November 21, 2008 by Rachel Cericola
Despite the economy, movie stars still take home a nice paycheck. However, for once it seems that consumer spending is finally hitting Hollywood in the pocketbook.
Don’t worry; Brad, Angelina and the brood certainly won’t starve. However, a report in The New York Times says that DVD sales are down, and even if the studios won’t admit it, Hollywood is starting to feel the financial crunch.
Warner Bros. says that DVD sales are down about 4 percent this year. However, Nielsen says its more like 9 percent overall. Blu-ray sales, while still growing, will miss sales projections by about 25 percent. DVD and Blu-ray sales can often account for 70 percent of a film’s revenue.
It’s not all high prices and low incomes, though. The Times also says that part of the problem is that studios love to flood the market with offbeat titles. In other words, there’s too much stock and shoppers want to be selective. In the case of Blu-ray, many consumers are still wondering whether or not the technology “will stick,” which is a big waiting game.
Don’t feel too bad. Execs say even in tight times, the DVD market is still doing a lot better than most media companies. Plus, price drops on Blu-ray players and new releases such as “Wall-E,” “The Dark Knight” and “Hancock” should all help fuel end-of-the-year sales. Also, they can always fall back on box-office receipts as well. After all, didn’t “The Dark Knight” just hit the $1 billion mark?
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Over the past 15 years, Rachel Cericola has covered entertainment, web and technology trends. Check her out at www.rachelcericola.com.
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