I read in AdWeek today - that several studios are making cuts in their Home Entertainment divisions. Lagging sales are the given culprit. Warner Bros dropped 50 people from US Home Entertainment and Disney is targeting 250 positions. According to industry trade organization Digital Entertainment Group, the purchase of DVDs, digital movies, and Blu-ray discs fell 18% in the first quarter of this year compared to last year’s figures. Newer streaming services will, of course, offset this revenue slightly but apparently not enough.
Hollywood's problem is that they haven't really grasped the bandwidth factor. The music industry didn't see a real bad falloff until ADSL came along. Films have had the luxury of file sizes around 700-1200MB and thus making it a pain to wait for downloads legal OR illegal. With broadband penetration averaging 10-20Mbps (with 60-100Mbps in many places) you now have an equation where it becomes much easier and quicker to pirate a film (and fortunately stream legally) rather than purchase a DVD or rent a physical copy.
The real dip for Burbank is just around the corner with mobile LTE networks hitting 30-60Mbps and resolution/quality to look viewable on a mobile device being about 1/2. They ain't seen nothin' yet.
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