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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.

Comments

 

Hahahahahahaha the fools are finally not getting theirs.   Every year they give away the profits to the Actors, Writers,Producers and Directors. It had to end badly and now, without foresight, they are going in the tank. I never got mine, or Oh Yeah, I did get mine...in the form of a salary. Residuals were not in my contract, as they should not be in the aforementioned Guilds.  I put my hard work on the screen on every show I did. Without Props and Sets, you have an actor standing in front of a wall, any wall. Good Luck! They have raped the Industry and now it is coming back to haunt them.

Many regular people, myself included, are waiting for a clear winner ( if one ever developes) in the new format war of HD-DVD vs Blu-Ray.  I'm not going to buy a regular DVD and have to upgrade again in the next few years.  I'm not sure Hollywood understands this.

Hollywood should pay more attention to DVD content. Stop making so many films that promote a certain political ideology. Make movies the public wants and the profits will return.

I am the owner of two indepedent video rental stores. Over the last five years I have seen our inventory go from all VHS to all DVD. Revenue has been up slightly over the last three years, due to aggressive attention to customer service and product inventory. We begin selling our previously viewed titles after 30 to 45 days of rental. Profit margins have decreased as a result of higher operating cost for tilte inventory, insurance, taxes,  minimum wages increases and utilities. Competition does not allow offsetting increases in rental pricing.

No one factor can be identified as the reason for limited revenue growth. Brick and morter locations will always provide an outlet for customers who want to browse offerings. However, the lack of support from studios to promote in store marketing has went from decent to none. If studios had their way they would try to eliminate the "middle man". I think this is wrong headed.

Studios should consider how to encourage visits to local outlets. Sales at Walmart, Best Buy and other retail sales centers will continue to drop, customers can only home inventory so many copies before they reach a saturation point. Until such time studios can expect to see revenues continue to declind.

 DVD sales were good initially because people needed the space in their homes and replaced bigger, bulkier VHS recordings with their DVD equivalent. Most of the films I've seen this year are cliches. They repeat the same basic themes, with only a simple change of actors to differentiate them, and you're charging way too much for them. The truth be known, I prefered "The Return of Martin Guerre" to "Somersby" and "The Nine Queens" to it's Hollywood clone. Ask David Osbourne what makes a good movie.

It seems to me that Hollywood has become too vulgar in the past (and today) and a lot of people are just plain sick and tired of it as I am.  When they started making remakes of old shows like Dr. Doolittle and the Nutty Professor, and these remakes had to tie in some kind of sexual joke, That's when I stopped buying and even renting for that matter.  When I feek uncomfortable around my own kids or even my parents, it's tme to say GOODBYE HOLLYWOOD!  SEE YA.

Definitely on-demand is affecting sales ...why buy a DVD that may be watched only once.

Also there is "Entertainment Overload" with computers and video games that are taking up time that may of been used for TV or movies.

The cost of all these entertainment options is taking its toll on the family budget. Not only do you have to buy the device ...but you have to buy all the add-ons just to use them.

think people are finally realizing there is more to life than sitting in front of the tube.  Go outside and see reality!

Maybe they'll survive if they start making good movies again instead on the vapid, uncreative garbage they crank out now.

At least for me I have not been buying DVDs because I  know the new format is comming and I dont want to have to re-buy my favorites in a few years when the format wars shake out

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