In a longer story about Spielberg's troubles re-launching his studio it seems a collapse in the DVD market is to blame for last quarter's broad industry loses. Given that entertainment is actually considered more recession proof than many industries, I'm not sure all this can be attributed to the economy.
The new film company’s launch comes at a difficult time for the industry. Credit markets are frozen while DVDs, Hollywood’s most important revenue stream, are in steep decline across the industry, with sales of new titles falling more than 20 per cent in the final three months of 2008.
News Corp and Time Warner this week blamed weaknesses in the DVD market for steep first quarter losses. Walt Disney also pointed to the decline of the industry when it reported a 32 per cent fall in profits.
The demise of the DVD market is probably tied to 2 factors, the high price of DVD's and the ready availability to download many DVD's on Netflix for an extremely affordable price. It's all the more attractive to download from Netflix with their recent $99 device which allows you to watch those movies on your television, and not just on your computer. All you have to do is compare the performance of the stocks of Dreamworks and Netflix, and you can easily see what the advancement of technology has wrought, clear winners and clear losers:
http://finance.yahoo.com/q/ta?s=DWA&t=2y&l=on&z=m&q=l&p=&a=&c=nflx
I wonder why anyone would spend $15-20 to own a DVD when for a $9/month subscription to Netflix you could watch all different DVD's any time you like.
Posted by: Todd | Sunday, February 08, 2009 at 11:01 AM
It could also be that Hollywood is putting out mainly crap, and no one wants to spend the money the crap. Or sequels. Or remakes.
Posted by: Duncan | Sunday, February 08, 2009 at 06:52 PM