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Analyst predicts losses for Hollywood due to plummeting DVD sales

Written by Rich Fiscus (Google+) @ 12 Nov 2007 22:55 User comments (22)

Analyst predicts losses for Hollywood due to plummeting DVD sales According to a report from Global Media Intelligence, a division of media analysis firm Screen Digest, rising costs and falling revenue will cause studios to lose $1.9 billion on movies originally released in 2006. The report compares 2006 releases to those just two years earlier in 2004. Releases from that year reportedly earned profits of $2.2 billion.
So what's being blamed for turning profits into losses? The report points to the current trend toward lower DVD sales with no alternative revenue stream replacing those dollars. While studios are actively pursuing other revenue streams like Video on Demand (VoD) to make up for lower DVD returns, based on the report they're not meeting with much success so far.

"Some executives in the Hollywood studios are looking to the new technologies of video-on-demand and subscription-based TV to fill the gap left by DVD. However, GMI estimates that while vod will offer a superior share of the consumer dollar over traditional pay channels (60% versus 40%), it will not deliver at the lofty levels predicted in the early days of the industry and will not help the studios put old wine in new bottles," said Roger Smith, author of the report.

"Our analysis of the business of the Hollywood studios may come as a surprise to investors and even some people within the industry. We believe there is little chance of the negative revenue trend reversing in the coming years," Smith said. "New technology will not deliver anything like the revenue initially predicted, and as DVD sales continue to decline and the cost of making movies increases, the message is simple: the Hollywood studios must begin a serious attempt to reign in costs, like News Corp.'s Fox has done, if they are to survive."

Source: Video Business

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22 user comments

113.11.2007 0:06

It doesn't matter what format it's in if it stinks like yesterday's diaper who's willing to buy it! Come Tinsel town get a clue and produce some good quality products. Oops I guess we'll have to wait for the writers to come back and from the looks of it it won't be very soon.

213.11.2007 0:08

only option = blanket tax like in france

313.11.2007 0:22

its simple lower the price of DVDs until you get 1-3$ of profit off them, so that would make them what 8-13$ a pop thus people would not feel raped each time they buy a crap fest and might learn to enjoy their crap fests because nothing is as fun as a cheap crap fest 0-o

413.11.2007 0:37

In other news......Hollywood says plummeting DVD sales are not caused by half-baked movies, lame actors or poor quality effects but is instead linked to only piracy.

Thats the usual news we hear from Hollywood and although this isn't from Hollywood expect something like I said above to be mentioned as "cause of sales loss" soon.

513.11.2007 0:55

funny how this article pops up when theres a writers strike going on too with many writers trying to get paid themselves off dvd sales and so on ...who knows if the movie writers will see the money from dvd sales...i'm not surprised at dvd sales figuring they have released a few good movies this year i see box office sales are breaking records this year dvd sales arent..probably has something to do with format wars as well or ppl wanting to to go hi-def and not wanting to buy 2 player for one platform who knows to many things to factor in plus alot of crappy movies ruin it too....

613.11.2007 3:11

Quote:
funny how this article pops up when theres a writers strike going on too with many writers trying to get paid themselves off dvd sales and so on
That would be Studios way of saying, "Money? What money? Can't you see we ain`t making profits on dvd's anymore?"

Originally posted by Pop_Smith:
In other news......Hollywood says plummeting DVD sales are not caused by half-baked movies, lame actors or poor quality effects but is instead linked to only piracy.
And Overpriced crap...
Studios release their dvds depending on how good the box office was, i.e. the better, the latter,(i.e Spider-man 3) the lower, the sooner, (Fantastic Four 2) an exception this year would be "Transformers" I though we would get that one until Xmas, but I suppose that the "HD-DVD ONLY" idea was a factor on that one too.

Price should be following a similar trend, the less successful a lower price, so maybe the "completist" would buy it if for anything else, to complete a collection I.e sequels, remakes, etc. just like now we see re-re-releases with not one, not two, but THREE films on the same box for, gee I don't know... $15 bucks? (psycho, halloween, terminator, and lot of others) Sure, they don't have the extras, but, honestly, How often do we care for them? (specially a lot of times the commentaries tracks.

I know Profits are the main goal for them (Can let go the profits) but wouldn't it be easier to sell 10 bad rep dvd at $9 bucks than 5 at $19? Somebody said "Be the best not the cheapest" But if some movies are not the first one, couldn't be at least the second one?


Just A Thought

713.11.2007 4:01

Well I guess with all the money they claim 2 be losing they might want 2 start thinking about getting rid of a few cars and homes and only having one of each like everyone else.

This message has been edited since its posting. Latest edit was made on 13 Nov 2007 @ 4:08

813.11.2007 8:21

I think we will soon see another mass article pleading to congress to pass another bill to force somebody else to pay for what pirates have done. I know this is right around the corner. This would be a topical thing with other articles showing how desperate they really are.

913.11.2007 10:23

I liken watching a movie to gambling: some people play the cheap tables and some are high rollers. How much do you want to spend for a movie? Theater ticket, DVD sale, DVD rental, or just download it? Honestly, most people don't want to fork over $15-$20 for a new DVD every week, especially if it's not a proven "winner". There's very few of those, and just how many times will the consumer be "burned" before they are either broke or tired of losing money.

Then there's always the media mafia, trying to rehash and resell to squeeze a buck out of something. Do they think Joe Consumer is going to see it at the theater, rent it on DVD, buy it on DVD, purchase a pay-per-view showing, rent off Xbox Live, then buy it later on Blu-Ray or HD-DVD?

Turn around time for a movie has shrunk so much, I truly believe that most people are content with either paying to see it once "right away" (theater or DVD sale/rental) or just holding out for less than a year to catch it on HBO, and later your basic cable network like TNT.

1013.11.2007 13:36

OMG, hell must have frozen over. They didn't blame piracy for plummeting sales!

1113.11.2007 16:38

I can tell them in 3 words why sales are off.

"MOST MOVIES SUCK", you don't have to be an anal-yst to come to that conclusion. Just a pulse will do.

I remember back some 20+ years ago a lot of "B" movies were actually pretty good. Nowadays I can't even believe some "A" movies make it onto dvd let alone the big screen. As for todays "B" movies...heh, lets just say, omg, roflmao, filming my dog taking a crap in the backyard would be more entertaining. A vast majority of movies aren't even worth the time it takes to download for free.

I have news for Hollywood, video-on-demand and subscription-based TV are worthless without quality content. And most Hollywood types wouldn't know "quality" if it jumped up and smacked them in face! There are better movies on youtube.

1213.11.2007 18:49

Make some good movies and the sales won't fall. Everything is part 2m, part 3 or remake this remake that. Come up with some good new ideas for films and stop pressing poop on Dvd's.

1313.11.2007 20:39

Originally posted by c1c:
Make some good movies and the sales won't fall. Everything is part 2m, part 3 or remake this remake that. Come up with some good new ideas for films and stop pressing poop on Dvd's.
I dont mind remakes,its like with game remakes as long as its good and not some modernized drug haze version cooked from the minds of fat lazy elites I can stand it :P

1414.11.2007 11:00

I would just like to add that I am a firm, fair, yet vigilant man with, what I like to consider, much sensibility and I am soooooo tired of people using the good-for-nothing excuse for pirating movies, camming movies, sharing movies, dvd sales declining and the like on "Crappy and Bad movies being pushed out". I am an avid movie fan and I can name a ton of quality movies that if you honestly believe sucked...............you be part of the vast minority. Transformers was awesome. Well acted, great spec. effects and exciting. The Kingdom was awesome. Pirates of the Carrib (all 3) were awesome, Blood diamond and The Bourne ID, Supr., and Ultimatum were awesome. Generally the movies coming out are good if not great, with exceptions of course but most comments knocking the movie industry as putting out junk is a loser's half-assed means of creating a scapegoat to justify that what they are d/ling or pirating is ok or a reason to complain about pricing. Granted that 9.50 is a way high price for a movie, some are worth it and by the time you get out of the theatre, you aren't even thinking about that anymore. So stop using the useless excuse that Hollywood is dishing out crap and therefore "it's ok" to rob them. Just take the attitude that I have for example.............download the stuff simply because it's easier and more convenient and the main reason...............WHY PAY WHEN YOU DON"T HAVE TO.

1514.11.2007 12:43

Originally posted by tester22:
tired of people using the good-for-nothing excuse for pirating movies, camming movies, sharing movies, dvd sales declining and the like on "Crappy and Bad movies being pushed out". I am an avid movie fan and I can name a ton of quality movies"
I can also name a ton of quality movies. Problem is they span 20+ years. We are like 6.5 weeks from 2008 and you named movies from as far back as 2002. Hollywood can't make the hundreds of billions it wants with only a couple summer blockbusters each year.

Also, I doubt the fact home forclosures and oil being at record highs has much impact on retail sales from month to month. Not to mention the national average for gasoline is over $3 a gallon and pushing $5 a gallon in remote areas of California.

You can't be serious about Blood Diamond...lol, that movie was mediocore at best. http://www.nypost.com/seven/10232006/gossip/pagesix/pagesix.htm

Also...why would consumers want to invest hard earned dollars into DVD's when those same movies are available in HD? Plus, many won't be buying anything in HD until there is a standard, or a dual format player for well under USD $200.

Consumers, like myself, are completely fed up with corporations complaining about only making 300 billion instead of their projected 350 billion. It's gotten quite out of hand and corporate greed is literaly destroying the United States.
This message has been edited since its posting. Latest edit was made on 14 Nov 2007 @ 14:57

1615.11.2007 10:57

skeil909........I respect your opinion, truly I do. I, and many I know who have seen Blood Diamond thought the movie was great. Well acted and an eye opener to those not in touch with how the world works outside their home.

As for the remark about movie(S) going back to 2002. All I ask is that people not make comments that when they are sitting in a chair, they can't breathe.
***.
Blood Diamond (2006)
The Bourne Supremacy (2004)
The Bourne Ult (2007)
Transformers (2007)
Pirates of the Caribbean: Dead Man's Chest (2006)
Pirates of the Caribbean: At World's End (2007)
Pirates of the Caribbean: The Curse of the Black Pearl (2003)

and lastly......The Bourne ID (2002)

That would be one (1) movie and give me a break......it was a measly 5 years ago. Not like the dinosaur's age. Besides, peeps been bitchin' about this FOR FIVE OR MORE YEARS.

I can name a boat load of others as well and I bet my right arm you'd agree with most of the flicks I'd say are good. Not going there - waste of time.

I also agree with you whole-heartedly about the money revenue crap. Their complaining about making 300 billion instead of their projected 350 billion is a load of malarky and I liken it to Businesses like the oil companies, which I loathe, whining about "oh wahhhhhh, CEO is only making a record amount of 400 Million this year ....oh wahhhhhh, when he made 480 million last year..........wahhhhhhh.........SHUT UP SHUT UP SHUT UP. I'd be happy to make 60 grand this year and the next and the next.

Sorry about the rant

1715.11.2007 14:45
hughjars
Inactive

I'm all ears the moment anyone can actually post up the Hollywood studios have lost money.

(and don't try pulling that 'sub division' cr@p, Universal, Warner, Paramount & Sony haven't actually lost any money on their balance sheets in decades)

1815.11.2007 15:15

Originally posted by tester22:
skeil909........I respect your opinion, truly I do. I, and many I know who have seen Blood Diamond thought the movie was great. Well acted and an eye opener to those not in touch with how the world works outside their home.

As for the remark about movie(S) going back to 2002. All I ask is that people not make comments that when they are sitting in a chair, they can't breathe.
***.
Blood Diamond (2006)
The Bourne Supremacy (2004)
The Bourne Ult (2007)
Transformers (2007)
Pirates of the Caribbean: Dead Man's Chest (2006)
Pirates of the Caribbean: At World's End (2007)
Pirates of the Caribbean: The Curse of the Black Pearl (2003)

and lastly......The Bourne ID (2002)

That would be one (1) movie and give me a break......it was a measly 5 years ago. Not like the dinosaur's age. Besides, peeps been bitchin' about this FOR FIVE OR MORE YEARS.

I can name a boat load of others as well and I bet my right arm you'd agree with most of the flicks I'd say are good. Not going there - waste of time.

I also agree with you whole-heartedly about the money revenue crap. Their complaining about making 300 billion instead of their projected 350 billion is a load of malarky and I liken it to Businesses like the oil companies, which I loathe, whining about "oh wahhhhhh, CEO is only making a record amount of 400 Million this year ....oh wahhhhhh, when he made 480 million last year..........wahhhhhhh.........SHUT UP SHUT UP SHUT UP. I'd be happy to make 60 grand this year and the next and the next.

Sorry about the rant
POTC is a good set of films its like the Mummy films fun and easy going but it dose not help that 80+ % of films blow,

BTW "Dawsomefomers" sucked :P

1916.11.2007 11:40

DVD sales plummeting. Banks losing billions. Home builders facing bankruptcy. Companies showing record losses. Good!

After all these years of raping us with price increases every month, horrendous customer service, high fuel prices, electric, gas, food, tuition and anything else they can think of. Fees for everything from the Usage, service funds to the Had-a-good-shit-on-Tuesday fees. Taxes on just about everything in the world. The millions of foreclosures. The list goes on.

What the fuck did people think was going to happen. Companies and the Govt. have looked at the consumer like we are one giant blank check for a long time. And it's finally backfiring on them. Whenever I hear about big companies losing money or going out of business, I laugh with excitement.

Consumers are fed up and I hope will remember how they have been treated. Big business, FUCK YOU!

2016.11.2007 12:02

Poor poor Zippy............if you truly feel that Transformers sucked then your general taste in movies sucks as well. Although I can respect other people's opinions and recognize that not everyone will like that movie, I must say that you are now in the same category as my 63 year old mother who just saw Transformers on her way back from Dubai and she did not like it. But then again..........she doesn't like ANY scifi flicks or movies of that nature. I'm gonna go out on a limb and suggest that pretty much anyone who visits this site (especially regulars) is either a scifi fan or at the very least a techie who can appreciate great CGI. Poor poor Zippy..........you are no longer permitted to comment or pass your opinion on movies anymore as you have proven yourself 'out to lunch'...........especially with that ridiculous and adolescent comment that doesn't make any sense what-so-ever "Dawsomefomers". And please don't explain because it will still be ridiculous.

212.12.2007 19:01

this is going to happen regardless because the new formats will eventually take over so hence the prices of normal dvds will drop and the profit margins for dvd sales will drop this is only the begining.

222.12.2007 19:19

Originally posted by tester22:
Poor poor Zippy............if you truly feel that Transformers sucked then your general taste in movies sucks as well. Although I can respect other people's opinions and recognize that not everyone will like that movie, I must say that you are now in the same category as my 63 year old mother who just saw Transformers on her way back from Dubai and she did not like it. But then again..........she doesn't like ANY scifi flicks or movies of that nature. I'm gonna go out on a limb and suggest that pretty much anyone who visits this site (especially regulars) is either a scifi fan or at the very least a techie who can appreciate great CGI. Poor poor Zippy..........you are no longer permitted to comment or pass your opinion on movies anymore as you have proven yourself 'out to lunch'...........especially with that ridiculous and adolescent comment that doesn't make any sense what-so-ever "Dawsomefomers". And please don't explain because it will still be ridiculous.
And I bet you loved catwomen,AVP1-2 and emospidy 3 because the people you herd well with liked it too,awww how cute,to be in the click and following "teh trend".

Dawsomefomers= dawson creek/bad teen drama reffrance, of coarse you probably think the human cast are the sarts of a film about robots.....

I shouldn't have to say more "bad teen drama" pretty much sums it up.

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