Panelists: Digital media not a threat to DVD
By Susanne Ault -- Video Business,06/26/2008
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JUNE 26 | LAS VEGAS—At Home Media Expo’s first ‘Digital Media Day’ Thursday, participants said there is a definite need for the DVD industry to understand online media, but such technology is not as destructive to traditional entertainment as once feared.
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Underscoring some urgency to embrace digital, the Entertainment Merchants Assn. has been creating business standards for Web-based content since January. At that time, EMA set up several working groups to develop comprehensive guidelines for how retailers and studios can engage in digital businesses. One group, for example, is developing a standard language retailers can use when promoting digital content.
“Just the business terms are very different, and it’s very frustrating,” said Mitch Mallen, an executive with Image Entertainment and chair of the terminology working group at EMA. “With electronic sell-through or EST, there is also DTO (download-to-own) and PVD (permanent video downloads). It’s too much.”
EMA promises to post its recommendations for digital business on its Web site shortly.
Although EMA is advocating for digital at this year’s conference, participants like Lionsgate’s digital media president Curt Mavis stressed that the home entertainment industry should not be concerned with cataclysmic change.
“At Lionsgate, we don’t view digital as something that will cause DVD and Blu-ray to disappear,” he said. “In 1999, the perspective was that digital media will take packaged media out of the picture forever. [That thinking] has shifted pretty dramatically. This isn’t a revolution, but more of an evolution.”
To make his point, Marvis estimated that online video sales today represent a $250 million annual business. DVD stands at $25 billion.
“Digital represents about 1% of the [home entertainment] pie,” Marvis said.
The biggest online video service, Apple’s iTunes, touted selling and/or renting 50,000 movies a day.
Rentrak home entertainment senior VP Chris Roberts acknowledged his own company is going to be starting a digital video tracking service soon. He presented statistics that emphasize that online media viewing is growing, but that the figures may not necessarily mean that it will compete head-to-head with feature film DVD.
Over the next six years, consumer spending on the Internet should grow to $70 billion, noted Roberts, citing aggregated research sources. That compares to $184 million in 2006.
But the most popular online video, Roberts said, citing NPD Group, is TV shows. In 2007, 2% of Web-based homes purchased video content online, and 77% of that was TV.
Alex Carloss, executive VP and general manager of worldwide digital distribution at Paramount Digital Entertainment, does see strength with digitally delivered feature films. The company debuted Jackass 2.5 online before launching it on DVD two weeks later. Yet its digital bow had no negative bearing on its following sales and rentals on DVD.
“Jackass 2.5 was seen by 12 million consumers on [the combined] platforms,” said Carloss. “Each of the models was a roaring success. … We have a desire to experiment and innovate the digital space.”
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| Submitted by: | Bill Myers (bill@videoactive.com) 6/27/2008 9:22:09 AM PT |
| Location: | Miami Beach, Florida |
| Occupation: | Vieoactive, CEO - Producer/Director |
I agree with the panel. The only change is the addition of downloading to the overall manner in which consumers access or purchase content. And, this method will grow and generate high profits. The portability and gifting factors remain popular for all hard-copy media; CDs, DVDs and video cassettes. Yes, even video cassettes continue to sell. Schools and libraries purchase vast amounts in 2007-2008. People still have VHS player/recorders -- as long as they work, consumers will continue to watch prerecorded movies, television shows and family recordings. Additionally, with over 200 million DVD players in consumer homes as well as over 9 BILLION DVDs sold, this medium is here to stay for a long time to come.
This is one big reason I continue to produce all kinds of special interest media. The delivery systems continue to expand and struggle for new content. Consumers demand more than feature films and TV shows.
From a producer, director, writer and label owner, my prospective during the past 30 years in the media business is that consumers will buy whatever is available and their behavior can be predicted - they will buy everything from napkin folding to training exercises for Navy Seals. There are tremendous investment opportunities with respect to owning media content regardless of delivery systems and methods in the digital age.
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