Hollywood is having issues with its declining revenues and is now looking at Netflix and Redbox for more bucks. In an age where consumers are controlling their spending, Hollywood is feeling the crunch as consumers decide to rent rather than buy. The fear is that even when the economy bounces back, we consumers may not flock to the DVD aisle to purchase Hollywood’s latest and greatest releases.
A recent news article states:
“The days when you [could] get anyone who wants to see a movie to pay $15 at a Blockbuster, Best Buy, or Walmart are in significant decline,” former News Corp. President Peter Chernin told a recent University of Southern California roundtable. “And you’re going to see [DVD sales] continue to decline.”
It is a measure of Hollywood’s desperation that the studios, which rarely agree on anything, are closing ranks to shore up the business. This past summer, Sony, Paramount, and Fox discussed combining back-office and distribution operations as a way of cutting costs and boosting DVD margins. Those talks have since bogged down because hoped-for savings might not materialize quickly enough.
SHARE THE WEALTH?
Meanwhile, some of the largest studios are looking to squeeze more money from Netflix, the fast-growing online behemoth that revolutionized the DVD rental business. Jeffrey L. Bewkes, CEO of Warner Bros.’ parent company, Time Warner, told an industry conference in mid-September that his studio wanted “better economics” from its Netflix deal. Time Warner, according to knowledgeable industry sources, is pressuring Netflix to rewrite its agreement either to share more of its subscription revenues or to get DVDs from the studios weeks after Wal-Mart and other retailers get them. A Netflix spokesman says only that it “continues to discuss the changing market” with the studios.
Another player feeling the hot breath of Hollywood is Redbox, the fast-growing upstart whose $1 DVD rental kiosks are in supermarkets across the U.S. In a bid to protect DVD sales, Warner, Universal, and Fox have threatened to withhold titles from Redbox unless it agrees to several restrictions. According to a lawsuit Redbox filed against Universal, they include limiting the number of titles rented in each machine, sharing rental fees, and waiting 45 days after a film has been in stores before renting it. “We think there is a place for very low-priced rentals, but obviously not in the middle of when we are trying to sell higher-priced [products],” said Bewkes at the same conference.
I am just wondering if there isn’t more to this than what Hollywood thinks. I know I have changed. I have noticed that with some 200+ channels on my Dish service, many of the movies I may have thought of purchasing are now being shown regularly on the tube. With Netflix movies on demand, why would I want to buy the movie on DVD? Just my two cents.
I just thought of something else. I have two cabinets full of DVD movies that I haven’t watched in years. I seriously doubt that I will be buying a movie on DVD again.