Sony Pictures CEO Says DVD Tough to Replace - High-Def Digest Forums
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Old 04-22-2009, 10:05 PM
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Arrow Sony Pictures CEO Says DVD Tough to Replace

Sony Pictures CEO Says DVD Tough to Replace

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By Erik Gruenwedel | Posted: 22 Apr 2009
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Despite a decline in DVD sellthough — offset by growing Blu-ray Disc sales — through the first quarter in 2009, Sony Pictures Entertainment co-chairman and CEO Michael Lynton says he is optimistic technology will produce a successor that isn’t necessarily Blu-ray or electronic.

In an interview with studio co-chairman Amy Pascal for Forbes.com, Lynton said DVD has been a venerable gold mine to Hollywood that average consumers coveted more than they actually consumed. He said typical consumers would regularly purchase and rent multiple titles on DVD that they didn’t necessarily watch.

“That’s a good business to be in,” Lynton said.

The executive said the transition to Internet-based distribution of movies and TV programming presents a double-edged sword in that consumers will only pay for what they actually watch. Lynton considers electronic sellthrough as incremental revenue to the current entertainment distribution food chain.

“It may be a smaller window from a financial standpoint,” he said.

Lynton said he remains hopeful and skeptical that consumers will replace their DVD libraries with Blu-ray Discs. He said ongoing price erosion of the format, which includes BD players, HDTV and increased availability of HD content on network TV, is bad for margins.

“That makes consumers more likely to buy Blu-ray but less likely to pay a premium for it,” he said.
http://www.homemediamagazine.com/son...-replace-15453
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Old 04-22-2009, 10:26 PM
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Wait a minute, a successor that isn't necessarily electronic? Are we going to back to home 8mm reels? I don't think that's what they meant.
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Old 04-22-2009, 10:29 PM
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Originally Posted by Ace_of_Sevens View Post
Wait a minute, a successor that isn't necessarily electronic? Are we going to back to home 8mm reels? I don't think that's what they meant.
" Lynton considers electronic sellthrough as incremental revenue to the current entertainment distribution food chain."
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Old 04-22-2009, 11:01 PM
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WoW i just saw this at another link; color me surprised that this is coming from Sony, actually, more like shocked!
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Old 04-22-2009, 11:17 PM
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The actual interview is here:

http://www.forbes.com/2009/04/21/son...edia-sony.html

Blu Ray/ DVD bits:

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Do you think DVD sales are down for good?

Lynton: What you see happening is that every time a new technology or means of distribution show up, about every decade or so, there's an enormous growth in the business because there's another way to exploit the library. We just went through one with DVD. Now we need the next one. I don't mean to sound Pollyannaish but there's always a next one.

There are a lot of concerns that if the next big thing is distribution over the Internet it will hurt revenue.

Lynton: I think DVD has been a real gold mine for a lot of reasons. You were selling a packaged good in a big mass market so you could make it huge. You were selling or renting a thing that people didn't consume. You go to Blockbuster ( BBI - news - people ), rent five movies and only watch two. That's a good business to be in. The potential problem with the Internet is that people are going to buy only what they watch and we are going to get paid only for what they watch. It may be a smaller window from a financial standpoint but it will be incremental to the windows we already have.

Do you think Blu-ray will make up for lost DVD revenue?

Lynton: That's the hope, but I'm a little skeptical. The question is whether people will really replace their libraries. Plus it would appear there's already price erosion in Blu-ray, so we're not making the price point we originally hoped for. The entertainment industry at large has pretty much given away high definition to consumers. They haven't really charged a premium for it on television. That makes consumers more likely to buy Blu-ray but less likely to pay a premium for it.
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Old 04-22-2009, 11:35 PM
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Do you think Blu-ray will make up for lost DVD revenue?

Lynton: That's the hope, but I'm a little skeptical. The question is whether people will really replace their libraries. Plus it would appear there's already price erosion in Blu-ray, so we're not making the price point we originally hoped for. The entertainment industry at large has pretty much given away high definition to consumers. They haven't really charged a premium for it on television. That makes consumers more likely to buy Blu-ray but less likely to pay a premium for it.
As a consumer that does not bother me as lot as long as they keep the releases coming which they will as Blu-ray even at a reduced price point is still a lot more revenue than a download.
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Old 04-22-2009, 11:42 PM
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Originally Posted by Kosty View Post
As a consumer that does not bother me as lot as long as they keep the releases coming which they will as Blu-ray even at a reduced price point is still a lot more revenue than a download.
Agree. The studios should not think of Blu Ray as a means for grossly higher margins compared with dvd, but as a means to keep packaged media healthy and relevant in the face of other options.
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Old 04-22-2009, 11:44 PM
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Quote:
Originally Posted by Lee Stewart View Post
" Lynton considers electronic sellthrough as incremental revenue to the current entertainment distribution food chain."
Given what the gentleman actually said:
Quote:
The potential problem with the Internet is that people are going to buy only what they watch and we are going to get paid only for what they watch. It may be a smaller window from a financial standpoint but it will be incremental to the windows we already have.
...the final message is quite different!

Pro-B
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Old 04-23-2009, 12:05 AM
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Originally Posted by Kosty View Post
As a consumer that does not bother me as lot as long as they keep the releases coming which they will as Blu-ray even at a reduced price point is still a lot more revenue than a download.
As total revenue, yes, but aren't margins on downloads much higher than physical media?

If they're worried about consumers only paying for the content they want, wouldn't that push them towards the all-you-can eat model versus an a la cart approach? If they price it comparable to physical models (say the Netflix X at a time plan per month), consumers are still getting the same amount of content for the same price, but at a lower cost to the studios.

That sounds like a win-win proposition.

Scott
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Old 04-23-2009, 12:14 AM
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Edit: moved this comment to the correct thread.

Last edited by luclin999; 04-23-2009 at 12:41 PM. Reason: Posted in the wrong thread.
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