Last holiday for the DVD gravy train?

What started all the shiny disc fun…
Being Christmas etc I have been a little slow on the draw when it comes to digital rantery but in yesterday’s FT I noticed an interesting story on the movie studios and digital distro. An analyst (who BTW don’t always get things right. Remember the value of 3G and Intel Itanium based kit in every office? Pass the bong…) called Richard Greenfield with Pali Research released a note expecting a real terms decline in DVD sales Stateside. He cites VOD as cannibalising this money making machine.

Ironically, as the studio goons compared the humble Betamax to the Boston Strangler (making the common content industry error of mistaking a disruptive goldmine for a criminal) they have been doing rather well out of DVD. This may be slowing down and some think digital distro such as what Disney does with iTunes will make things worse. Disney is wise enough to see that fag packet sized downloads producing video at less than TV resolution are not substitute goods for DVDs but the others are spooked.

There is more to it than this. I think that any decline in DVD sales could also mirror the deeper reasons that CD sales have been down – back catalogues have been exploited to the hilt and new product, while flashy, does not have long term potential. The record company bozos cashed in by making people upgrade from tape to CD from CD to remastered CD and from remastered CD to special edition box set remastered again CD with extra bits. People already have a lot of what they want. Trouble is that a lot of the big ticket acts of the last fifteen years don’t generate the back catalogue opportunities (anyone want a fucking Atomic Kitten Box Set with ‘Live’ tracks and demos?) as they were top-down affairs based on ephemeral hype rather than real, dynamic fan bases.

This cycle has been repeated for many films from 2001 to Terminator and has come to an end. Many new DVD releases are really the ‘special edition’ to start with – including a tonne of extras already so can’t be exploited in the same way, even if you did want to see all the deleted scenes of some turgid rom-com. HD formats are caught in a confusing, pointless format war and are just mega expensive early adopter toys.

Panic is not called for – change is. It would still take me nearly two hours to download a full quality DVD and there are plenty of new films people want to see and buy, but the back catalogue gravy train may be coming to a standstill. Lower prices for older titles and new digital ways to access content (what about letting me pay £7 to download and burn my own DVD-R of cult titles of my choice that otherwise would be uneconomical for the studio to press?) could help.

However one wonders if the ‘YouTube generation’, which is accustomed to choice and niche will continue to support such a bizarrely structured industry with an out of control cost base and risk model in the same way. What other business front loads risks of £100m+ with no real sense of what returns will be? That’s what The Fantastic Four 2 and Die Hard 5 etc are in an economic sense. Maybe much more niche product and lower budgets for each film are another part of the solution…

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