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Will Warner Brothers Abandon DVDs/blu-rays?
Uploaded 28 May 2021
Several weeks ago, Twitter, Facebook, and other social media sites blew up with the news that AT & T’s Warner Media had announced that the WB would be abandoning the distribution of physical movie media, i.e., DVDs and Blu-rays, turning sales over to a third-party company. While the rumors were quickly denied, the Warner Archive Collection site now sends consumers to Amazon for the purchase of its classic DVS/Blu-Rays.
The Warner Archive Collection is the home video division for releasing classic and cult films from the company’s library. It began in March 2009 as a manufactured-on-demand DVD series with the goal of making available to consumers previously unreleased catalog films on DVD, without the major expense (advertising, packaging, extras) of a full DVD release. Although the digital transfers without clean-up were from existing prints, the initiative was in fact quite successful; it seems, for now, the Collection will continue operating, but the question is for how long?
The rumors started flying back in January when Warner Pictures Home Entertainment and Universal Pictures Home Entertainment announced that they would form a new joint venture to distribute DVDs in North America for new releases, library titles, and TV content. According to a report in Variety (15 January 2021), the new company was expected to be operational in the first quarter of 2021 but has yet to go public. The deal came as sales of all video disc formats (DVDs. blu-rays, UltraHD Blu-Rays) fell more than 50% between 2014 and 2018, sales dropping from $ 25.2 billion to $13.1 billion. In 2019, sales fell another 9.4% to $5.9 billion.
Meanwhile, in the first half of 2020, digital movie sales ($1.61 billion) overtook DVD/Blu-ray sales ($1.275) for the first time in the US, but those figures don’t even include streaming rentals or subscriptions. Since 2011, platforms like Netflix, Hulu, and HBO have seen sales balloon 1,231% to $12.9 billion. According to Zoe Mills, an analyst at GlobalData, “Streaming has been a significant disruptor in the video market, with the likes of Netflix and Amazon Prime Video enticing consumers to invest in their services at the detriment of physical DVD and Blu-ray sales.” She noted further in a report on the website, Advanced Television: “The Covid-19 pandemic is set to exasperate (sic) this market even further as not only is there a major new entrant to streaming but also with more people spending time at home, investment in these subscription services appears more worthwhile as consumers are able to use them more regularly.”
Format changes are of course nothing new to the film business. For more than 100 years, from its invention in 1895 to 2009, when 35mm prints as a medium for theatrical projection suddenly became obsolete with the introduction of so-called Digital Cinema Packages (DCPs). However, 35mm as a film distribution medium had already been impacted by the introduction of 16mm in 1924, which quickly became a format for home viewing and for non-theatrical screenings in educational institutions. By the 1950s, virtually all the major studios operated non-theatrical divisions to distribute their new and classic films, once the 35mm theatrical market had been saturated.
With the introduction of VHS, a videotape format for home use in 1976, home viewing became much more practical and lead to a huge expansion in the market. By 1977, the first video rental store opened in Los Angeles. But the industry was worried that VHS would cannibalize box-office and so they sued SONY in 1976. As the cost of VHS players dropped to practically nothing, though, home video sales increased to $ 18 billion, creating a huge new income stream without effecting theatrical sales. In March 1997, the first DVD players were introduced and soon drove VHS from the market, given its superior image quality and ease of use.
However, with each of these format changes, fewer and fewer classic films have been available. Indeed, while VHS lead to the founding of numerous smaller distributors for public domain content, given the extremely low cost of transferring films to video, the introduction of DVDs lead to a shrinkage in the market, given digitals much higher production costs. With the new streaming services, classic and foreign films have become even more difficult to find and see. Yes, we have the Criterion Collection and You-Tube, but old American films from the classic studio era are virtually invisible on Netflix and many other streaming services. It remains to be seen, how many classic titles will be available on HBO Max (Warners), and the Paramount and Disney Channels.
Meanwhile, a number of smaller vendors, including Kino, Milestone, Shout Factory, Flicker Alley, and Drafthouse Films are betting that DVDs will stay around a bit longer, because a small but dedicated group of consumers still want to collect films, like holding the physical object in their hands, and believe the image quality of physical media still beats streaming.