Digital media won't be a sideshow in the future
Today's puny sales of movie and TV downloads makes one wonder: Why are striking members of the Writers Guild of America so intent on getting a cut of Internet profits?
Only about $20 million worth of movies were sold online last year, according to Parks Associates, a Dallas-based research firm. Compare that with $9.5 billion in theater tickets, $16.3 billion in DVD sales and $7.4 billion in DVD rental revenue.
But the entertainment giants have proclaimed that the future lies online and are acting accordingly -- posting videos on the Web and striking deals to speed digital distribution through such retailers as Amazon.com and Blockbuster Inc. and fresh faces like Hulu.com, which streams shows from NBC Universal, News Corp. and others.
Estimates for how quickly the market will grow can vary greatly. Movie download revenue should rise to $1.8 billion by 2011, said Parks principal analyst Kurt Scherf. Streaming video that includes advertising is likely to be even bigger.
"The real winners from the writers holding out are the people in five or seven years," said analyst Laura Martin of Soleil/Media Metrics. Read more
--Joseph Menn
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