The current global economic crisis has hurt the bottom lines of many studios, forcing them to rethink ways to increase profits during times when fewer people are venturing out to the theaters. DVD used to be the go-to solution, but over the past few years profits from DVD sales have plateaued and even begun to drop as the market has become saturated. In fact, one of the few bright points on studios' balance sheets has been Blu-ray, an area where profits are good, and sales continue to increase, but apparently not fast enough.
Since late last year, studios have been reevaluating their Blu-ray strategy in order to speed up consumer adoption of the format. Sure, Blu-ray sales have continued to rise since the beginning of the year, but studios want the high definition format to replace DVD, not commingle with it. DVDs no longer provide studios with the buckets of money they used to, and rampant piracy in Asia and South America are robbing them of bottom line cushion.
The arguments as to why Blu-ray hasn't killed DVD yet are well known. First, it was because there were two high definition formats. Check. Next, it was because players cost too much, and while Blu-ray players still come at a premium to DVD players, its getting much, much closer. Then, it was not enough movies available, but today's Blu-ray catalog is huge, with ample selection no matter what your preferences. Check. Now, its that Blu-ray titles are either too expensive, or don't provide enough value. That is where the studios have stepped up to the plate.
For those of you who have been using our new
deals tracker, you may have noticed something interesting. The major Hollywood studios are dropping their older catalog prices, resulting in Amazon pricing them for as low as $15! Now, while the DVD editions of these films are typically under $10, the price reduction should help draw in those who couldn't justify the Blu-ray purchase due to the price. For Fox, a studio who has been widely criticized for regularly pricing catalog titles higher then other studios price their new Blu-ray releases, this was a drastic, but necessary reduction that is sure to increase sales.
Another price reduction technique employed by both Paramount and Universal has been to group titles together for sale at a reduced price. Both studios have decided to group related titles, such as Paramount's '
Sweeney Todd & Sleepy Hollow set which costs less than buying '
Sweeney Todd' alone, and Universal's '
Ultimate Unrated Comedy Collection' which saves you a few bucks over buying the titles individually.
The other side of the issue is value. As a format, Blu-ray was built to provide more value for viewers by adding special features like BonusView picture-in-picture and BD-Live content. In light of Managed Copy becoming vaporware, studios have also begun providing digital copies of films with their releases, allowing users to legally copy the film to their portable video devices or computers.
An idea that Disney first implemented, and now Fox will follow, is the idea of providing a DVD of the film with the purchase of the Blu-ray. Sure, die hard Blu-ray fans question the need for a DVD version of the film, but those families who have DVD players in their children's rooms or in their vehicles know the benefit to having both. Play the Blu-ray on the big screen, and throw the DVD in the car for those long trips. In other words, studios are making Blu-ray more mainstream.
One drawback to this new found enthusiasm is that studios have begun to withhold title announcements. While they are increasing the number of releases hitting store shelves, the announcements are coming much closer to the actual release date instead of months before. Only last year it was normal to see title announcements 3-5 months before release. Now, we are seeing some titles announced with only a month's notice. While this may seem as somewhat disappointing, it does help alleviate upcoming releases mysteriously disappearing.
At the time, many spoke about how 2008 would be the year that Blu-ray would either come into its own or painfully fade away. Looking back, it may be more accurate to say that 2008 was the year for Blu-ray hardware - seeing the drastic price reductions of the pre-holiday season - and that 2009 is the year for Blu-ray movies. While no one has specially come out and said it, there is a very visible change in the studios' Blu-ray policy. Having followed this format from the very beginning, I can honestly say that there were times were I would doubt a studio's commitment to Blu-ray. I don't think anyone could say that today.