June 27, 2023
There have been some pretty interesting developments on the retail front lately, on both the digital and the physical side.
The Hollywood studios are finally realizing that not only is subscription streaming far from the goldmine they once thought it was, but it is also a completely unsustainable business model. As a result, they are giving the traditional window strategy a second look, including premium video-on-demand (PVOD), which they deployed during COVID-19 but then hastily discarded in their rush to give all their valuable IP to the streaming services.
We’re once again seeing bigger movies come to theaters first, followed by a transactional home release, generally digital first and then disc.
Digital retailers such as Vudu and Redbox On Demand are trumpeting the fact that these films aren’t available on the all-you-can-watch streaming services, while capitalizing on the ability to draft off theatrical marketing campaigns for the growing number of movies that are available for digital sale or rental within weeks of their theatrical openings, albeit at a higher price.
On the physical front, retailers are hoping the plethora of high-profile product will arrest the double-digit declines in DVD and Blu-ray Disc sales we’ve been seeing for the better part of a decade, ever since studios decided it was a good idea to license their films to Netflix for short-term gains, oblivious to the fact that this strategy would lead to a long-term fiscal disaster.
We’re also hearing rumblings that the physical movie disc may be in for a vinyl-like resurgence, as young people tire of the transitory nature of streaming and once again embrace something they can own, collect and show off. Back in January, I met a 23-year-old TikTok creator at CES who told me she and her friends were buying Blu-ray Disc players because they wanted to start collecting their favorite movies.
More recently, last month I was invited to speak at the annual Music Biz Conference in Nashville on a panel discussion on why record stores should start carrying movies. Speakers drew parallels between film collectors and music collectors, and noted that just as in the music industry, there’s still a place for physical media.
Ed Seaman, CEO of the MVD Entertainment Group, said that in his dealings with retailers he sees strong sales of collectible indie fare on Blu-ray Disc and 4K Ultra HD, with a similar demographic to vinyl collectors.
He shared an anecdote: “We were at this convention last year and had just gotten a monumental order from Barnes & Noble for a great collectible series of Blu-ray Discs. I was talking to a venerable indie retailer, and asked, ‘Do you have a Blu-ray section?’ She said no, her store only carries used DVDs. So I said, ‘You sell used vinyl — does that preclude you from selling new vinyl?’ And a lightbulb went off, about there being an opportunity for indie retailers to exploit these collectible Blu-rays and 4Ks, which are very similar to collectible vinyl in terms of appealing to passionate consumers.”
Connie Comeau, COO of physical media production company the ADS Group, said 35% of her company’s business consists of DVD and Blu-ray Disc replication, and over the past two years ADS produced more than 10 million DVDs exclusively for the Dollar Tree store chain. “People are wanting that content, and we are seeing an uptick in our DVD business,” she said. “I am a firm believer in physical media.”
This column appears in the June 2023 issue of the monthly Media Play News magazine.