DVD Plunge, Viewer Shift to NetFlix May Force Studios to Write Down Films

DVD Plunge May Force Studios to Write Down Movies (Update2)
By Andy Fixmer and Sarah Rabil


Jan. 30 (Bloomberg) -- Plunging DVD sales threaten to reduce profit for studio owners Time Warner Inc.,Walt Disney Co.,Viacom Inc. and News Corp., and may force them to write down the value of movies, analysts said.

Fourth-quarter shipments fell 32 percent in the U.S. and Canada to 453.6 million DVDs, according to Los Angeles-based Digital Entertainment Group. The drop is the biggest since the industry-funded researcher started keeping track in 1997.

The decline is being fueled by viewer shifts toward rental services such as Netflix Inc., the U.S. recession and technology that makes it easier to stream Web videos to televisions.

“Making a movie just won’t be as profitable as it once was,” Barclays Capital analyst Anthony DiClemente in New York said in an interview. “There will be a complete bottoms-up reconstruction of the economics of the film business.”

DVD sales may fall 11 percent this year and cause studios to write down new and recent titles that miss internal forecasts, Michael Nathanson, an analyst at Sanford C. Bernstein & Co. in New York, wrote in a report this month.

Home-video sales and rentals, mostly reflecting DVDs, accounted for 68 percent of the $88.9 billion global filmed- entertainment market in 2008, according to estimates by New York-based PricewaterhouseCoopers LLP. The figures include $3.89 billion in online rental fees and digital streaming revenue. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601109&sid=a5OzGGqsCQ54&refer=home

I use Netflix and I love it. I thought it would be a boon to movie studios because more movies are being seen by more people. Little obscure movies rise to the surface because of Netflix's massive inventory. And I know there are some bad movies out there, but there are also many terrific ones.

I also love getting DVDs of good television shows.

a tv show I like and I missed the first couple of years and I get all the discs. Some of them are 3 hours or more.

My one complaint with netflix is they don't have new videos advertised and you have to wait "long time". I've got a local video store on the corner now so I've been renting the newer ones there and using netflix for tv dvds.

I did see a new one the other night from netflix called "Transsiberian" that was an excellent thriller.

Hollywood's Oscars are nearly obscene in their gratuitous displays of million$$$ at the most superficial side of their art.

If this limits the overdependence on special effects to the detriment of content, I'm not against it. The reason the original Star Trek was so much better (IMHO) than the ones that followed was that it was a low budget operation, and they had to concentrate on things like...oh, say...plot and characterization because they couldn't afford the shiny stuff.

But, I'm an old curmudgeon, so what do I know? :)

The problem is most likely the producer's cut.

,000,000,000,000 CGI video game sprites whizzing across the screen.

ADHD 'action' lacks the real tension Kirk era (and even some of TNG TV) had.

The existing base of players has grown by several magnitudes over the last 5 years, but the retail price of DVD's hasnt gone down.

Seriously, have any of todays business leaders ever taken any economics courses?

Lame excuse. DVD's aren't selling because they're too freaking expensive. Period.

in recent years home video has replaced theater showings, so it made up for the difference. Do you see what I mean?

Perhaps we need theaters again?

in the last couple of years that deserved theatre runs in the US, but they couldn't find distributors. It seems like distributors don't even want to consider a film unless it's got a big name director and big name actors and a massive budget. Unfortunately, a lot of those 'big' films are mediocre at best. Not all indies are great, but some are real gems.

I've gotten tired of seeing the same dozen actors headlining everything that comes out of Hollywood - rarely bother even renting a Hollywood offering anymore.

Would you REALLY want to have your very own copy of most of the movies released in the last year?

The recession/depression has curtailed a lot of spending on luxury items, but people will occasionally buy things they just want. What they DON'T want are the movies that are coming out now.

I haven't seen a movie worth buying on DVD in five years. Who has $20 to pay for a DVD of Beverly Hills Chihuahua or High School the Musical 3?

Hollywood salaries are massively inflated and most of the films the get the green light are questionable projects at best. Hopefully, this will encourage some belt-tightening and slightly more selective choices of projects.

note I still have the $20, and the store still has the copy of Beverly Hills Chihuahua. Such it will remain.

... could it be that Hollywood is going to have to revise it's cost and profit structures to the real world? They'd better get used to it, because it's just getting started.

thanks for your empathy.

fd: I work for a major studio

... biz be immune? They should be the FIRST to go, they are non-essential.

And while I'm sure you are not overpaid, actors, directors, producers, and plenty of others most certainly are. They can join the real world, might give them some ideas for making a movie that has any relevance to anything.

Luxury or not, The American film industry is pretty much the only thing we got that's still made in America.

I wonder how much larger our trade deficit would be without it.:shrug:

but I guess DUers only care about manufacturing jobs when it comes to "auto makers". Fuck all other manufacturing workers... especially those that work in California.

People don't have the money for luxuries these days. Sorry, but that's the way it is.

looking for a job for almost a year. I don't have ten dollars to spend seeing a movie in a theater once or $25 to spend on a DVD of something I'm only going to watch once or twice. And I just haven't seen a movie I would pay to watch since Return of the King.

Sorry but my empathy is in pretty short supply. And I've been doing a lot better for the past five years than most people.

How many movie stars care that it's almost impossible for teachers to find work?

billions in market derivatives. But, of course, movie stars ARE an easier target.

ones that are just average.

"Theatres" these days are little more than concrete boxes, where we are assaulted by sounds TOO LOUD, air TOO COLD, movies TOO CRAP!, people with CRYING KIDS because they are too cheap to get a sitter, people yapping on/answering CELL PHONES, nasty popcorn that costs too much, sodas that cost too much, and did I mention that most of the movies are CRAP..and now they give us COMMERCIALS too??

I don't even use Netflix-y places.. we are perfectly willing to wait until HBO/Showtime gets the movies, then we DVR it and watch it whenever WE want :)

the last year, the movies were crap and i hated the consistent mentality of crap being dished to us.

i dont even watch tv anymore. crap....

i read.

It's not all that relaxing anymore... TV, if one is selective, can provide some entertainment, but most of it's crap:)

remember the day when there would be shows that we could/would watch as a family. my kids are 13 and 11. they dont watch tv much either. history or discovery. (i disgress a lot adn often).... anyway, back in the way when we watched tv as a family. neither of my kids have ever watched a primetime show on the three major networks. ever.

now i dont even watch anymore so dont know if there is anything, but.... i think that says a lot.

he would say.."What in the HELL are you WATCHING "?
:rofl:

i walked in on one scene and got so very damn mad at hubby. lol. so tired of women raped and abused for male entertainment, wink. but i do understand it is a very well made series. wasnt that the one that they ended abruptly without an end? i think so.

what a P.O.S. that one was.. They had promised a 2 part wrap-up of Deadwood, but I guess by the time they got around to it, everyone else was on to other things:(

How much money does it take to make a new one once you have the master?

Case in point: Season 6 of MI-5/Spooks is list-priced at $79, and discount websites have it for about $60. I just bought it from the UK for about $35. Yes, people, some things actually are cheaper in the UK, not many, though.

The only DVDs I buy these days are foreign ones that have not been released yet in the U.S. or ones that are on deep, deep discount, such as when a video store is closing down. That's how I got a pile of VHS tapes for $1 each, including some great obscurities and oldies.

Otherwise, I LOVE Netflix. I'm currently on Season 2 of the newer Doctor Who.

Especially coming at the same time as streaming and pay-per-view prices finally coming down.

We only just got used to DVDs, and Hollywood was already going crazy with multiple re-issues and bonus editions; adding Blu-Ray to the mix might be great for the few early-adopters, but the rest of us couldn't care less.

"HD" quality is nullified by compression... and a tangible disc beats a hard drive - especially if it's Seagate these days (nothing but problems there).

In that first group I mentioned, the early adopters, it's a different story. Bragging rights.

Also, I include PPV/DVR as streaming technology.

i dont need digital? tv. he is sooooo thrilled. and he has talked about blue ray, i just faze out, eyes get glassy. about the same when i talk to him about feelings and stuff, lol lol

:)

:hi:

when Oppo finally releases theirs, but my point is.....BluRay isn't a quantum leap in quality or convenience like dvd was over vhs. In a world that is satisfied with mp3's, dvd quality is more than enough for most. I was lucky enough to be able to build a theater room a few years ago, so I count myself as one of the few who care about the better quality of bluray. But, I haven't felt the need to jump on the first ones to come out since my Denon player upscales great.
Bottom line, bluray is doomed to obscurity, IMHO.

My previous DVD player cost $250

I've done it with vinyl, cassettes, cds, VHS and now DVD. In this scary economy, I'm not going to buy a DVD, when in a year or two, the format may be obsolete.

The last DVD I bought was "Juno".

We, too, are using Netflix, and really enjoying the opportunity to watch movies in our own home. The food's better, we know where the bathroom is, and we don't have to worry about the woman next to us getting assaulted by another patron for politely asking her not to use her cell phone during the film. Yes, this really happened when we went to see "Brokeback Mountain" locally the night before the Oscars two years ago.

We're just outside of Redmond, WA, which has opened a theater that charges $32 per movie ticket. Yes, you get to sit in a recliner, there are only 40 people at most in the theater, you can order adult-type food and beverages, but I told one of our friends that if one went to this theater more than 10 times a year, the person would be better off saving for a flat screen LCD TV instead. As some have mentioned already in this thread, I can't IMAGINE how pissed I would be to spend $75 on two tickets for a movie to see some of the dreck that's been out this year.