Sunday, July 20, 2014

Free Fall

It wasn't long ago that Disney direct-to-video animated features were major profit drivers. But that was then.

... Over at least the past five years, Disney's home entertainment operations, which include the entertainment giant's DVD, Blu-ray, and digital movie distribution sales, have seen revenue fall significantly. Between 2009 and 2013, revenue from this part of Disney declined by 37% from $2.76 billion to $1.75 billion, with no signs of improving.

The main driver behind this decline in revenue has been lower units sold as consumers move away from physical and downloaded content in favor of Subscription Video on Demand (SVOD). Between just 2012 and 2013, the company's unit count fell 19%, signaling that the future of Disney's home entertainment business might be in doubt. ...

Which explains, in part, why the Tinkerbell series has wrapped, the second Planes movie went out as a theatrical, and Disney Toon studios have had sizable layoffs over the past several months.

In the eighties, nineties, and early oughts, cassettes and little silver disks made a lot of money. But not so much anymore. Technological change moves on, sweeping older business models before it.

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