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Studio Notes DVD Sales Increase Amidst Digital Distribution

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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