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DVD Is Getting a Bad Rap

31 Aug, 2009 By: Thomas K. Arnold

If you believe the mainstream media, you’d think declining DVD sales were to blame for global warming, California’s budget crisis, the swine flu pandemic and the apparent failure of President Obama’s health care reforms.

Virtually every day, some big newspaper or magazine, from the Los Angeles Times to the Wall Street Journal, publishes a story in which something bad gets blamed on the “grim slowdown” (that’s what the New York Times calls it) in DVD sales.

The latest is on The Weinstein Co.’s continued financial struggles. Brothers Bob and Harvey finally scored another box office hit with Quentin Tarantino’s campy Inglourious Basterds, but as the Journal points out, “that still may not be enough to give the studio the boost it needs to climb out of its current financial troubles.” The story goes on to note that after a “string of bombs,” The Weinstein Co. is struggling to stay afloat “in a harsh Hollywood climate where financing has dried up and home video sales have sunk.”

What everyone failed to note here is that DVD sales of theatrical movies rely heavily on the box office success of these movies. If a movie flops theatrically, it’s not going to be a No. 1 smash on home video, even in the glory days when consumer spending on DVD purchases was posting double-digit gains each year. And if your slate of theatrical DVDs aren’t selling as well as you had hoped they would, you can’t count on secondary product to make up the difference.

That said, how do we get the media to stop saying such nasty things about our business? At their very worst, sales of DVDs are down about 15% so far this year. Actual consumer spending on home entertainment is down maybe half that amount, when you factor in Blu-ray Disc — which is having a phenomenal year, despite the bad economy — and DVD rentals, which the studios don’t like because for the most part they don’t get a share of the action.

But even 15% isn’t that bad when you look at most industries, from the automotive industry (auto sales are down by more than 30%) to publishing (don’t ask!). And realistically speaking, you do have to factor in Blu-ray Disc sales and DVD rentals, as well as electronic delivery.

Only then can you paint an accurate picture of how much consumers are really spending to bring movies, TV shows and other programming into their homes. And when you factor in all those things, hey, we’re not that bad off.

Really, we’re not.

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