p2pnet - rss feed: Hollywood needs YOU!!!
p2p news / p2pnet: "On the one hand, we’re playing in the old-fashioned packaged goods business, and at the same time, we have to deal with new technologies."
So says Bob Chapek, president of Disney’s Buena Vista Home Entertainment, quoted by The New York Times.
Disney is still trying, and obviously failing, to use antiquated business models centred on physical product in the digital 21st century.
"Studios are starting to beam digital movie files to consumers over the airwaves and send them through the Internet, but sales so far are minuscule," says the story. "Rentals and video-on-demand, though growing, generate far smaller profits for the studios than store-bought DVD’s."
Thus, "plain old DVD will remain their bread and butter for several more years" while the studios try, "everything they can in their quest for a new cash cow".
That’s you. And while you digest that, here’s an interesting fact :
"Studios make money when Netflix and other companies rent out their movies," says story, going on, "But the amount that studios make on rentals pales compared to how much they make when consumers buy discs. Studios earn $17.26 for each DVD they sell, but only $2.37 for movies on demand and $2.25 per DVD rented, according to Tom Adams, the president of Adams Media Research."
It’s also, "a business model that can’t be matched," he said.
And it explains why Hollywood is pushing new high-definition DVD’s, although there’s an unfortunate hitch, namely, "The studios, electronics makers and technology companies that developed them came up with two formats: Blu-ray, backed by Sony, Dell, Disney and others; and HD-DVD, which is supported by Toshiba, Microsoft and Universal, among others."
Consumers risk getting saddled with obsolete players and discs if one side ultimately backs down, and, "Cost is another factor, says the NYT, " Toshiba has introduced a $500 player that, at least for now, can only play movies from three major studios. Later this month, Samsung will release the first Blu-ray machine, which will be able to play more movies, but it is expected to cost about $1,000."
There’s a whole slew of expensive new products lined up for the new hi-def formats but, "Even so, the companies backing both high-definition formats are likely to see only modest sales initially," says the article, adding:
"Consumers will buy just $175 million worth of HD-DVD and Blu-ray discs this year; by 2010, high-definition DVD sales will still be only half those of standard-definition disc sales, according to Adams Media Research."
The Cash Cow (upper right) is with apologies to Dean McAdam ; P
Digg this story.
Also See:
The New York Times - As DVD Sales Slow, Hollywood Hunts for a New Cash Cow, June 13, 2006
June 14th, 2006 at 7:34 am
I’d like to know how the studios are making $17.26 on the disk I bought on sale at Best Buy for $9.99 yesterday? Is this more fuzzy math on the part of H’wood? Is that gross or net?
As far as rental DVDs go, doesn’t the store renting them have to buy them from H’wood? Don’t they get something from that purchase?
I would think the money they get from downloaded Movies on Demand is almost pure profit as there is no packaging to create with a graphics laden cover, no disk to manufacture (with more graphics on it), no shipping costs, etc.
Whatever the case, as is the usual situation with Hollywood accounting, it just doesn’t add up.
June 14th, 2006 at 10:46 am
Is there not a good chance that high defition television will go nowhere?
After all the definition of movies at the home will be limited by the monitors.
And just like the ipod/mp3 player/computer sound systems are more used than the expensive hi fi systems (I have not used mine in years) will it not be true that the future is in small LCD motitors attached to portable computers?
Perhaps HF DVD will be a looser, like the superior lasedisk that sounded better, if you had a $20,000 listening studio, but which no one needed.
And, is it not better to have five standard definition movies on a high capacity DVD than a single high definition movie? Perhaps movies will evolve like songs, that started out as a single song on a tube, then two songs on a two side disk and then 12 songs on a disk.
No matter what, the prospects are bad for physical media type distribution. Out the door in a few years in technologically advanced countries. In other countries, piracy will serve the market, if movie prices are not reduced to reasonable levels.
Surely Hollywood does not want me.
Rafael Venegas
http://www.gvenegas.com