Hollywood studios want you to buy more DVDs Buzz this

Posted by Prasada Martala Nov 12, 2009

In an attempt to increase profits from the already declining DVD sales, Hollywood studios are planning to keep new DVD releases away from movie rental services like Netflix, Redbox and Blockbuster as many as 30 days. By doing so, studios are expecting that people would buy more DVDs instead of renting them (at least in that 30 day period). While Blockbuster and Netflix seem to be agreeing to this new mandate from Hollywood studios, Redbox is fighting the proposal as it would negatively impact their business model. Redbox has a reason to oppose this proposal more than Netflix or Blockbuster as majority of it's revenues come from new DVD releases. Netflix and Blockbuster seem to agree to this proposal as most of their revenues come from old DVD rentals and Hollywood studios are willing to offer them huge discounts on new DVD releases.

While this apparent decision by Netflix and Blockbuster may boost their profits in short-term it would affect their business model in long-term as people would try to avoid this moratorium by waiting 30 more days for the DVDs to be available for rental or Looking for ways to download/watch illegal copies of movies.With an average period of 3-5 months between theatrical release and DVD release, people may decide to wait 30 more days to rent the DVDs instead of shelling out $20 or so to buy them when they are available. Also, penalizing movie rental customers to wait while making DVDs available for sale will make more people to look for options like illegal downloading.

As digital download/online rental  is becoming more popular, studios and movie rental services should find ways to make them more mainstream and affordable instead of forcing customers to pay more for their movie watching experience at home.

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