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Old 02-25-2008   #19
Vinyl Rules!
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Default Re: Studios Are Trying to Stop DVDs From Fading to Black

Originally Posted by Ken S View Post
From The New York Times, Monday February 25, 2008:

Partial quote: "But the victory of Sony’s new Blu-ray high-definition disc over a rival format, Toshiba’s HD DVD, masks a problem facing the studios: the overall decline of the DVD market. Domestic DVD sales fell 3.2 percent last year to $15.9 billion, according to Adams Media Research, the first annual drop in the medium’s history. Adams projects another decline in 2008, to $15.4 billion, and a similar dip for 2009.

So instead of celebrating the Blu-ray format — which remains a nascent business — the studios are scrambling to introduce an array of initiatives aimed at propping up the broader market. Some efforts, like the addition of new interactive features and changes in how DVDs are packaged and promoted, are intended to prevent further market erosion while nurturing Blu-ray. "
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Don't these people realize that the economy is faltering and most people do not have discretionary income for this kind of purchase? People are losing their homes!

Here are the issues as I see them. Of course,YMMV.

1. [Direct quote from the NYT article] "Technology companies have watered down the DVD market by aggressively pushing Internet downloads."

2. [Direct quote from the NYT article] “Wal-Mart has indicated it is getting bored with older library titles,” said Stephen Prough, the co-founder of Salem Partners, a small investment bank that specializes in film catalogs. “When there is little to no consumer demand at a $6 price point, you’ve got problems.”

3. Now, let me point you to Please read this. The significant information here is:

"Decisions by the FCC and the courts in 2003, 2005 and 2006 relaxed or eliminated most last-mile broadband regulation. Some work remains at the state utility commission level. But today, Verizon is investing $23 billion in new fiber-to-the-home links. AT&T is spending billions more on fiber-to-the-neighborhood and greenfield FTTH."

"Cable companies -- whose broadband services were always mostly unregulated and thus gained the broadband lead versus telecom -- will have to respond in kind. As Verizon and AT&T leapfrog cable's broadband speeds of around 6Mbit/sec., cable will have to transfer more and more of its generous network capacity from TV programming to broadband service. Already, we are seeing cable systems offer 15 or even 30Mbit service. Within a year or two, millions of Americans will have access to broadband every bit as good as world leaders Korea and Hong Kong."

And for those who believe 50 MB to 100MB is years off, (1) You are wrong {obviously none of you making these comments work in the networking industry}; and (2) We have a home in a small rural western North Carolina town of about 6,000, and we get currently get 15 MB DSL, over copper, from Embarq for $29.95/month. Sooner or later either they or our cable provider (Charter) is going to bite the bullet and make fibre available.

This is what is affecting the DVD market here in the US. The DVD sky is beginning to fall, but the studios and DVD companies don't know it nor will admit it yet.

Why? There are no good marketing people working for any of the Hollywood studios. So they don't get it: They think they can change what professional marketers call primary demand and no one can change primary demand - This would be akin to trying to market 28.8 kBps dial-up in today's world of 15 MB DSL.

The few tech companies I've worked with for understand this. The few Hollywood exec's I've talked to only think of technology in terms of DRM and MacroVision: They simply do not understand or want to know about the downloading paradigm shift that is coming. And their eyes glaze over if you try and discuss Broadband Networking with them - They are still intensely focused on DVD's because they control everything from the manufacturing to the distribution and they like having this control.

I do think that somewhere back in the vacant recesses of what they claim is their brain a few of them do realize they will lose much of this control once Joe and Susie start downloading - At this point, their only control will be in producing and providing the content and deciding on what DRM rights to assign to the content.

This is why I think we are reading articles like the NYT article you referenced.
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