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Hollywood's Home Entertainment Problem

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Old 12-02-2011, 09:17 AM   #1
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Default Hollywood's Home Entertainment Problem

Interesting information here, including how a digital sell-through window boosted sell-through for Sony.

Shoppers may be snapping up Harry Potter box sets for stocking stuffers, but that's not enough to stop the dizzying decline in DVD sales.

Hollywood has a problem: home entertainment sales -- both DVDs and digital downloads -- dropped 13 percent in the first three quarters of the year.
Sony's betting the earlier the better -- it recently started selling digital movie downloads two weeks before DVDs hit stores and it slashed digital prices by two dollars. Sony's first test with "Bad Teacher" was a huge success: John Calkins, Sony Pictures Entertainment's EVP of Global and Digital says that offering digital downloads before other home entertainment options lifted digital sales 25 percent, shifting the revenue mix towards ownership. The idea is to release the home entertainment option closer to the theatrical release's marketing blitz. Plus, it encourages consumers eager to watch a movie at home to try the still new digital purchase option.

Studios divergent approaches is confusing, and potentially problematic. If consumers don't know where and when they'll be able to find movies they actually want to buy, they're likely to turn to their Netflix or Amazon Prime subscriptions to quickly and easily stream a second choice. Forrester Media Analyst James McQuivey says the crucial thing for the future of home entertainment is making purchases so easy and accessible, consumers won't think twice.
And that hinges on how many companies get on board with the cloud-- and I don't just mean studios, but retailers like Apple , Amazon, Google, and even WalMart. If everyone agrees to make purchased movies available anywhere, that'll be a game-changer for what Hollywood calls the "digital sell-through" model.
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