In the ensuing piece, I talk about the diminishing profit margins of the home entertainment market and that gets me going about the costs of movies for the movie consumer and the different aspects of where we can spend money and where studios can cut costs or meet the consumer in the middle.
Yes, I rant on!
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Deadline Hollywood reported on a financial crisis (?) where profits from the home entertainment venue is dropping radically. And while the pricey DVD/Blu-ray market declines, of both sales and rentals, other cheaper options the consumers enjoy are taking off!
Examples pointed to in this report are $5 rental or $15 digital copy fees vs the $2 rental options and Netflix’s $8 monthly fee, effectively making “rentals” just under 50 cents a movie.
Hence, sales for the studios from the higher priced merchandise venue dropped 40%, when comparing 2011 to 2007. (Or to put it in numbers, 2007 profits dropped from $40 billion to just under $20B in 2011.) One of the suggestions for stemming the tide of profit was to realign business costs in marketing and distribution.
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First I don’t think the consumer is going to worry a ton about an industry that is making billions each year. Secondly, it’s hard to argue against consumer costs that cost so much less when looking at $2 vs. $5-15. And the hidden cost is the space that a DVD/Blu-ray might take up!
Space and convenience is the very reason I switched to a Kindle. My book cases are full and I rarely touch what I have. And I suspect that’s what many can say about their own video collection.
I’m also wondering how many times in a lifetime someone will be buying the newest format of a movie so you can play it again, if you ever do. If you think about it, there are many aspects that go into the sale of a title, including how a product is marketed. There’s the resale of titles in new formats, and the life-cycle of a movie when it does come out… who will go see it in theaters, rent it and buy it on DVD/Blu-ray? Who will snatch it right up when it comes to Disc and who will rebuy it when it comes out with special features? Look at Transformers 3. Dark of the Moon came out in “movie only” mode and I have yet to see the special editions with extras, alternate endings and the like. But you know they’re coming, some day.
Of course Netflix was noted in the article, and sure, they have a great selection, But I wasn’t impressed with new newest content selection or how they restrict the consumers ability to modify their viewing history buffer and how they handle things.
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It’s one thing to decide to become a vegetarian. You realize that this lifestyle requires a more focused attention to what nutrients one gets. So one would just think it’s fine to start taking vitamins. It’s basically what everyone says.
