Sony Pictures Entertainment is laying off 450 people, more than 6.5% of its workforce, as part of a studio-wide belt-tightening blamed on the growth of piracy and changing media consumption patterns, particularly the ongoing downturn in DVD sales.
In a memo to Sony Pictures' roughly 6,800 employees Monday, Chairman Michael Lynton and Co-Chairman Amy Pascal said most of the layoffs would hit the home entertainment and information technology divisions in the U.S.
But all business units would be affected, they said, including motion pictures, television, digital production and corporate operations.
Along with the layoffs, the studio is eliminating about 100 open positions.
This will be the second time in a year that Sony Pictures has cut its workforce. Last March it laid off 250 people and scrapped 100 open positions.
You can see more of the blog at: http://www.latimes.com/business/la-fi-ct-sony2-2010feb02,0,7735430.story
The DVD industry is taking another hit. While people download movies for free on their computer illegally, jobs are in-turn are being lost. Is the beginning of the end near for DVDs already? Discuss.
4 comments:
A lot goes into the declining sale of DVD's. I don't think it it necessarily the economy, but I do think it is just part of the natural product life cycle. DVD's are on the downward slope of the bell shaped curve. They don't have as much storage capacity as a Blu-ray disc and media stored digitally on hard drives take up less physical space than DVD's. Pretty soon, we will see them phased out. I was at Target the other day and saw Blu-ray movies for $9.99 (on sale). As they continue to be agressively priced and more people get the players, they will phase out dvd's altogether.
I don't know that it was the economy, per se; I think the economic conditions provided them with a cover to "downsize" a branch of their business that has little if any future for growth or sustainability.
A quote, contained in the article, states that Sony's industry is affected by the economy and technology. As the economy declines, one of the first cutbacks made by families includes entertainment purchases. The article even states that although box office hits have helped Sony Pictures, "rising ticket sales have not been enough to compensate for declining home entertainment revenue". Blu-ray would be the technological advancement. The article cited in this lead blog states that together, DVD and high-definition Blu-ray discs suffered a 13% loss in sales. However, a Crave Online article states that, "despite the economic downturn, consumers are embracing the Blu-ray Disc in impressive numbers". I do agree with Justin in that DVDs may be phased out as consumers purchase more Blu-ray players. It will be similar to the phasing out of VHS tapes as DVD players became more common.
I find this article very interesting and it even contains a chart measuring the growth of Blu-ray sales From March 09 to November 09.
http://www.dvdfile.com/views/articles/24605-blu-ray-disc-exceeds-expectations
For bloggers to come, my question is: What are your predictions about the future of DVDs?
To tie in with the lead blog: What are your thoughts on the Sony layoffs?
I agree with Justin's comment about the natural product life cycle. DVDs replaced VHS and my prediction for DVDs is Blu-ray will replace DVDs. In a couple of years technology will come up with something new to replace Blu-ray.
Reading the article Kylie posted it shows how Blu-Ray is on a steady increase. Another Sony article "Oscar nominations set to give DVDs sales a boost" has high hopes for DVD sales because of the Oscar nominations. Harvey Weinstein, co-chairperson of The Weinstein Co, stated" “We’ll sell another million or two million DVD units because of the nominations." From reading the article it seems they are holding on to the bursts of DVD sales versus being on a steady incline of sales like Blu-ray. In a few years DVDs will probably be pushed to the side like VHS tapes are now.
You all make good points. Justin is right about the fact that DVD's do not have as much storage capacity as a blu-ray, and they are definitely on a downward slope. Blu-Ray disk sales were up 67 % in 2009 according to "engadget HD". The article says that blu-ray players were up 44% in 2009 when the overall spending market was down 1%. So Blu-Ray is in the running to completely replace DVDs. Aside from all that, I think the market is moving toward the digital download age and even though Blu-Rays are selling so good, I predict that within the next 5 years, physical disks will start to disappear. People will be getting there movies digitally via itunes and other online stores, P2Ps, etc... But as far the lay offs, it is inevitable for that to happen. The Entertainment Industry is in the middle of a shift change and right now several companies are having to suffer from it, but I think it will all work itself out in the near future.
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