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Walt Disney Studios executive details counter offensive against DVD industry woes

Cheap DVD rentals, Internet movie piracy, and a sour economy: These are the causes of the storm ravaging Hollywood's home entertainment business.

Walt Disney Studios Distribution President Bob Chapek, addressing Wall Street analysts attending Disney's investor conference Thursday in Anaheim, cited all three factors as contributing to the industry-wide decline in DVD sales. And on top of that, he added, new technologies such as Blu-ray high-definition discs, aren't growing quickly enough to offset the declines.

Chapek said Disney is doing what it can to entice consumers to buy its movies, by offering new forms of packaging that offer greater perceived value, such as the "Beauty and the Beast Diamond Edition," which included Blu-ray and DVD discs.

Disney is also willing to experiment with "release windows," as it did in issuing Tim Burton's movie "Alice in Wonderland" on DVD three months after its theatrical premiere (instead of the usual four-month wait). 

Chapek said Disney would also seek higher margins from the rental business, increasing the wholesale price it charges for the DVDs sold to discount movie rental services Redbox and Netflix. He noted Disney will drop the wholesale price to $10 for each DVD six weeks after its goes on sale retail. 

The timing is slightly different from what we initially reported, which indicated Disney would make the movies available to Netflix and Redbox beginning 28 days after their initial DVD release. But Chapek's announcement confirms the main significance of Disney's shift in strategy with Netflix and Redbox: By charging the retailers more at the wholesale level, the movie studio hopes to mitigate the effect low-cost rentals will have on higher-margin DVD sales.

-- Dawn C. Chmielewski


Comments () | Archives (8)

How bout just opening the "vault?" Why do I have to wait X amount of years before I can buy The Jungle Book? Why only realease the classics(the movies that have basically MADE the Disney Co. such a success)..."Snow White"..."Cinderella", Sleeping Beauty"...etc. for a short time and then put them back in the "Vault". Sometimes I feel like watching one of those Dinseny movies and can't becasue I missed the time period when they were re released. Now I have to wait...YEARS! before I can purchase it again. Wouldn't it make more sense to make these movies available all the time? There is a better chance of me buying my favorite Dinsey movies while srolling in the local Target on a random rainy tuesday afternoon, than it is for me to set my alarm/calendar anticipating the next release of Winnie The Pooh. Like they say..."outta sight, outta mind".

Disney sure has plenty of excuses for the decline of sales except, glarinly, the real reason: the poor quality of their movies. People will overpay for Blue-Ray and Delux Box Set of DVD for something appealing. But Disney and Hollywood in general makes movies directed toward such a narrow segment of the audience (cartoons and summer block busters), there is little reason to buy it unless you're a parent or a teenager, Moreover, Hollywood keeps releasing 'better' versions later on, so many people felt like suckers buying the first edition. Might as well rent it, but then the consumers realize they just don't need it. Finally, Blue-Ray is just too expensive.

how about cutting prices and offering all movies, not just a few? Hello??? Anyone out there???????

I think the days of charging $29.99 for a DVD-Blu-ray are gone. Parents are now focused on buying something at an affordable price. While Disney does have a great product that kids do enjoy, the cost is simply too much.
Providing 3 formats, Blu-ray, Digital File, and DVD is a bit much. I would be interested to see a statistic to detail how many households have digital players that can play these formats? At the end of the day, Disney needs to have a better understanding of the financial limitations parents have today and adjust thier pricing strategy to meet those needs. Other wise, Red Box and Netflix will continue to grow and the Disney profits will continue to shrink.

This is just so sad. Disney, the company that buys congressmen so they can rewrite U.S. Copyright law, isn't making as much money as they want.

How about the fact that people are finally getting tired of re-buying the same films over and over each time they come out in a new, improved format? You can only mine that shaft so long, and Disney and the rest of the studios have finally come up empty.

If they want to bring back their lost in sales then they should increase the prices of blank DVD's using levies and close torrent sites that offer free downloads just like what happen to Limewire. If they plan to do this then expect a long legal battle.

Problem in a nutshell: Hollywood's market can't afford Hollywood.

Who really wants to spend $10/person just to see a movie in the theatre (multiply by 4 for a family, and that's not buying any overpriced drinks/popcorn) when you can wait a few months and rent the thing for a couple bucks?

Why would I pay over $35 for a DVD-Blu-ray-Digital box set with a flipping hologram of some Disney princess? Real value: appropriate price for the DVD-blu-ray set, no frilly holograms (i.e. no more than $25).


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