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[Techmeme] Netflix rises as studios' DVD money plunges

post #1 of 44
Thread Starter 
Quote:
Not long ago, ambitious young executives at the six major Hollywood film studios maneuvered to get into the home entertainment divisions.
(Credit: Greg Sandoval/CNET)

DSC01778_270x180.JPG

Nowadays, getting assigned to home entertainment is like being sent to the Eastern front. Better to work in theatrical distribution, international, or maybe studio facilities. Recently, I spoke with an executive from one of the big studios who, while discussing the challenges of working in the film industry, noted there was one silver lining: "At least I don't work in home entertainment."

The studios' home-entertainment divisions typically oversee sales of DVDs and Blu-ray discs as well as Internet distribution. But the DVD has long been synonymous with these units for the simple reason that the discs account for the vast majority of revenues. This week, Sony, Time Warner, Viacom and News Corp., reported earnings and their film divisions continue to see falling DVD sales.

For the quarter ended December 31, Paramount Pictures saw a 44 percent decline in home video revenue from the same period a year ago, according to Viacom, Paramount's parent company (don't people give DVDs as holiday gifts anymore?).

Bad films or dying format?
Time Warner, which owns Warner Bros. Pictures, generated $923 million in revenue from home video and electronic delivery of feature films. That was a 23.5 percent tumble from the $1.23 billion made during the prior-year quarter. Sony and News Corp., which operates 20th Century Fox, don't break out their home video numbers, but they both signaled that DVD sales were ailing. Sony reported that Sony Pictures suffered a 20 percent overall decline in "sales and operating revenue" in the quarter partly due to "lower home entertainment revenues from catalog product."

For two decades, DVDs and before it, VHS tapes, were a huge source of profit for the studios. DVD sales outpaced box office sales between 2002 and 2009. Barry McCarthy, Netflix's former chief financial officer, noted a couple years ago that the DVD was the most successful consumer product launch in history measured by penetration into U.S. households. He said five years after debuting, DVDs could be found in half of all U.S. households. But the garden years appear to be over, as consumers continue to show less and less interest in physical media and turn to the Web for entertainment.

Source

This is pretty huge guys! biggrin.gif

Read the full article it's worth the read!
The Rock
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post #2 of 44
As much as I hate it and some others do, cloud is the future, for all content. And I believe as technology progresses it will become even more clear, but someone has to push the concept through (google?) as we need a better internet infrastructure because clearly our isps are set on stepping backwards and limiting internet usage.

So yeah, r.i.p dvds.
post #3 of 44
Their biggest problem is that there are thousands of little three minute videos on youtube that are far more entertaining than most movies they're pumping out.
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post #4 of 44
If my northern rural ISP was able to stream videos, I would get netflix.

I am 99% certain they throttle video streaming because my download speeds are ok but streaming on youtube or any other video takes forever
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post #5 of 44
Thread Starter 
I doubt DVD Sales will ever end, unless they find a new medium, doubtful...

Though Blue Ray may become the more popular release or only!
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post #6 of 44
Quote:
Originally Posted by Lefty67;12274024 
If my northern rural ISP was able to stream videos, I would get netflix.

I am 99% certain they throttle video streaming because my download speeds are ok but streaming on youtube or any other video takes forever

I found your issue. Location: Alberta, Canada.
post #7 of 44
Maybe if they didn't charge 200$ for a single tv season or movie box set I would buy more dvd's and blu ray's.
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post #8 of 44
Maybe Blu-rays will only be bought by the most hardcore of fans. Everyone else will watch online/TV.
post #9 of 44
Quote:
Time Warner, which owns Warner Bros. Pictures, generated $923 million in revenue from home video and electronic delivery of feature films

I feel sorry for them, I mean that's basically 'peasant' money. How on earth could they ever survive on such a small amount of money!

They have no right to complain when they are pumping out those figures. If they feel the format is dying, they should invest in a new one.
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post #10 of 44
As much as I don't like the cloud, I'm happy movies are going this way. Might give the ISP's a good kick in the groin.
Quote:
Originally Posted by IcedEarth;12274198 
I feel sorry for them, I mean that's basically 'peasant' money. How on earth could they ever survive on such a small amount of money!
Yes. And people stealing their films online mean that their execs' Boeings can only have a slightly smaller jacuzzi. tongue.gif
    
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