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DVD Plunge May Force Studios to Write Down Movies

Plunging DVD sales threaten to reduce profit for studio owners Time Warner Inc.,Walt Disney Co.,Viacom Inc. and News Corp., and may force them to write down the value of movies, analysts said.

Fourth-quarter shipments fell 32 percent in the U.S. and Canada to 453.6 million DVDs, according to Los Angeles-based Digital Entertainment Group. The drop is the biggest since the industry-funded researcher started keeping track in 1997.

The decline is being fueled by viewer shifts toward rental services such as Netflix Inc., the U.S. recession and technology that makes it easier to stream Web videos to televisions.

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bloomberg.com
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MegaMohsi3579d ago

“We don’t think Blu-ray is the savior,” DiClemente said. “Investing in Blu-ray, especially in the teeth of a recession, isn’t what the consumer wants.”

That's funny, I think the consumer disagrees with the rising blu ray sales and market share year over year.

Monchichi0253579d ago

But even though BluRay is increasing, the number of people choosing to go digital is FAR outpacing it. That is why NetFlix has been blowing up as of late and why Itunes is making a killing.

Yes, BluRay will one daybecome the standard, but there marketshare will be significantly smaller then what DVD once had.

MegaMohsi3579d ago

Netflix also rents dvds so everyone joining is not doing it just for streaming, as of today DD only accounts for 0.5-1% of the market. It's not growing as fast as blu ray is, for all we know netflix grew because people didn't wanna buy movies because of the difficult times so they chose to rent.

darthv723579d ago

While new users to netflix are obviously getting dvd or blu they also get DD as part of their plan. Not a bad offer as I really like being able to turn on my PC or 360 and watch something I have queued up.

I just got a new blackberry and have been adding things to my netflix queue on the go. I get home and can watch them. It doesn't matter to me about the whole hd streaming quality thing as I just like the fact I can watch a hard copy or streamed one. The choices have been getting better as of late.

Blu sales will increase as the prices come down but right now all the cheap blu movies are the crap ones that didn't sell well on dvd to begin with. The ones in the bargin bin at walmart or target may be $5 but aren't really worth owning (some of them are) but may be worth streaming from netflix.

Just like with games, movies have been increasing in costs and people are having trouble justifying buying a movie they may watch a few times as opposed to simply renting/streaming it now and then. The same holds true for going to the theaters. Cost of all the stuff at the refreshment counter has been on the rise for some time. Is the popcorn really worth the price of admission anymore?

killzone2flop3579d ago

And their i was just about to make the biggest mistake in my life and buy a Blu-Ray Player. Well i guess Netflix is the FUTURE my minds made up.

MegaMohsi3579d ago

If you think that the economy is going to be in a recession forever, go ahead.

PirateThom3579d ago

If you don't have an HDTV/Care about HD content, Netflix is definitely win.

zootang3579d ago

That's the biggest problem! You can download films from anywhere and rip them on a DVD. If the market was to turn to Blu Ray it would iliminate piracy!

creeping judas3579d ago

For how long though??

Where there is a will there is way.

PS360WII3579d ago

There are BluRay rips to download... so you know

PS360WII3579d ago

This is why there is BluRay. The studios can't overcharge for DVD's anymore the average consumer is smarter than that now. They needed a new format so they can mark them up again and start making their big profits again. Unfortunately the adoption rate needs to pick up even though BR is making amazing strides it is still not enough to help out those money grubbing executives.

darthv723579d ago

it will increase when there is no choice in the matter. By that I am referring to the old days of record, tape and cd. Once cd came out and music studios saw they increased revenue it could potentially create (lower cost to produce) it meant a shift (not overnight) was needed.

It came to a point where to totally wheen people off one format in favor of the other was to literally cut it off. I don't know if there is a big release pending that has the clout to only be released on blu in order to force the adoption of the format. It could work it could fail. It is a risk I am sure the movie execs have been pondering for the last few years. Much like sony and the continued support for the ps2.

If they drop the ps2 they could potentially lose out on hundreds of thousands of new buyers to other systems and piss off the loyals in the process. Yet if they did the could also cause the increased adoption of the ps3 to happen at a faster rate. Are they keeping it alive out of the promise of 10 year cycle or fear of losing potential ps3 customers?

Only the suits know for sure.

Hallucinate3579d ago

aslong as the ps2s selling its here to stay...i mean that would be pretty damn dumb to drop it during the reccesion when its probibly half of sonys profit