink to these opinion pieces on his own site at a later date, and reference them as fact or "nearly fact". it clouds the water.
I expect opinion, I don't expect it to be presented as fact.
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I don't understand. DVD sales reportedy account for 43% of a movie's revenues. How can that be irrelevant? Will those revenues come in from somewhere else?
And you say the decline is short term, but then go on to say they will become irrelevant. Please decide!
"It has to do with this new fangled contraption called "The Internet" and how it will make the sale of plastic discs irrelevent."
But plastic discs are "scarce" goods, which are supposed to cover your ass when you are giving away the movie free. And they currently account for 43%, near damn half of a movie's revenue. How is a studio to recoup the 43% decline in revenue through DVD sales if plastic discs are soon to be irrelevant? More expensive theater tickets, T-shirts?
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Well, technically...
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Now the economy is in the dumps and people have released that you do not need to own movies, it's much cheaper to rent them. Let's face it, exactly how many people are going to watch Paul Blart: Mall Cop more than once? Who needs to "own" Hotel for Dogs?
And there's one other reason for the decline in DVD sales, blu-ray. Now I'm certainly not arguing that the small sales of blu-rays are killing DVD sales. No, what I'm arguing is that most people realize that DVDs are "last year" and that high definition is today and the future. Knowing that, who wants to buy a SD DVD, knowing that the technology is already dated?
And please don't bring up DVD up-sampling. If you seriously believe that an up-sampled DVD looks as good as a blu-ray, you are not qualified to offer an opinion on the matter.
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DVD sales aren't being hampered by Blu-Ray, they are being hampered by being too goddamned expensive. Blu-Ray even more so. I've observed the prices of DVD's creeping up over the last decade until the point was reached where it was easier to wait for the price to drop than to buy new, or wait for it to show up in the library or whatever.
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I bet if I went back to the early days of DVD, I could find someone like you claiming that SVHS was good enough and the DVD was overrated...you're a genius that doesn't let reality get in the way of your arguments.
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While Blue-ray can hold far more information than a DVD, it doesn't matter, because even long movies can be stored on one disk. It isn't a matter of convienience anymore, it's now an issue of cosmetics. How much detail are you willing to pay for? As someone above said, who cares if you can see the pores or not, as long as the story is good?
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Uh, no. "DVDs" encapsulates Blu-Ray sales as well, Ima. Both segments are dropping sales. Even though there's an "increase" of Blu-Ray purchases, overall, all sales are down.
If I were to buy a new DVD, I'd do so in "SD" format. I'm not going to shell out $300 for a new player just for increased resolution when an SD version looks damn good on my plasma.
While some will argue the economy is at fault (and partly, I'm sure it is), services like Netflix are booming for good reason. As you said: Who wants to watch Mall Cop more than once.
Renting, by far, is cheaper than owning, and given Netflix's recent membership numbers, the "duh!" statement should be coming from movie distributors who can't do simple math.
I've not purchased a DVD in quite some time, and don't intend to. I don't rent, either. Simply because Hollywood doesn't put out anything of a $20 value to me.
For those rare movies which do, they become gifts.
:)
Oh, and piracy being a factor? Doubt it. The average consumer isn't pirating, despite what blowhards think. To download, review, and burn to DVD is just well above the average consumers' head to do.
Remember, we're talking about an audience which didn't even know the difference between Blu-Ray and HD-DVD. Does anyone honestly think these people pirate?
If one does, please allow me to sell you a bridge. Just opened up today for sale.
;)
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Oh puleeze, blu-ray is so "last year". HXGA (res up to 7680x4800) blows it away. If you don't know that, you are not qualified to offer an opinion on the matter. Go hide back under your rock.
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Its not like movie studio's are recording their movies in a HXGA format for the high end scientific crowd to display super high res versions of their movies on. See the original comment, "No, what I'm arguing is that most people realize that DVDs are "last year" and that high definition is today and the future." High definition is today is the key part there, HXGA is a fancy tech but it sure as hell isn't the mainstream. If you don't know that you are not qualified to offer an opinion.
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The patent is for using already known ways to analyze music and adding a very general user interface. So basically, person A comes up with way awesome way to do action X and patents that. Then person B patents doing X when a user presses a button. Now person A can't sell something doing X with a button without paying B?
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I want fewer "things"
A perfect example of this is Dark Knight. I was crusing a Circuit City that was closing and they had copies for $10. I reflexively picked up a copy because it was a good deal, and I knew I wanted to "own" a copy. But as I approached the register, I looked at the box and it occurred to me that I didn't want to have to store and/or dispose of that container and disk at some point. So I put it back on the shelf, and added it to my Netflix queue when I got home instead...
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If they do that themselves, they know profits will drop x percent. If the loss from filesharing is above that, they should do it themselves, if it isn't, they shouldn't.
They can fight filesharing to extend the time it takes to reach that point, and then go ahead and do it themselves. Anything else would be stupid.
Of course, you have to determine when you reach that point (or maybe they have already reached that point, I would imagine McKinsey or BCG has already told them that)
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and um...
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and um...
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Re: and um...
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DL times
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Shareholder Value Disconnect
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Studios and DVD's - deserve to die!
So, how many DVD's do you think I'll be purchasing from this publisher in the future?
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This is me.
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Apropos Quote
“All evolution in thought and conduct must at first appear as heresy and misconduct.”
—George Bernard Shaw
(Found on Colin Jackson’s site)
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Owning DVD’s
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