Pity the poor DVD. So popular and such a major part of consumers’ movie collections just a few years ago, the format is now struggling for dear life. Research firm SNL Kagan has released a study on the DVD market, and the news is grim.
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Wholesale DVD revenues dropped from $7.97 billion in 2009 to $4.47 billion in 2010, a plunge of nearly 44%.
Although there were a few bright spots in the past year like Avatar and Toy Story 3, nothing seemed to be able to halt DVD’s irreversible decline. Blu-ray sales are still increasing, but represent a small percentage of the overall home entertainment market and were not included in the study.
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At this point, it looks like even the studios are beginning to give up on their one-time cash cow, DVD, and focus their efforts on premium VOD and other online delivery methods. Is DVD done for, Insiders?
(via The Wrap)
Not sure what those numbers are. I don’t think consumers spent 44% less on DVDs in 2010.
I don’t know about the numbers, but 4.47 billion dollars is still a heck of a lot of money. Who’s going to give up on something that’s making them 4.47 billion dollars a year? Even 1 billion dollars a year is still very good revenue. I’ve said it before and I’ll say it again, the Dvd is not going anywhere for a long time.
It certainly couldn’t be because the studios aren’t putting out many quality movies worth owning anymore? The majority of titles that they are making are just barely worth watching, let alone spending money to add them to your collection.
I agree with Mike. The studios haven’t created a high quality film in years (easily over a decade). DVD prices were supposed to come down after Blu-Ray was intro’d. Instead we still see movies selling for $20 per disc, which is actually the same price as 10 years ago. Also they are including the sales of TV shows on DVD, which is something that wasn’t there before. So of course sales are down based on production costs.
It’s clear that there was a golden period in terms of DVD sales. Compared to VHS tapes, DVD’s clearly had more ownership value. People had some interest in building a collection, and there must have been an interest in owning favorite TV series (at least for some people). It just should have been clear there were forces that were supporting a relatively high sales rate, but that these forces were not going to exist forever (particularly since the industry seems to have limited interest in using price promotion to promote sales). I suspect that if the industry can adapt, they can move on to a period where DVD’s will be a mature product which can remain profitable for quite a while, but they need to accept that sales will continue at a more modest level. I just hope they don’t correctly manage the market, and really allow it to sink, in hopes of chasing the next golden goose, which may or may not really come around.
Let’s not also forget that little thing called a recession that has hit Americans hard the last few years. Most folks are worried about putting food on the table and not owning the latest Hollywood “blockbuster”. DVDs are here to stay for a long time to come.
Could renting have replaced purchases?
Renting a movie is still cheaper than buying, and renting a *bad* movie is better than buying same.
I’ve discovered that I never got around to watching the DVD’s I bought for my collection more than once, and so finally concluded it was a waste of money to buy DVD’s. If I want to see a movie more than once, I’ll get it from Netflix or stream it on Itunes. There is really not much need for me to own the thing forever.
I just don’t get how one draws the conclusion that the DVD format is dying from a reported decline in sales? Let’s see, what’s a hot product – say, the iPad, selling like hotcakes. What if Apple suddenly decided, instead of lowering its price, to actually increase it? What would happen to its sales if its price went to $700? Sales would decline, we would be asking ourselves whether “the iPad is done”.
Sure, keep DVD’s at $20 and sales will decline. But they won’t be replaced by anything else – I am not going to spend money on inconvenient, unreliable, low-quality VOD just because studios keep the DVD prices high. I don’t want today’s Hollywood’s production, anyway.
Mike hit the head of the nail regarding quality flix–but it also is similar to the curve experienced by CD’s for music. CD prices were supposed to fall after a few years of paying for the “new technology” and (for the most part) did not fall for years later. If a new, “blockbuster” release were to hit the shelves, there would be a sales-bump (of course, this assumes there is a true “blockbuster” in the theaters first to drive DVD demand for the title, and “a decent opening weekend” does not always equal “blockbuster DVD sales” these days). Since DVD-media and Amaray cases can be manufactured for less than $2 in large quantities these days (or even $1 in some cases), the prices for releases are no longer “high” because of manufacturing expenses…
Worth noting–most consumers own copies of their favorite movies/shows on DVD by now and a new format has yet to beat the DVD for picture quality to the average consumer (i.e. “Blu-ray” is no big deal to the mass-market due to waiting too long for both standardization AND for the release of additional content differing from that of that on a DVD release; one reason DVD caught on was the “bonus content/extras” no on the VHS tapes they replaced). This means that consumers are not heading out to replace their older discs in the “latest and greatest” disc format as they did during the “VHS vs. DVD” era, therefore sales will be lower.
When I have to pay 500.00 for gas each month i cannot afford to buy DVD’s until they are in the 5.00 bin. It has nothing to do with redbox and everything to do with the cost of living….
Wow. Excellent point after excellent point made here by many. Of course, Hollywood Exec’s are stupid and will miss every one of them…