As DVDs decline, globalization comes to Hollywood's rescue
Thursday, May 20, 2010 at 12:05AM 
Conflicting messages from Variety and The Economist.
Variety points out that the great initial wave of DVDing the back catalogue (all those movies from the past) is winding down, especially as people move toward digital access and services like Netflix).
The pic in 2006 was about 2/3rds retail DVD, 1/5th DVD rentals and all the rest. But by 2013, the all-the-rest will dominate to the tune of 2/3rds. All-the-rest is online video, Pay-per-view & video-on-demand, DVD by mail, and rental and retail Blu-ray.
Pretty big and fast shift in revenue sources, although one can argue that the generation shift from DVD to Blu-ray isn't really that profound as far as customer is concerned. If you add up the rental and retails of DVDs and Blu-Rays in 2013, it's more like 3/4ths--so not such a huge drop from 2006. Still, clear that digital access is rising as a model.
Meanwhile, the box-office revenue is doing great, off-setting the slight decline in domestic retail product sales ($27B in 2006 to predicted 25B in 2013, because the digital access involves a tighter margin). Worldwide box office hit $30B last year, up 8% from 2008. Domestic BO was only 1/3rd that total.
So Hollywood, left to domestic sales only, would be a $35B-$37B business. But add in overseas and you're talking a $55-57B business, meaning globalization works just fine for Hollywood.
Reader Comments (1)
The future is definitely subscription based, media less service. Sure, there will still be discs, but having a nearly unlimited library without all the DVDs is a deal maker. The problem is and will be ripping the media for personal use so you do not have to subscribe in the future.