Echoes of the Music Business Give Chills to Studio Executives as DVD Revenues Plunge 44%!

May 13, 2011  •  Post A Comment

As consumers opt to watch movies and TV via low-cost rentals or online streaming through services such as Netflix, the revenues collected by studios from DVDs plunged 44% last year, according to the Los Angeles Times’ Company Town blog.

A study by SNL Kagan revealed that the wholesale revenue from DVDs last year was $4.47 billion, compared with $7.97 billion in 2009, the story says. Sales declined even though studios increased the number of titles by 18%, the piece adds.

While DVD sales may be declining, spending on video on demand and digital downloads jumped 19% last year to $2.5 billion, according to the industry trade group Digital Entertainment Group.

DVD sales are the largest segment of the movie studios’ home entertainment business, the story says, and ongoing erosion in the segment has taken a toll on the bottom line. Among the recent signs of trouble, Walt Disney Studios had a 14% quarterly dip in home entertainment revenue, while Universal Pictures saw the segment fall 24%.

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