DVD "Release Gap"
DVD sales account for almost one-half of a movie’s domestic revenues; yet, the release of a DVD trails (on average) about 2½ months AFTER the movie’s “run” at the theater. As momentum gathers for digital movie downloads, industry executives are being afforded a golden opportunity to redefine (and control) post theater distribution.
“Release gap,” the time between the initial movie’s release and that of its DVD. Movie theaters count on this as part of their competitive advantage in attracting ticket sales. However, the very core of this distribution model begins to erode as technology breaks the differentiators between the movie theaters and entertainment at home.
DVD Release Date Study
In 2009, the Top 10 Grossing Movies were shown in the theater 53 days. This was up a week over their counter parts for the prior year. However, the release gap in 2009 was 71 days compared to 80 days in 2008. This signals a trend that movie executives are trying to get their DVDs to market while riding the coattails of “sunk” marketing expenditures made on the movies original release. There are a host of other financial objectives far to boring to cover herein, but simply stated to cut this “gap” period in half represents millions of dollars.
In order to eliminate the “gap,” faster methods are needed to bring their movies to market. More and more technologies (partnered separately by Disney, Sony, and others) will soon be introduced, which allows the consumer to own a movie or TV show by redefining ownership as access rights, not physical possession. Consumers pay a single price for permanent access to a movie or TV show across multiple digital platforms. The devices (utilizing Internet access) transmit content to mobile gadgets like iPhones and cable services that allow on-demand viewing. It could also facilitate other services such as online movie subscriptions and more.
As the film industry become more receptive to digital distribution that protects the ownership rights of the movie, another dynamic is altered in the entertainment system.
Tags: New Technologies, Technology Ahead
Follow up to the relative size of the $$$ involves. One one of the above charted movies, total theatrical revenues were as follows: US Gross $533,345,358; International Gross $489,000,000; Worldwide Gross $1,022,345,358. Yep, that’s over $1 billion. US DVD Sales: $232,369,567. This is a bunch of money. Now, calculate the time value of money on $232 million over 60 days. That’s ONLY one financial aspect of this issue.
Didn’t this come up several months back? “Keynote” was the Disney service with silent partners, Apple & others.
Paying for access rights is gaining, especially in the on line music world, Rhapsody etc,. Seems logical that media use is going from owning the individual track, movie, song, to a media manager and pay for use service. Or as many of the kids and hackers. Free, but at a reduced resolution.