Why DVD Sales are Down 18%

Tuesday May 19, 2009

Why DVD Sales are Down 18%

On his “Big Picture” blog, Patrick Goldstein takes a look at DVD sales, which are currently down by 18 percent. It’s a post worth reading—particularly since he enlightens an area that the studios like to keep dark. One bit of news I found heartening: The sales of better DVDs (as judged by exit polls and critics, and exemplified, here, by “Iron Man”) do better than the sales of lamer DVDs (“Indiana Jones and the Kingdom of the Crystal Skull”). I.e., Quality matters. What I’ve been saying. What I’ll continue to say. Stay tuned.

As for why the sales of DVDs are down? Goldstein doesn’t know and he says the industry doesn’t know, either:

No one has any real answers about the DVD downturn either. Obviously the country's economic woes have played a role. The DVD business has long ago lost its novelty, so many consumers don't feel the need to stock up on as many new releases. Many consumers have turned to downloading and rentals, with Netflix in particular enjoying a burst of popularity -- a good thing for filmmakers, but not such a good thing for studios, who make a lower profit margin on rentals than sales.

You could also argue that we now live in a cultural moment where people don't want to own things as much as they want to experience them...

Here’s my guess.

A new format—the Blu-Ray DVD—has arrived, but it requires a lot of expensive extras: a Blu-Ray DVD player and, more importantly, an HDTV.

All of these new formats became available, or affordable, just before the fiscal crisis, and most people have yet to buy them. But they will buy them. They’re just putting them on hold.

That means they’re also putting DVD purchases on hold. Why buy the DVD when in a year you’ll buy the better Blu-Ray version?

That’s my guess. The old is dying and the new has yet to be born, and the fiscal crisis has simply lengthened this interregnum.

Another possibility: the Blu-Ray DVD is the final stab at the hearts of some collectivists. After compiling libraries of films on VHS, and then DVD, they’ve grown tired, know that Blu-Ray is only the latest format for their favorite films, which will soon by usurped by something else, and they figure, “What’s the point?”

They’ve just dumped their CD collection (who knows what they’ve done with all of the tapes and LPs), and figure the future of movies is in an MP3-like file stored on computers. So, again, why buy the rapidly outdated DVD?

All of which is to say: the movie industry is lucky DVD sales are down by only 18 percent.