DVD rentals have gone from silver lining for Hollywood's struggling home entertainment business to yet another rain cloud.
Digital Entertainment Group, a trade organization for the major movie studios, released its first-quarter data Thursday with the surprising news that U.S. DVD rental revenue fell 14% from a year ago. DVD sales and rentals account for about half the profit for a movie, so any decline portends financial worries.
During a very tough 2009 for home entertainment, consumers preferred to rent DVDs rather than purchase them. DVD rental revenue rose 4% for the year while sales dropped 13%. Both figures include high-definition Blu-ray discs.
It states later in the article that the only movie that did outstanding on it's DVD release was "Twlight Saga: New Moon." Of course later on it says how Circuit City had DVDs on sale and how the economy was in a recession.
Do you think that Hollywood is really in trouble when it comes to the DVD market? Will things get better? Or will we as consumers only want to eventually grow to simply renting on video OnDemand or download-to-own instead of actually going out to a video store and buying a DVD. Discuss.
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4 comments:
If you look at technological advancement in the past, you can see how products come and go in the market. I think it is definitely possible that if movie producers don't see the necessary revenue from dvd sales that they will discontinue production, but they will move to the product that is more profitable. If digital copies become easier to use on standard televisions, I think that will be the preferred method of entertainment.
I do believe that the downfall can hurt the DVD Market to some extent, but it's nothing too major that we cant get out of. Like Scotty said, we are seeing a lot of advancement of technology and therefore some products may survive , some may not. As a consumer, I do see the DVD market moving to more profitable ways even if it means discontinuing the production of DVD's and strictly getting what they want from downloads and OnDemand.
I've been seeing ads lately for the type of technology that I believe will eventually replace the DVD market. ( http://bit.ly/9bupOA ) With the intangible market gaining so much possibility, a studio can profit more from online distribution than from physical manufacturing and distribution through retail channels. By using a site like Hulu and streamed directly to TV, studios can profit more from ad agreements with companies who want an ad played before the Hulu video starts than they could from a retailer. Then again, rural areas will still see rentals as the popular choice for lack of technology and internet bandwidth. Just a thought.
American society is known for instant gratification. I think DVD rentals will have a hard time staying in business. Redbox has made it harder for stores like Movie Gallery to stay in business and OnDemand will make it harder for Redbox. The easiest way for someone to attain what they want is usually how they go about getting it; for instance, using OnDemand or downloading from the Internet takes less effort than driving somewhere that has a Redbox. By using the Wireless USB/Audio Kit Chris is talking about I think DVD rentals will be replaced within the next few years. This technology makes it even easier for people to watch movies online or through their computer.
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