Studio Notes DVD Sales Increase Amidst Digital Distribution

Mac Slocum
May 2, 2008 | Permalink | Comments (0) | Listen

Recent developments in the movie world suggest that digital delivery and availability help the bottom line.

Time Warner CEO Jeff Bewkes announced during a recent investor call that Warner Brothers will soon release DVDs and video-on-demand (VOD) titles on the same day. The company -- like all Hollywood studios -- has long employed a multi-week delay between a film's DVD release and its availability through on-demand rental systems. However, interesting results from a Warner Brothers pilot program could mark the end of this staggered system. From The New York Times:

Warner Brothers has been experimenting with the new approach [simultaneous release] for the last few months. It has found that DVD rentals only fell by 3 percent to 5 percent and sales of DVDs actually increased, perhaps because of the increased promotion and fewer used rental discs available for sale.

Apple and other movie studios are already taking note.

A portion of Warners' increased DVD sales could plug in to the "souvenir" purchasing seen in other industries. At its core, this concept is driven by a simple chain of events: digital distribution boosts accessibility, which increases awareness and -- for a subset of the viewing population -- inspires customers to purchase physical copies of a film.

This line of thinking (digital distribution + accessibility + awareness = revenue) drives envelope-pushing initiatives, like intentional distribution through P2P networks. On the publishing side, it's also why the Kindle's killer app resides in the device's built-in Whispernet connectivity, which makes it easy for consumers to find, sample and purchase material. Some of these same people will likely convert into hard-copy customers as well.

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