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January 18, 2011 by · Leave a Comment 

Sales of DVDs and Blu-ray discs, which already were down 13 percent in 2010, are likely to take a steeper dive in 2011, according to analysts interviewed by the Los Angeles Times. Current economic conditions are the root cause of the decline, the analysts say, as well as the ease with which consumers can now rent movies via kiosks for $1 a night or via Netflix by mail or online streaming. “Studios get a double negative whammy from rental’s strength,” Tom Adams, principal media analyst for market researcher Screen Digest, told the Times. “Transactions are growing, but consumer spending is not, because they’re getting ’em cheaper.” On Monday researchers NPD Group reported that kiosks, led by Redbox and Blockbuster Express, are generating more DVD rentals than brick-and-mortar stores. Cheap DVD rentals are also driving moviegoers away from theaters, Michael Nathanson of Nomura Securities told Screen Digest. “There’s no popcorn, no babysitter, no expensive soda. You just sit on the couch.” Some critics of the current system have suggested that Hollywood needs to readjust its business model in order to combat the availability of cheap online video. But Craig Moffett of Sanford C. Bernstein & Co. told the research group, “The jury is still out on whether there is a digital model that can replicate the profitability of the old linear model. … Nobody has cracked the code for online profitability.”