Submitted: August 1, 2011 – 8:57am
Last updated: August 1, 2011 – 9:13am
[Commentary] DVDs used to generate more than $20 billion a year but since 2006 sales have fallen by more than $6 billion, while attempts to reverse the decline with a new format – higher-quality Blu-ray discs – have largely failed. Hollywood is now betting that the consumers who stopped buying physical discs can be persuaded to buy films digitally. But new sales data and analysis of buying patterns raise big questions about whether consumers are willing to spend money to own film and TV content at all, regardless of the format. For an industry desperate to avoid the grim fate of the music business, this presents a serious problem. At stake is America’s biggest cultural export. The most recently available figures from the Motion Picture Association of America show that Hollywood generated a $11.7 billion trade surplus in 2008, larger than industries such as telecommunications, consulting, legal and insurance services. A failure to replace DVD revenues with digital sales means fewer films will be made. The decline is already under way: in 2006 the members of the Motion Picture Association of America released 204 films; by 2010 that had shrunk to 141.