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DVD sales drop. Can Hollywood still profit?

Posted Nov 14 2007, 06:11 AM by Kim Peterson
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Image credit: NYTimes.comDVDs used to be the profit makers for movie studios, but a new report says DVD sales are tanking this year -- and suggests Hollywood is headed into the red.

DVD sales have fallen for the last three years after soaring by 75% between 1999 and 2004, according to the report, by Global Media Intelligence. In the first half of this year, DVD sales in the U.S. dropped by 12.5%.

I haven't seen enough solid clues about why DVD sales are down. I don't think the next-generation formats, Blu-Ray and HD-DVD, are mainstream enough yet to eat into the DVD market. Maybe more cable and satellite options, such as on-demand programming, are factoring in. DVD player sales are down 15% over the past year, after dropping 24% the year before.

I've only bought one DVD this year: "Ratatouille." Netflix and Tivo take care of the rest of my movie-watching needs. Still, DVDs are so cheap that some people I know just buy movies rather than rent them.

The study also said that studios will suffer $1.9 billion in pretax losses on the movies released last year. That's down from a $2.2 billion profit for 2004 releases. It notes that studios are paying more fees to actors, directors and producers than in the past. Those so-called participation deals doubled from five years ago to $3 billion last year.

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Comments

 

I think the main reason DVD sales are down is because they are just too costly, and just how many time do you want to watch any given movie? After awhile, DVD's just become dust collectors.

James (Posted 11.14.07 8:49 AM) Report Abuse

I think part of the problem is that Hollywood isn't making movies that are worth spending the money.

Deb (Posted 11.14.07 8:49 AM) Report Abuse

Maybe it has to do with the fact that most of us wait till the "special editions" get released, no one wants to spend $15 on a DVD and then 6 months later spend another $25 to get the directors cut or extended versions. I wait or I buy Blu-Ray, and of course like the music industry, the product has to be worth purchasing... most movies released in the last few months sucked at the theater so why would you buy them??

Bryan B (Posted 11.14.07 8:49 AM) Report Abuse

reason thet sales are DOWN is there is nothing coming out of Hollywood worth Buying. Nothing is a 5 star rating movie Just junk!Reese Witherspoon,UGH!

Sylvia (Posted 11.14.07 8:52 AM) Report Abuse

Another reason for the drop in DVD sales is the rent and copy crowd at Netflix and Blockbuster.

Joe bloggs (Posted 11.14.07 8:54 AM) Report Abuse

I personally have a collection over 500 DVD's, but have slowed down what I buy because I'm afraid that the new media options (HD DVD and Blu-Ray) are going to make DVD's a thing of the past like Cassette Tapes became. I spent thousands of dollars on my DVD's and if they are going to become a thing of the past, I'd rather stop buying now until the new Media Giant becomes apparant.

Richard (Posted 11.14.07 8:57 AM) Report Abuse

If the studios would release movies on DVD earlier after they leave the theatres I would buy more. But after 2 or 3 months, the advertising for the movie is gone and then the DVD comes out and it gets lost in the shuffle with the 500 other movies on the shelf and I forget about buying it. Also, they should come out with a service that would allow you to download a movie like the day after it hits the theatres for like $4.95and then watch it and then maybe like a month after the movie is out of theatres it would allow you to burn the movie 1 time  to DVD  to keep for an additional fee of like $6.95.

shane (Posted 11.14.07 8:57 AM) Report Abuse

i dont think its just one factor,people have so many dvds today and plus they see them on tv and plus they probably download illegal ones or buy used ones and the movies out today are mostly stuff that can be easily forgotton compared to many movies of long ago that everyone remembers and loved,

bob taylor (Posted 11.14.07 8:59 AM) Report Abuse

Maybe Hollywood should stop making so many bad movies.  I used to buy tons of videos and then DVDs, but there hardly any movies nowadays that I actually want to own so I can watch them more than once.

Angel (Posted 11.14.07 8:59 AM) Report Abuse

With netflix, why would I buy a DVD? I only watch a movie once, and I can always re-add it to the netflix.

2. I had a Blu-ray PS3, but returned it within a week because of the $200 HDDVD player, but I didn't buy that either. If holly wood would pick a format (please blu-ray) I would buy one! but not until!

josh (Posted 11.14.07 9:01 AM) Report Abuse

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