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Devaluation Blues

27 Mar, 2009 By: Thomas K. Arnold

Studio executives, some publicly but most privately, are expressing concern over dollar DVD rentals at Redbox and other kiosks, saying the practice devalues the product. Craig Kornblau, president of Universal Studios Home Entertainment, has launched the most visible protest, refusing to sell Redbox his product until 45 days after release. One could argue, however, that dollar rentals are no worse than those omnipresent $5 dump bins at Wal-Mart, which increasingly are filled with fairly current hit product, sometimes less than a year old, rather than the public domain stuff one used to find there. Personally, I think we're facing a much bigger perception problem with the public, brought on by the advent of digital downloading, which inevitably leads to file-swapping. People no longer place much value on any form of home entertainment--not when they can swap songs in a matter of seconds or get an evening's worth of free entertainment on YouTube, watching vintage music videos or what-have-you. This revelation certainly isn't news to the music industry, which for years has seen its profits wither as a $15 CD business quickly evolved into one driven by 99-cent downloads. This perception problem also has a lot to do with the fact that digital entertainment really is vaporware--there's nothing to hold in your hands, look at and file away in a collection. To paraphrase Gertrude Stein, there's no there there.

That's why the key to packaged media's survival is to play up the value proposition by focusing on its two key strengths: 1) It won't die when your computer crashes--if properly handled it will last as long as you do, if not longer; and 2) It's physical, something you can own and treasure, like a favorite book. To shore up the latter, we need to see studio marketers do more to enhance the value of packaged media and offer consumers more than just the movie. They can spruce up the packaging, like Warner does with its Blu-ray "books" or Universal Studios does with its Legacy Series (personal note: I collect all these, even if I don't particularly case for the movie!), and they can also add physical value, as Warner does with its Ultimate Collectors Editions (as I write, I am already salivating for Woodstock). I'm not one of those who believes packaged media is doomed. We just have to differentiate it more.



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