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It’s Going to Take a Village to Save This Business

21 Mar, 2013 By: Thomas K. Arnold

The most interesting thing about consulting firm Deloitte’s latest “State of the Media Democracy” survey is that soaring tablet use will drive an increase in movie rentals at the expense of sellthrough.

According to Deloitte, 28% of survey respondents said they would rent a movie this year, while just 12% said they would buy one, either on disc or through a digital download. At the same time, tablet ownership shot up 177% over the past year, with tablet owners 70% more likely to stream movies than those who don’t own an iPad or similar device.

The conclusion that there’s a correlation certainly strikes me as a valid one. And for studios that continue to rely on sellthrough for the bulk of their daily bread, this is, indeed, cause for concern. Hollywood throughout the years has done everything in its power to pump up the sales market. Back in the early days of home video, they fought tooth and nail against the nascent rental industry, which the studios correctly charged was taking money out of their pockets.

The Walt Disney Company’s much-ballyhooed moratorium strategy put dollar signs in everyone’s eyes as they realized that consumers could, indeed, be induced to buy movies, and in huge quantities. But it wasn’t until the advent of DVD in 1997 that the studios finally came up with an insurmountable weapon that ignited the sellthrough market quickly and furiously — and ever since the market peaked in 2005, they’ve been trying to figure out how to regain the momentum.

Since then, however, we’ve become a much more transient society. Our inherent nature to own, to collect, to hoard, has diminished. We lease cars instead of buy them; we read the news online instead of buying newspapers and magazines; and when we do buy things it’s products that enable us to do things, like smartphones and tablets, instead of products we can actually use on their own merits.

These days, the things we can do with smartphones and tablets are practically endless. The commercial of the couple spending every second of their day on matching Kindles is beginning to ring true: Our smartphones and tablets have become integrated in our daily lives. Heck, I see it with myself, a 55-year-old geezer who texts like a teen and goes everywhere, even the beach, with his iPad.

So for studios that still, more than anything else, want to sell content, what’s the solution? As I’ve said many times before, we need to find some way to sync the consumers’ desire to watch movies with our desire to sell them. I’m convinced UltraViolet is the best way to achieve this, but it’s still way too complicated — and the fact that Disney isn’t on board is having a real chilling effect on its immediate potential.

It takes a village to raise a child? Heck, it’s going to take a village to save this business — all of us, working together and putting all our focus on understanding the consumer and his wants, needs and desires.

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