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Insiders are telling me that end-of-November and even end of-year stats regarding DVD sales of 2008's major movie titles are looking like a disaster areas. The guesstimates are that even blockbuster titles like Iron Man and Hancock will be down 30% this month. The Industry is admitting they're also off 6% for the year so far and will likely end up 8% to 10% behind 2007. Interesting that studios which earlier claimed their film biz was near-recession proof are now blaming the economy rather than new digital media delivery options.
November Had 30% Lower DVD Movie Sales
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Entertainment used to be recession proof because it was cheap. It’s not cheap anymore. If the studios don’t want to repeat the same mistakes of the music business, they have to lower their DVD prices by more than 50%. Their just too greedy to do that, so they will lose out to piracy eventually. It would also help if the studios made better movies that people would want to watch over and over, as opposed to ones that people watch once in the theater and feel like they just got ripped off.
The studios tooled up to make more expensive BluRay DVD’s in anticipation of people upgrading to HD TV sets on which to watch them (with the bonus of reviving some played-out SKU’s).
I’d be curious to see if standard def DVD sales hold up better than anticipated because people just aren’t spending money on big ticket items like high def TV’s.
For better movies, the industry needs better people. The studios, production companies and packaging agencies have been dumbing down for years and are now pretty much at the bottom of the executive barrel. Oh, yeah…and lower the ticket and popcorn prices and watch the seats fill up!
Wow, it’s amazing how undeserving/unimpressive/mediocre/dense most of these ’suits’ are. Making a guesstimate of how the global meltdown is going to effect one’s business and coming up with “We’re recession-proof” while forgetting that much of the business is based on sales from DVDs (and those sales were going nowhere but evaporationville), well, that’s the same level of genius that figured forcing banks to loan a percentage of their funds to minority groups was a good idea.
Hollywood has never been recession-proof, only recession-delayed. In 1929, when Wall Street laid its egg, 95 million people went to the movies every week, and the level dropped acceptably to 90 million in 1930. By the next year, however, ticket sales had fallen to 75 million, and then to 60 million. Weekly attendance didn’t return to its pre-Depression levels until 1936. During that time studios halved their workers’ salaries (and in many cases didn’t raise them when things got better) and cut back on budgets. In those days all the money had to come from ticket sales (25 cent average), which were a clear indicator of the economy. When the film companies began diversifying in the deregulated 1980s, they did so, in theory, to make themselves recession-proof, and continued on that track into the 1990s. But their diversification was more like brand extension — acquiring similar businesses such as publishers, broadcast facilities, post-production houses, etc. — rather than getting into lines that didn’t have anything to do with communications. All they did was buy more eggs and put them in the same basket. On the one hand, they learned from the folly of conglomerates that had first bought into Hollywood in the 60s and 70s: what did insurance firms (TransAmerica), parking lot owners (Kinney), or soft drink companies (Coca-Cola) know about making movies? The business models mayhave been sound but the corporate managements were clueless about running movie studios. And now the glove is on the other hand; i.e., the communications conglomerates have built huge systems, but they remain vulnerable because the systems themselves are inefficient and poorly designed. Laying off workers and squeezing unions won’t save Hollywood, nor will making better films. The process of development, financing, production, distribution, marketing, and exhibition needs to be comprehensively examined. Hollywood has become a big store operation where even a billion dollar blockbuster doesn’t show a profit. If that doesn’t prove that this town has a tent pole stuck up its keester, nothing does.
Everyone who comments on this page needs to take the They’re/There/Their test.
“lower the ticket and popcorn prices and watch the seats fill up!”
That’s the key. At 10.50-11.00, even in the burbs, teenagers are even tapped out when it comes to seeing a few movies a month with soda and popcorn-which is now 5.00 a bottle and 6.00 a bucket. (Will Twilight be hig, sure…but a broken watch is right twice a day, and the system is broken). Cut the costs at the top, and work your way down. Everyone in the country is making due with less. If the studios stop paying 20-25 million for a movie star, what will they do? NOT WORK??? No, they will take 16 million after sitting on their ass for a year. It does not have to be collusion, it can be common sense. In the true spirit of Obama, wouldn’t your rank and file MOVIE STAR WANT that money to go to the below the line person fighting for their house????
Also, the DVD after market at places like Blockbuster are cutting into DVDs and On Demand is taking the need for DVDs away…let alone ripping them off the net.
Only about 20% of Americans go to the movies. What have the distributors or the exhibitors done to try to expand that number? Raising prices doesn’t count. Cramming the distribution channel with less films on more screens doesn’t count either. Don’t you love it when distributors cry that there are too many movies being made? Poor distributors. If only those movies that everyone else made would get out of their way, they’d be sailing through these tough economic times.
Cut prices, make more movies for less money and give people a reason to leave their houses.
I’m willing to take a chance on a movie that’s iffy for a few bucks at the video store or through netflix but damn if I’m not seriously angry paying $12 to sit through something that turns out to be awful. And that’s not including the price of popcorn and soda.
I also really resent being pressured into replacing my entire DVD collection with BluRay duplicates. I’m hoping to hold on through BluRay and wait til the ‘next big technological breakthrough’ hits and we have to replace everything AGAIN. BTW this is a great way for the studios to make money, but a crappy way to treat moviegoers.
Why people think Blue Ray will replace regular DVDs baffles me. They may be “better” technology, and offer more “stuff”, but I think the majority of people don’t watch the extras on dvds. They just watch the movie and the quality is a little better, but mostly appreciated by the tech obsessed.
Also, it is not surprising to hear that dvd sales are down. At some point, the average person has dozens, if not hundreds of dvds stacked up, many unwatched still in the shrink wrap. Even in the best of times, people stop and think, do I really need one more dvd on the pile? And now with the economy in the dumps, it just makes a lot more sense to “store” your films with netflix or finally watch those movies you bought months ago.
Possibly recession proof–animated and family fare. The need for dvd babysitters will never subside and kids will actually get VALUE out of the dvd purchase by watching the film over and over and over.
One of the main reasons the studios and the exhibitors will fight lowering prices is that it would cut into their welfare state. All those above-the-line club members sucking off the same slush funds and production numbers!
Biggest surprise for the industry will be when
the dust settles on Blu-ray and everybody realizes
what a non-starter of a format this is.
High prices, disc snafus and annoying firmware
upgrades are killing Blu-ray in its cradle.
I don’t know where your “insiders” are getting there information. DVDs are down 4.8% vs last year (due to being down 15% in Theatrical New Release). However, the data I’m seeing indicates an increase in consumer spending this holiday season. DVDs are still a good value in a down economy. Black Friday will obviously be a good indicator of how DVD sales will be this season, so we’ll see what happens!
Could this slow down be consumers “getting ready” for Blu-ray discs? I’m hoping to get a HD television some time next year (waiting as prices come down and my job situation gets settled), and I have stopped buying conventional DVDs…
Can anyone else out there remember in the 50s when local theatres gave away free dishes on weeknights to get people to come to the movies? And this was in a small town which didn’t have tv yet…
I just checked some Black Friday Sources and there will be deals on Blu-Ray, but there will be great deals on DVDs. From what I seen, we are looking at great steals on individual DVD movies as well as DVD TV. Yes Blu-Ray players may be as much as $100 off but I would expect TV sales to be up from last year due to the digital switchover coming next year and some sources say that is where Wal-Mart is focusing their efforts.
I’m one of those who resent the whole forced to buy ‘Blu Ray’ just because the industry voted on going that way. It feels like ‘taxation without representation’. And I won’t buy anything that comes out on Blu Ray. Case in point… I put 3:10 to Yuma on my Wish list for Amazon.com — which is a great way for the young relatives in the family to shop for your presents. To my horror, without even asking me, they switched it to Blu Ray because that’s the format the studio decided to put it out in. What did I do? I promptly deleted it from my list and told them why. Enough people must have done the same because guess what, suddenly it was available in both formats, and I put it back on my list.
There may be a lot of us for whom it does make a difference. And by the way, I am a big one for extras… I look at what I’m getting before I buy and determine whether I buy based on the extras. Especially for TV series, where I can tape the episodes on VCR — there better be extras, like commentaries, to attract me.
The biggest threat to Hollywood is some other center in New Zealand or Australia or Ireland making lots of good, cheap, movies and series and distributing them on a website like Hulu, with revenue derived from advertising shared by the producers of the series/movies and website owners.
Cost for consumer: free (ad supported). Quality: high. Watch when you want. Perhaps downloadable to an Ipod or whatever. That is the business model that kills Hollywood. It can happen anywhere. Talent is not all concentrated in the 35 mile zone. Look at what Toyota and Honda did to Detroit.
DVD sales slump is just the beginning.
All 100 episodes of a network series, that I once had a lead role in, is being offered online by two offshore (think Philippines) distribution companies. Neither SAG nor the network or the studio interests have taken any action AT ALL, even though they all have been notified time and again! This has been going on for over a year, while the “ownership” of the DVD and New Media rights are being nitpicked to death. Something about transfer rights during several cooperate takeovers and buyouts.
Nice going guys’n'gals. With all your insular thinking, you/we can expect to see this series – and many others – end up in a bin in the Dollar Store!
One of my sources in the home video marketing biz tells me that as many as half the people who buy a DVD never even unwrap it. Apparently they derive comfort from possessing a copy of a film they’ve liked in theatres, and figure — knowing how rental stores and retailers quickly rotate their stock — that, if they don’t buy it, it may vanish. But now that the industry is assuring consumers that movies will be perpetually available by download, perhaps folks are hesitating to buy hard copies. At least that’s the psychology that’s been offered to me.
Entertainment used to be recession proof because the product the customer was paying for didn’t include the expensive add-ons of all of the unionized people who put the project together. Add to that the disgust of flyover country for those elite who supported a candidate who openly spoke of “redistribution of wealth” – making people even tighter with the dollar, not only because they are fearful for their own budgets but because they are angry at the Hollywood elite who just don’t get it – as those endless Iraq war flops have proven. It’s not only making movies people want to see, and pricing them so people can afford it but its also the movie makers showing a little gratitude once in a while when the people between coasts take a couple hours, and spend an hours worth of wages to see a movie.
NYWriter-
Oh, when will you Drudge-ites give it up?
First, actually find a movie budget and see just how much the “add-ons” of the unionized crew costs compare to anything above-the-line.
Then find me a moviegoer anywhere who leaves the theater grumbling that the grips on the film must have been paid too much.
I know you right-wing hacks live for all this Real-America-resents-the-Hollywood-elite, but it’s as lame as GW Bush.
Not from NY or a writer – but – why the hostility toward another POV? so odd that people supposedly in communication/media/arts are always so contemptuous of another viewpoint or anything like “diversity” – also what’s with the Drudge stuff all the time – Finke is linked on Drudge – as are ABC, Fox, Huffington and the NY and LA Times – if Finke doesn’t want to by linked by Drudge he can take it off. IMHO – PG is an example of the problem – the outright snobbery that is rudely intolerant of any other point of view.
As a movie customer of dvds the best way to shop for them,I mean shop,look for those titles that are cheaper. Retail is taking a hit this year too. Look for bargains is my best advice.
Black Friday week numbers are in. Overall, DVD sales are down 6.2% vs last year. We’ll continue tracking how Q4 finishes, but odds aren’t looking good for the down 30% projection.