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When Will They Stop Blaming DVD?

13 Oct, 2009 By: Stephanie Prange

I’ve been in this industry long enough to remember when it was a sort of backwater for the theatrical business. It made money, to be sure, but didn’t command part of the spotlight. Movies traveled from theatrical release to VHS rental (or sellthrough if they were saleable enough) to other forums, such as cable.

After the dawn of DVD, around the early part of this decade, the industry began to take some of the spotlight. Suddenly, every financial call from the studios mentioned DVD sales as a “bright spot” in the ledger. I don’t know how many times I wrote the headline, “DVD a Bright Spot in [insert studio here] Financials.”

That’s why its so disheartening to hear DVD blamed for the downfall of the studios. Hey, DVD has been a star player for a few years, but the format is aging, with a new star — Blu-ray Disc — not yet ready to start in the big game. And its the whole team that has to take the blame for the revenue tumble. Just because DVD hasn’t recently been able to make up for a poor quarterback — or bad financial weather — isn’t any reason to say the packaged media business is done.

In many reports in the past couple of weeks, pundits have fingered the DVD sales shortfall for the studio executive shuffles at Disney and Universal. One report in the Financial Times was titled, “RIP DVD.” Oh my gosh! Consumers might just stop buying DVDs by the armful and rent them instead and how will the studios cope?! That was the jist of the article.

I’m sorry. Just because consumers aren’t buying as many DVDs as they have in the past isn’t the death knell for packaged media — or the studios for that matter. On a micro level, it’s people like my neighbor that are giving the studios fits. She now rents from Redbox for $1 instead of buying from Wal-mart for $10 to $15. Still, she buys the films on DVD that she truly wants to own. Hey, that doesn’t sound all that different from the business a decade ago —split between rental titles and those marked for sellthrough — when the studios were doing just fine.

Many articles have rightly mentioned other culprits, such as the overall economic environment (hey, other businesses based on discretionary purchases, such as travel and eating out, are suffering as well) and a financial climate in which hedge funds are pulling back from backing every big budget movie that comes along. The studios are just going through the same belt-tightening facing most other industries. Don’t blame it all on DVD.

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