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Description: Hollywood may be seeing a turnaround in a seven-year decline of home video sales, thanks to double-digit sales growth of Blu-ray discs and online movies and TV shows, an industry trade group is expected to announce on Sunday night

Source: globeandmail.com

Date: April 30, 2012

Home sales of film and TV shows reversed that decline, and increased by 0.5 per cent if sales through electronic outlets such as Apple’s iTunes service are included. Consumers purchased $165-million of those so-called electronic sell-through products.

Industry officials expressed optimism that growth will continue, based on continued sales of Blu-ray players and introduction of the studio-backed UltraViolet service by which consumers can buy movies that are shared among several cloud-connected devices. Nearly 2 million users have signed up since the serviced was introduced late last year, DEG said.  Read Rest of Story

Questions for discussion:

1. Why have DVD sales collapsed for Hollywood?

2. What technologies hold the best promise for Hollywood revenue streams in the future?

19 Responses to “Netflix and Blu-ray bump offsets Hollywood’s DVD death spiral”

  1. Mr. White

    DVD sales have collapsed because the technology is becoming obsolete. Consumers are now choosing alternative ways to watch films; the article emphasized sales of subscriptions that enable customers to stream movies online, and sales of Blu-ray discs.

    On a broader level, piracy is another major threat to the movie industry as a whole, because more and more people are discovering that it is easy to download movies on the internet, free of charge.

    I believe that the movie industry will continue to earn increasing revenues from companies like Netflix, and fewer revenues from sales of Blu-rays and DVD’s. The article states that Hollywood revenues from customers’ subscriptions to services such as Netflix had quintupled in a single quarter, which is pretty good indication that is the direction we are moving in.

    The newspaper article also mentioned a new service called Ultraviolet, which allows customers to buy movies /TV shows, and then stream their purchases via the internet. I think there are a number of problems with the company; one of which is that I don’t think they can compete with the service that Netflix offers- unlimited movies for a low monthly fee. I think that Netflix will is the company to pay attention to.

  2. Faisal Alhelaibah

    It’s basically the piracy that makes a big threat to films market such as Holly Wood or other productive companies. I guess the only way to protect films is by putting password on each file so that active thefts cannot steal files from editors or composers for example.

  3. Chance Engel

    I think the reasons for DVD sales constant decline over the past seven years is fairly obvious. It is directly because of the competition and the competitive advantage that they hold over DVDs. Blue ray is the same thing as a DVD in terms of going out and purchasing a material object and then taking it home and putting it into a player. Blue ray video is way better quality though. So if a person is going out to get a physical movie, Why not get the one with better quality? Then there is the other option. Not getting a physical movie. Instead of driving to the store, buying the movie, having a player for the movie, and having the physical item hanging around the house; people can now just stream a movie through their TV from their sattelite, programs like Netflix, video game consoles, and right off the internet. All of these are much more convenient in terms of time and money spent for the entertainment that a person receives.

    I think that the best thing that Hollywood can do is to continue to join forces with companies such as Netflix. Continuing to push DVDs at people will not work. In the technologically savvy society that we live I believe that people are searching for the best quality at the lowest convenience and price and the DVD is just not that option.

  4. Amby O

    Interesting read considering it’s a fact. DVD sales have been declining even before Netflix was introduced or even blu-ray. This is the 21st century and technology is moving so fast. I personally would rather have Netflix and eliminate anything in my house (DVD’s) and watch things online. It’s simple, there is a wide selection and the beauty of it is you can watch Netflix anywhere. All you need is a username and password only for a really small fee of $8 a month! Owning DVD’s is a waste of space to me. It’s clutter and junk and it’s not a modern way forward. I feel that in order for Hollywood to stay in the business, they need to start doing what Netflix is doing. Offer movies online and ask for a small fee. Consumer’s are looking for the cheapest way out. No one will want to pay full price for a movie when they can wait a couple months and have the movie on Netflix where they pay $8 a month. Hollywood will continue to lose customer’s if they don’t smarten up. Consumer’s would rather remain in the comfort of their home, grab a remote control and watch a movie from a broad selection on their screen. I believe that Netflix is modern day technology and is the way to go.

  5. Debbie Kennedy

    OK I have to admit I miss Block Buster. I don’t do any downloading off the internet and have never subscribed to netflix. Obviously there is a trend occurring here which is why Block Buster left the scene. I understand the Rogers is going to follow suit as well. I have a regular dvd player because a blue ray is much more expensive and the blue ray movies are also high in price. I think the quality of the picture you get from a regular dvd player is good. For people like myself, who are not big on quality that I hear blue ray gives, are eventually going to be forced to go blue ray. Regular dvd’s are becoming obsolete. For example, I love the Star Wars sequel and went everywhere to find them, none were sold in regular anymore and according to sales associates they are not going to come out in regular; therefore, I had no option, but to try finding them on Kijiji and I found them. It got me thinking though and when funds permit I probably will buy blue ray.

    I hear almost everyone talking about downloading off the internet for movies and music so I can see why sales have declined and why rental stores are closing their doors. People would prefer to stay in the comfort of their homes and do it themselves. The one thing that bothers me about downloading is exposing my computer to viruses etc. Can’t hackers reach people in this way as well? I think they can and I don’t want to be bothered with cleaning up my laptop or computer. Getting the kind of security I would feel comfortable with is much too pricey and complex.

    If Hollywood is feeling the sting then maybe it’s time they get with the program and follow suit as well. I understand netflix has a limited choice and because of Hollywood’s position they can compete and come out as the preferred choice for movies. I don’t see why not, they do make the movies so why not offer movies such as netflix does? Maybe I am ignorant, but I don’t see this as a problem. The only problem I see is the security issue.

  6. Maria Rana

    I enjoyed reading this article. There’s no doubt that Netflix has competitive the competitive advantage over options like DVDs. As we are aware, the competition in this industry is intense thus declining DVD sales. Another obvious threat is piracy. In today’s day and age, there are so many alternatives and easier ways to watch movies, therefore, why would you pay for a DVD when you can easily download it from the internet without any cost. I really think that Hollywood should consider doing some market research and should definitely partner up with Netflix, which would be profitable for Hollywood in the long term. Also, another important factor to keep in mind is that now a days consumers take their time and do their research before shopping around and are always looking for cheap alternatives and Netflix offers them that option. You can access their movies anywhere as long as you are registered with them and offers great quality as well. Therefore, Hollywood should take advantage of this opportunity and should really consider partnering up with them if they want to stay successful and profitable in this field.

  7. Rod white quills

    with the surge in technolgy that we have seen over the last ten to fifteen years it has become easier to watch movies in the comfort or your own home. with the right no time that society expects everything we are finding it easier to get movies with very little effort.we have always gone to the movies or the rental place to get the movies we wanted to watch, but always had to wait for them to be released and this didn’t work with most people. also having to always know when to return the movies was also very inconvienent. with the introduction of these newer forms of movie watching it has made it easier for us to get and watch these movies. this has caused a collapse in the rental movie business because of all the time and effort it took for us to get these movies. netflix and other technological advances we have seen in the last few years it is way easier to get and view these movies. i use the itunes protion of watching movies because we can just download movies and put it on our kids i pad and they can watch movies on the road while we travel. in my opinion this will continue to grow to the point where movies will be everywhere and we will never have to wait for the release and my soon cause movie theaters to soon become extinct.

  8. Salma H.

    With the constant change in technologies and with more updated products taking over retailer’s shelves, it is anything but surprising that DVD sales have overwhelmingly decreased. Blu-ray discs’ popularity has grown over the past couple of years, and it is very apparent when looking closely at the sales reports. People want new and improved products that will enhance their experiences when dealing with technologies and more specifically, their favorite movies. This all comes at a cost to DVD producers in the Hollywood realm. When one sector wins, another loses. Another large competetior that has become very popular within movie fanatics lately is Netflix. Netflix focuses on providing an easy and cost effective service, without having to leave one’s home. Although, customers are confined to a limited number of movie choices, and they may be relatively outdated, Netflix has a great advantage nowadays. This is because of the shutdown of DVD renting stores, which have made it harder to watch movies that are not in theatres. Another problem also arises from this industry shutdown, piracy. Not only are DVD sales suffering, but so are blu-ray discs and Netflix because of this phenomenon. Sooner or later, Hollywood will suffer tremendously because of the ease of simply ‘stealing’ these movies online, with a simple click.

  9. Ali Almasoud

    I think there are some causes behind the dramatic decrease in the sales of Hollywood DVDs. People nowadays are busier than ever. There do not have the time to go to DVD store to buy. They have other alternatives that is much more convenient for people to see movies. People rent DVDs to watch a movie for much cheaper price. Therefore, convenience play an essential role for decreasing the sales of the traditional way of Buying DVDs .Besides that, Technology and the internet help people to not only watch movies for free, but also watch movies in a higher quality cheaply. I think people do not want to buy DVDs and watch it once and then though it way, they are more likely to rent or watch it whether online or by the TV service provider. There factor, for sure, have a negative impact on Hollywood DVDs sales. I think if Hollywood improve both the convenience and the value of purchasing a movie , sales will eventually increase since Hollywood is one of the largest company that produce very good movies which actually makes me sure that the quality of movies does not have to do with sales decreasing.

  10. Megan H.

    It seems to me that we have become a society of convenience; we are in the age of fast food and 24hr convenience stores. The closure of Blockbuster retail locations across Canada seemed to signify to me the beginning of the end of physical DVDs and the continued rise of the digital age, no longer do we have to drive to the store pick up a movie and then drive back to return it, now we hit a button on the remote and voila the movie begins. Some could argue that it is a sign of going green, less DVDs should equate to less waste. On the flip side it could just a sign of the next generation slowly slipping further and further into a society of laziness and never even having to leave your house or get out of your pajamas. Now we do not have to leave our house to view the newest releases, just a click of a button and delivery on demand.

  11. Megan H.

    Although I will not argue that movie databases such as netflix have opened the door to a variety of movies and documentaries that I had never heard of, or would have rented, but do to the ease of using netlix, one click and there is the movie. It is also nice to have a wide array of movies to choose from without having hundreds of dvd boxes taking up mountains of space in my tiny little house. With netflix you can search the movie title instead of scouring through boxes and boxes of dvd cases hoping to stumble across that one that you have been looking for.

  12. Veronica

    I think that the consumers are looking for ease of use, and having immediate access to what they want, when they want it. With technologies advancing and access to entertainment on the web means you don’t have to leave your house to get a movie and you can usually purchase it online for a lower rate. Three to five years ago you could find places to rent movies such as Rogers or Blockbuster but now they are out of business because with technology they became obsolete. Another renting option which I have used is the $2 movie rental machines that are found on campus, in grocery stores, and some gas stations where you use your credit card to rent a movie out of a vending machine of sorts which is at least targeting the ‘ease of access’ that consumers are often looking for.

    It’s great that this article is discussing growth in the industry but is it really sustainable? I think we all know that can change overnight. For instance, the availability to pirate new movies that are still in theaters – online. Obviously one hopes that people won’t commit crimes but at the same time, we know it’s happening. So what is the industry going to do to protect this growth? I know we did see one avenue in class where Hollywood made movies available online at an affordable rate to combat piracy.

    I think that in order for there to be consistent growth in this industry we require websites such as Netflix where access is convenient and movies are offered at a low price. I think that sales on DVD and Blu-ray will fluctuate and who knows what will come out next… ten years ago we would have been discussing what would happen to VHS which are now basically an antique. Cineplex now has their SCENE rewards card, debit card, and credit card. They are actively marketing to consumers by offering points which can be then used towards concession or online to purchase movies, etc.

  13. Reply

    I personally never was interested in buying movies (DVD, Blu-ray, any sort) growing up and even now. Although I still feel that DVDs are much less popular and the sale is declining. I see Block Buster closing down, and online movie source market are coming up such as Netflix. I think that movie in general is still popular and always will be. People still go to the movie theatre to watch movies. I think DVD sales are declining due to the change in technology formats. Instead of renting movies from a video store, buy an access to ALL movies from a movie company. Also, I think the information that a website contains of its customers is useful to satisfy its customers in a way that DVD or Blu-ray never could. For example, it sorts out the information, analyze individual customers’ preferences and tastes in movies, suggest what movie might catch the interest. I believe that people are still signing up for online movie sources because it is more convenient than driving, renting, and bringing back on time. Also a little bit of personal information brings new types of services to customers as well. More convenient, and more personalized type of technology might kick in later.

  14. Andrew D.

    DVD sales have collapsed for hollywood for 2 main reasons. Physical media is becoming a thing of the past, with the ability to play movies off of the internet (both legally and otherwise) being so much more convenient than driving to a store to pick up a box with a disc in it and then driving back home to play it. The second reason is that DVD is now the lower quality version of physical media. For those who still don’t want to depend on the internet to watch movies, Blu-ray offers significantly better picture and sound.

    For the future, hollywood needs to jump into the online movie streaming industry. Services like netflix, Apple store, Zune Marketplace on the XBOX 360 etc. offer far more convenience for movie viewing. I would consider making a service to sell to ROKU, Apple TV, Microsoft (for use on the XBOX) that would have all new movies produced by hollywood in higher quality than what can be stolen from the internet.

  15. Xuan Wang

    There are some reasons why DVD sales have collapsed for Hollywood. Firstly, the improvement of technology allows more methods to watch movies. People may like to buy it on the Internet or buy the blu-ray. It depends on which one is more convenient and easy to do. Less and less want to buy DVD and watch it at home dose not means the Hollywood’s DVD is going to die. Customers like to watch the movies in the way which they like more with the help of technology. At the second, buy the DVD and watch it at home sounds so boring. Customers may want to find a new way and have fun when they watch movies. In personally, I like to watch movie in the theatre than watch them at home.
    “Blu-ray growth partially offset the continued decline in DVD sales.” And “Home sales of film and TV shows reversed that decline, and increased by 0.5 per cent if sales through electronic outlets such as Apple’s iTunes service are included”In my opinion, Blu-ray and home sales of film and TV shows will become the best promise for Hollywood revenue streams in the future. They have more improve space in the future.

  16. Mattie E

    I was not at all surprised to read that DVD sales have been steadily declining. Blockbuster and other movie retailers have gone bankrupt from a lack of sales, and every time I go to Walmart or Superstore there is always a giant bin of $5 DVDs (Many of which were blockbusters just released the previous year!) When I think about my own DVD collection, and how often I buy them, it’s no wonder sales are suffering. If I am going to buy anything at all, I buy a Blu-ray, because of the higher quality. My family also has Netflix, which almost eliminates my need for a DVD collection. Why would I pay $20 or more for a DVD when I can watch any movie I want for a flat rate every month? My family also owns a PVR, which also eliminates the need to buy a TV show on DVD. The introduction of these new technologies has made the DVD obsolete, much like the VCR in the early 2000’s. In this day and age, people are looking for the most convenient and most cost-effective technology, and currently this is Blu-ray and Netflix. There are even DVD booths popping up in large retailers that allow customers to rent a DVD for as little as $2. This is much more convenient than strolling the aisles of Blockbuster and paying three times as much for the same movie. Pirating is also a huge problem for DVD sales. Millions of people steal movies and TV shows online every day. I think DVD sales are only going to decrease further, due to these technologies, as well as the increasing incidence of pirating.

  17. Yue Pan

    With the development of the film, the industry of movie with the movie
    city, Hollywood as the most famous representative, became thriving.
    Likewise, the new technology development will end some companies and
    business. More and more people choose to use the online services to watch
    or download the movies instead of buying a DVD. To the subscribers of
    online services, they can get what they want more easily and cheaply,
    without driving to the stores and just making some clicking on the
    website, without the fees for every DVD, just a fee of lump sum.
    The declines of the common customers lead the depression of the DVD rental
    business. Some very famous video rental providers closed. And this will
    also decline the DVD sales.
    When the new technology appears, do not resist and keep distance, just
    follow and develop with it. Hollywood may make the joint adventure with
    the online services, such as Netflix, AOL. Hollywood can focus on the
    content, the movies itself, and the supplier of online services can
    provide the system of marketing. The intelligence property code can ensure
    Hollywood benefit. Or maybe Hollywood can stop the building of theater and
    set up their own online system.
    No technologies can hold the best promise for the revenue streams in the
    future. Silent films, talkies, colorful movies, 3-D technology, blu-ray,
    all the technology just create a period of prosperity. What can ensure the
    profit of Hollywood is the attitude to the new technology. Invest in the
    new science and make the money from the new economy. When one day the
    movies industry will perish unavoidably, the studios in Hollywood shall
    make the investment in other field to ensure the revenue streams.

  18. Brani

    DVD sales have collapsed in Hollywood simply do to the fact that people who created netflix have influenced people stay at home on their couches and order movies online. In our society materialism is a strong suite; the less work someone has to do to buy something they’ll go for it. As technology progresses something new always pops up in the future. Right now the “hot” item is the Blu-ray player. People want whats popular and rush to go get it, give it time just like the dvd’s and blu-ray will go out of style. Easier the better for consumers, and those who invent these gadgets know this. I feel though there are people who still have vhs players (i am one of them) who wil
    surcome to the inevitable. Hollywood cries that they are loosing money millions maybe billions of dollars, but realistically they pay a lot of smart people good money to come up with the next best thing. You ask what is the next technology that will bring Hollywood back into “our” homes, simply and reliably the internetThe internet has been around since the 1970’s and it is only starting to show what it can do.

  19. Misbah Dar

    DVD sales have collapsed for Hollywood because of the deal that is offered to consumers at a lower price with better quality, and easier access. People like to own movies that they love to watch over and over again on a high quality screen. Some people like to just watch the movie at their own preference of time and location; therefore they just watch it on Netflix. All these options are accessible for the consumer to purchase at a really low cost compared to purchasing a DVD. Now a day’s people don’t have to wait too long to watch a movie either on DVD or online. Not every place in town has a theatre where movies are easily accessible; therefore it is better for people to access them either online or through a Blu-Ray purchase for better quality just like in theatres. At the end it all depends on how much time a person spends in wanting to watch the movie and then end up buying it. The longer you wait for the movie to come on DVD the less price you want to pay for the wait, doesn’t seem like it is worth the wait and money. Hollywood should keep up with the current demand of movies in different formats such as DVDs, Netflix, and Blu-Ray, and step out of the one way of purchasing movies.

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