Variety is killing DVD sales, if 2010 sales figures are to believed. While sales for Blu-Ray and VoD have “exploded” this year, DVD sales are estimated to have fallen 12% when compared with 2009 numbers, which were already down on previous years. According to the CEO of retailer chain Hastings, John Marmaduke, the problem may have been an audience realizing that it just doesn’t need DVDs anymore:
Consumer confidence is coming back but will never return to 2006 levels in this generatio. People are living without what they can live without, as they discovered it wasn’t such a big sacrifice.
Unsurprisingly, the rise of Netflix and Redbox is being pointed by as a factor in this realization, with Universal Home Entertainment’s president Craig Kornblau suggesting that studios will need to look outside their comfort zones to expand in this new landscape:
Given the weak economy, it’s no surprise that there has been a secular shift to rental, chiefly subscription and kiosks, over the past year… Looking ahead, one of our biggest challenges will be finding lucrative ways to offset this loss in sell-through by aggressively growing our VOD and iVOD businesses.
But with options available splitting the market into ever-shrinking areas – Redbox and Netflix may have grown this year, but rental in general didn’t, as Blockbuster’s bankruptcy demonstrates – the trick won’t just be for studios to grow VoD, but to grow their VoD services. Expect a battle for eyeballs and wallets over the next few years, which may be all to the benefit of audiences, if they can hold on until it’s all over.
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