Over a period of almost 30 years up until 2005, the movie industry has seen a year-on-year sales & rentals growth, with DVD sales hitting $16.3 billion and DVD Rentals hitting $6.5 billion in 2005. While DVD sales and rentals have risen 5% and 14% respectively, unfortunately falling DVD prices along with maturing DVD sales and the VHS market dying off have caused overall movie sales to fall for the first time in almost 30 years, from ~$24.5 billion in 2004 to ~$24.3 billion in 2005.
With disappointing DVD sales for 2005, Hollywood is now experiencing the same problem it faced with dropping cinema ticket sales, resulting in disappointing returns on the costs of making the movies. According to the head of distribution for Disney Pictures, one possible way around the issue will be to become creative instead of doing remakes.
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New figures from the Digital Entertainment Group show 2005's DVD sales at $16.3 billion, up 5 percent from 2004, and DVD rentals at $6.5 billion, up 14 percent. But the overall home video market fell slightly, to $24.3 billion from 2004's $24.5 billion. 'The DVD market matured much more quickly than anyone expected," says Scott Hettrick, editor of DVD Exclusive. The industry 'shot itself in the foot by lowering DVD prices too much and too quickly. There is little growth left." |
As this is the first fall in the market for the movie industry, there is a good chance that the movie industry will start putting blame on file sharing, illegal copying and so on. For example, every time there is a drop in music sales, the first thing the music industry puts the blame on is file sharing and they never take into account other things such as consumers choosing other forms of entertainment, poorer selection of good new releases, DRM playability issues, etc.
Source: The Ithaca Journal
