DVD industry in crisis as sales slump

Yep. Posted it in another thread. I work for the bigggest distributor in the country. 2006 was the high water mark, and this year has been TERRIBLE. Walmart is something like 25% of the business now in the US. They are one of the main forces behind keeping the format viable as they want to stall the move to digital download as long as possible because they use DVDs as a loss leader to drive traffic to the stores. That is part of what has killed us (distributors). What few mom and pop video retailers still exist buy their new release product at Walmart because it's cheaper than wholesale. The bulk of our business is now grocery and drug. Those cardboard kiosks you see in Kroger, Harris Teeter, Walgreens, CVS, etc... we rack job those. That and Toys R Us has kept us afloat.
 
Physical media will always have it's place. There are always going to be collectors that want the physical object. There will continue to be grandma who buys the physical disc for the christmas stocking, but it's a downward spiral to a degree. As the studios feel the pinch from reduced DVD sales, they are tempted (and do) shrink the window to "On Demand" PPV, then Premium cable, then basic cable as they get hungry for that revenue NOW. That further depresses DVD sales as that shorter window makes it easier to say "I'll just wait until it's on cable". We see the same thing in theatres. As the backend revenue from DVD and digital became the biggest piece of the pie the studios began to shrink the window between theatre and the release to other media.

It probably makes indy distribution easier as you don't have the upfront cost of the physical media. Of course you also don't have the theatrical release (and it's huge marketing budget) to drive product awareness, so the indie title may get lost in the shuffle (as it sometimes does now).
 
Now it appears Netflix is in a big battle with Comcast, who's started charging a download toll-fee on top of the Netflix fee.

http://www.huffingtonpost.com/2010/11/29/web-delivery-firm-says-co_n_789557.html

Outside of the debate about whether this violates the "free internet" paradigm, I tend to think that everyone will want to get their finger in the pie and On-Demand prices will rise dramatically, making DVD's a bit more attractive.

I've been wrong before, though...

-Charles
 
2001 Productions said:
How will this affect indie distribution? Any predictions?
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Retailers like WalMart have already nixed carrying indie films in their stores and have allocated it to website only sales. That means you went from selling 10 copies to every WalMart retail store (meaning several thousand DVD's) to selling maybe 25-50 to WalMart.com - so it's an exponential loss for indie filmmakers on DVD sales from 2006.
 
It's a loss, but at the same time it's an opportunity. Like it's been said, it's way easier to get on on-demand anyway, so if everyone is competing in the on-demand field...

Good films will still be seen. Even with DVD's, some took longer than others (like movies with a "cult" following, but if it's good on it's own merit word will spread.
 
PaulGriffith said:
It's a loss, but at the same time it's an opportunity.
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Whilst I agree that good movies will float to the top, the entire business model is decimated and the profits with it. That's great for the hobbyist who wants to get their movie seen by a few hundred people, but for people making a living at this, we're faced with a serious loss of income that is NOT compensated for with new media.


I also believe that a new business model will emerge from the ashes of physical retail at some point. I just don't know how or when yet. Something always replaces the old.
 
PaulGriffith said:
if it's good on it's own merit word will spread.
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Sure, but first somebody has to know about it. You can post a trailer on YT and link to it from IndieTalk and SpaceBook and all that, but like Sonnyboo says you're just gonna get a couple hundred hits, maybe 1% of whom might buy a copy or rent a screening. They may then recommend it to a few people, but your odds of recouping production costs and paying investors a return on a medium to large-budget indie movie are slim. There needs to be an established distribution model and publicity in order to get any kind of widespread attention.

I was pleased to see Sonnyboo's movie Horrors of War available to rent in my local video store. This is a small town, so the fact that an indie flick like that made it clear out here was encouraging. People who've never heard of it can browse the shelves and run across it. If they read the box and are intrigued by the premise they might rent it. When there is no longer a physical DVD to distribute, how the heck will anyone have that opportunity? The idea that someone might inadvertently run across your movie via the Internet is a pipe dream. By and large, people look there for specific things that they've already heard about.
 
Netflix does a pretty good job with predicting stuff I like, and most of it is stuff I've never heard before. Same with Pandora for music. I think that the digital age of distribution makes it easier for people to find the smaller stuff amidst the sea of big budget. Sure the big budget movies have more and better advertising online, but even the local video store has giant "Ironman" displays (or whatever is currently big) and it's up to the consumer to browse through the rest.

I do realize that DVD distro being down can hurt the big and small guys, but like Sonny said, something new is bound to arise.
 
PaulGriffith said:
Netflix does a pretty good job with predicting stuff I like, and most of it is stuff I've never heard before.
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Except, to my knowledge, Netflix pays no royalties. So, basically, they buy a few DVDs from the filmmaker and distribute them globally, keeping 100% of the profit. That helps the producer how, exactly?
 
I was actually talking about on demand viewing. I hardly use their DVD service, but I know they do pay royalties on their streaming per view. That's why there's not a ton of new content, the $10ish a month can't afford the royalties (yet).

Still, with other digital distro like iTunes rentals and amazon, there's an outlet.

Hard copies in general are becoming a thing of the past. When you can pay $10 a month and have legal access to everything, why buy the hard copy?

I've heard predictions that iTunes is already moving toward that for music (they're building a massive, maybe the world's biggest?, cloud server right now) and more rumors that they're looking at buying Sony, primarily for their content library.
 
The the "browsing in the video store" point, I do that with my on demand quite a bit. I got to all my premium channels, and just scan through the movies available. If the "back of the box" description piques my interest, or it has an actor I like I'll watch it.
 
People want professionally produced entertainment. If there is no way to make money, people will stop producing that product and the consumer will realize they have to bite the bullet and actually pay for it whether digital of physical.
 
As many of you know one of my passions is trying to figure all
this out. How do we get people to pay to watch the specific types
of movies we make.

Gonzo - how many times a month do you choose a movie based on the
“back of box” description that doesn’t have an actor you like and
is made by filmmakers you have never heard of? How often does the
logline/description/synopsis work to get you to watch the movie?
 
directorik said:
As many of you know one of my passions is trying to figure all
this out. How do we get people to pay to watch the specific types
of movies we make.

Gonzo - how many times a month do you choose a movie based on the
“back of box” description that doesn’t have an actor you like and
is made by filmmakers you have never heard of? How often does the
logline/description/synopsis work to get you to watch the movie?
Click to expand...

Hmmm.. on average I'd say maybe once or twice a month. Basically the same was true back in the heady days of yesteryear when I got physical screener copies of films at work. They used to be piled in great stacks in our cafeteria, but not many studios seem to do them anymore (distribute large amounts of screeners). I'd look through the piles, look at the cover art, which if it was interesting, would lead me to the "back of the box", which if it was interesting, would lead me to pick it up and take it home. Now with On Demand, I only have the little guide description to go on, but I'd say the number of totally random, I've never heard of anybody associated with this film, views are about the same.
 
Speaking for myself, my wife and I rent DVDs all the time that feature actors and/or filmmakers we've never heard of...

however...

I'm not naive enough to think we're typical. I'd venture to guess that 99.9% of people look for a name they recognize. If it ain't there, they ain't interested. It drives me nuts. They'll watch complete crap, as long as it features their favorite star.

Gonzo_Entertainment said:
People want professionally produced entertainment. If there is no way to make money, people will stop producing that product and the consumer will realize they have to bite the bullet and actually pay for it whether digital of physical.
Click to expand...

Except people seem content to watch the same half-dozen movies over and over and over. They may have different titles, actors and settings, but they're the same movie nonetheless. They'll pay for those while the ones that might challenge their expectations fade into oblivion...and they won't miss them. :scared:
 
Hmmm... "Back of the box" descriptions rarely do it for me these days. Nowadays, I take chances on indie films with "no name" actors based on USER REVIEWS via Netflix, Imdb or fellow filmmakers found here. If there's someone whose opinion and sensibilities I trust and they give a particular movie "thumbs up" or "gotta see" and the genre and/or content is of interest to me, I will give it a look. Also, if a film is critically praised, I am more inclined to learn more about it.

Although user reviews are not a failsafe method (Netherbeast Incorporated!!:grrr:), but for the most part I will scan comments to get a cursory idea of what is to be expected.

I tend to seek out dark psychological suspense thrillers and if there's an element of sci-fi fantasy and horror, all the better, but that's not all that we/I watch. The other night we streamed Oliver! the Musical (1968) and I was absolutely stunned by the set design, choreography, blocking (boggles the mind!), extras, and costumes. All real, all amazing. What's crazy is that nowadays, instead of casting 100 extras for background work, they have 100 CG artists creating the background extras. Wild.

But as far as BUYING dvds is concerned, I think the last one I bought was Scrooged :D 3 years ago at a Rite-Aid for $9.99. Just don't feel the need to own many.
 
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