Chase Carey Denies Digital HD Meant to Expedite Demise of DVD20 Sep, 2012 By: Erik Gruenwedel
Twentieth Century Fox Home Entertainment’s launch this week of Digital HD — which offers consumers early access to select titles, including new releases for $15, is not intended to expedite the demise of package media, News Corp. president and COO Chase Carey told an investor group.
Speaking Sept. 20 at the Goldman Sachs Communacopia Conference in New York, Carey said one of the opportunities emerging out of digital distribution is the increased flexibility to sell, rent, bundle, window and price content. He said Digital HD is intended to grow the digital opportunities in the retail market for filmed entertainment — including expanding the DVD business.
“We want to do those things intelligently,” Carey said. “We want to make sure that we recognize the various importance of areas like theatrical and still [maintain] a very vibrant DVD business, but yet, take advantage of these technologies and be intelligent about the pricing.”
The COO admitted that as digital consumption increases there will be less interest among consumer to purchase physical media. He said the music industry illustrates the overwhelming demand for digital distribution while maintaining a CD business.
“Our goal is to do what we can to continue to grow and sustain the DVD business,” Carey said, adding that there will continue to be a trade off among consumers who used to buy discs, now buying digital. He said $15 price point is not set in stone and is largely predicated by consumer demand. The executive said Digital HD enables a consumer who can’t get to Walmart to buy a DVD and is sitting at home the option to buy a movie digitally that was in the theater a few months ago.
“I would buy it,” Carey said. “That’s the longer term direction for our business.”
He said digital distribution offers improved cost efficiencies compared to the manufacturing and distribution costs of disc. Carey said the studio believes there is still a real demand among consumers who want to own movies and others who want to rent them. Carey admitted studios need to do a better job educating and motivating consumers about digital sellthrough — a strategy he said could be implemented through improved user interfaces and pricing. He said Apple has proven that through iTunes.
“What does that mean to own something digitally?” Carey said. “If you get an iPad, all of a sudden you’re accessing all sort of content because its user interface sets it up for you and makes it a very exciting and easy experience.”