IN “THE RING”, a Hollywood remake of a Japanese horror film, a videotape has a deadly effect on those who watch it. In reality the opposite is happening: viewers are killing Hollywood’s home-video business. People are rapidly discovering new ways of watching films at home that pose a grave threat to the most profitable part of the film business.

In America, by far the biggest home-entertainment market, spending on videotapes and discs has dropped by 29% since 2004. Piracy is one reason. Another is the end of the format-replacement cycle: once you have a DVD of “Casablanca” you don’t need another one—and you probably won’t buy a high-definition Blu-ray disc, either. But the big reason is the rise of cheap, convenient rental outfits like Redbox, which runs kiosks, and Netflix, which streams some films and sends others through the post. The move from buying to renting is a calamity for Hollywood, a low-margin business that has come to rely on disc sales to push films into profitability.

Like music, newspapers and books before it, the film business has been disrupted by innovative, fast-moving distributors whose products have caught on with the public. Tinseltown’s attempts so far to see off the threat have fallen flat, partly because the studios have failed to co-ordinate their efforts. But if Hollywood moves quickly and boldly it should be able to disrupt the disrupters.

Led by Sony, a consortium of studios, technology firms and retailers are working on a new way of distributing digital copies of films. The idea is that consumers will be able to buy the rights to films stored “in the cloud” and stream them to any device. That should make buying more appealing. But it also gives the studios an opportunity to go straight to consumers.

At the moment Hollywood is a business-to-business industry: it rents films to cinema chains and ships discs to big-box retailers and rental firms. Digital distribution should allow it to become much more consumer-facing. The studios could greatly expand their efforts to sell films directly. They could offer to upgrade existing DVDs to digital files. At a minimum, they could develop customer databases that they could use to refine their marketing campaigns. The studios are old-school advertisers: every year they spend billions of dollars on scattershot campaigns that often hit the wrong people. Every dollar spent trying to persuade a grandmother to see a Quentin Tarantino film is a dollar wasted (Quentin’s granny excepted).

Here’s looking at you

Disney and Pixar are brands, but most studios are not. Nobody goes to see a film because it is made by Fox. Increasingly though the films they release are brands—consider “Harry Potter” or “Pirates of the Caribbean”. The studios also employ actors and directors who are brands in their own right. They should market directly to people who love those brands.

It will not be easy to take such a radical step. But the trail has been blazed by another medium. Record labels have been hit much harder by piracy and have seen retail outlets disappear. They have been forced to deal directly with consumers. Lady Gaga’s website is run not by the pop star but by Universal Music, which uses it, and the consumer information it collects, to sell directly to her fans. That outfit has become far better at mining consumer data than the film studios. A common refrain in Hollywood is that the film business must not go the way of music. In this sense, at least, it should.

http://www.economist.com/node/18388998

I know I buy films or stream them on Netflix. I think I've been to two theatrical releases in the past year and one was just being nice.

Netflix streaming has limited appeal but I get to watch a lot of foreign films which is great.

I detest going to the movies....I think it's outdated, but that's my opinion.

Netflix has said many times that they're working towards having 100% of their library available for streaming. It sure looks like that's the way to go. I personally like the experience a whole hell of a lot more than renting or buying discs. With instant availability, why would you need to purchase hard discs, anyway?

The move from buying to renting is a calamity for Hollywood, a low-margin business that has come to rely on disc sales to push films into profitability.

In the iTunes Store (for example), you can buy or rent. What's the difference between that and choosing between the same in a bricks-and-mortar Blockbuster, or whatever?

"IF" this is true.......cut back on talent cost. Paying someone $10/20 million a pciture does not make sense if the flick is losing money. I don't believe a word of this.

From what I've seen, the quality of streaming or PPV is not as good as blu-ray discs so I will continue to rent/buy those for the time being.

I still enjoy going to the movies as well. But I know my situation is unique in that my cinema is cheap ($7 admission), within walking distance and shows mostly art house films which means it's hardly ever crowded and I never have to deal with obnoxious teens interrupting the movie.

JerseyKRS said:

I detest going to the movies....I think it's outdated, but that's my opinion.

Netflix has said many times that they're working towards having 100% of their library available for streaming. It sure looks like that's the way to go. I personally like the experience a whole hell of a lot more than renting or buying discs. With instant availability, why would you need to purchase hard discs, anyway?

I'm really disappointed in Netflix's streaming selection. TV shows are okay, but for movies - nothing. I keep telling my wife to cancel it.

SUPRMAN said:

IN “THE RING”, a Hollywood remake of a Japanese horror film, a videotape has a deadly effect on those who watch it. In reality the opposite is happening: viewers are killing Hollywood’s home-video business. People are rapidly discovering new ways of watching films at home that pose a grave threat to the most profitable part of the film business.

In America, by far the biggest home-entertainment market, spending on videotapes and discs has dropped by 29% since 2004. Piracy is one reason. Another is the end of the format-replacement cycle: once you have a DVD of “Casablanca” you don’t need another one—and you probably won’t buy a high-definition Blu-ray disc, either. But the big reason is the rise of cheap, convenient rental outfits like Redbox, which runs kiosks, and Netflix, which streams some films and sends others through the post. The move from buying to renting is a calamity for Hollywood, a low-margin business that has come to rely on disc sales to push films into profitability.

Like music, newspapers and books before it, the film business has been disrupted by innovative, fast-moving distributors whose products have caught on with the public. Tinseltown’s attempts so far to see off the threat have fallen flat, partly because the studios have failed to co-ordinate their efforts. But if Hollywood moves quickly and boldly it should be able to disrupt the disrupters.

Led by Sony, a consortium of studios, technology firms and retailers are working on a new way of distributing digital copies of films. The idea is that consumers will be able to buy the rights to films stored “in the cloud” and stream them to any device. That should make buying more appealing. But it also gives the studios an opportunity to go straight to consumers.

At the moment Hollywood is a business-to-business industry: it rents films to cinema chains and ships discs to big-box retailers and rental firms. Digital distribution should allow it to become much more consumer-facing. The studios could greatly expand their efforts to sell films directly. They could offer to upgrade existing DVDs to digital files. At a minimum, they could develop customer databases that they could use to refine their marketing campaigns. The studios are old-school advertisers: every year they spend billions of dollars on scattershot campaigns that often hit the wrong people. Every dollar spent trying to persuade a grandmother to see a Quentin Tarantino film is a dollar wasted (Quentin’s granny excepted).

Here’s looking at you

Disney and Pixar are brands, but most studios are not. Nobody goes to see a film because it is made by Fox. Increasingly though the films they release are brands—consider “Harry Potter” or “Pirates of the Caribbean”. The studios also employ actors and directors who are brands in their own right. They should market directly to people who love those brands.

It will not be easy to take such a radical step. But the trail has been blazed by another medium. Record labels have been hit much harder by piracy and have seen retail outlets disappear. They have been forced to deal directly with consumers. Lady Gaga’s website is run not by the pop star but by Universal Music, which uses it, and the consumer information it collects, to sell directly to her fans. That outfit has become far better at mining consumer data than the film studios. A common refrain in Hollywood is that the film business must not go the way of music. In this sense, at least, it should.

http://www.economist.com/node/18388998

I know I buy films or stream them on Netflix. I think I've been to two theatrical releases in the past year and one was just being nice.

Netflix streaming has limited appeal but I get to watch a lot of foreign films which is great.

All the Hollywood studios claim piracy is eating into their movie profits, but in reality it's still a pain in the ass to download a pirated movie, even with high speed broadband and BitTorrent clients, because it can still take up to an hour to downlaod a movie, and there's no guarantee that you won't download some virus or malware with that movie.

Now there's a case to be made for Netflix and Redbox eating into profits, but the studios are aware of that, so they are looking to significantly hike the licensing fees they currently charge Netflix and other outlets for streaming movies. But the real problem the Hollywood studios have is that they are releasing a ton of crap into the marketplace which people don't want to see in the first place or ends up being much less than hyped. As bad a some music is, there are a lot of albums which people will buy to listen to time and time again. And while there are some movies which would be much beloved in the home video library (Gone With The Wind, the Star Wars series, The Wizard of Oz, The Sound of Music, The Godfather, Goodfellas, The Lord of the Rings trilogy), most people aren't rushing out to get that cherished copy of Battlefield Earth, The Adventures of Pluto Nash, or The Waterboy. In fact, the movie rental industry hasn't gone away; it's just gotten a lot cheaper and more efficient. When movies had to be transferred to tape, it was a relatively expensive process, and they needed stores to display these tapes; ergo, the presence of Blockbuster and Hollywood Video. But now that all movies are digitally processed and cost only pennies to reproduce, the cost of creating said discs has also gone down.

Graycap23 said:

"IF" this is true.......cut back on talent cost. Paying someone $10/20 million a pciture does not make sense if the flick is losing money. I don't believe a word of this.

But if you are counting on that actor/actress to fill seats, you pay them what they are asking or someone else will.

Talent costs.

Most movies made lose money, so that's not new to Hollywood.

sextonseven said:

From what I've seen, the quality of streaming or PPV is not as good as blu-ray discs so I will continue to rent/buy those for the time being.

I still enjoy going to the movies as well. But I know my situation is unique in that my cinema is cheap ($7 admission), within walking distance and shows mostly art house films which means it's hardly ever crowded and I never have to deal with obnoxious teens interrupting the movie.

The quality isn't as good. It's very noticeable to me. Bearable though for the most part.

I like your situation. I no longer live within walking distance of a theater. I chose to walk to work instead.

abigail05 said:

JerseyKRS said:

I detest going to the movies....I think it's outdated, but that's my opinion.

Netflix has said many times that they're working towards having 100% of their library available for streaming. It sure looks like that's the way to go. I personally like the experience a whole hell of a lot more than renting or buying discs. With instant availability, why would you need to purchase hard discs, anyway?

I'm really disappointed in Netflix's streaming selection. TV shows are okay, but for movies - nothing. I keep telling my wife to cancel it.

I agree. If it weren't for the foreign films I think I'd do without.

JerseyKRS said:

I detest going to the movies....I think it's outdated, but that's my opinion.

you're not the only one

:nod

The reason Hollywoods "Disc problem" exists is because noone wants to buy crap. I haven't bought a DVD Movie in a long time. Purely because every film I have seen is a repetition in story line, action scenes and actors / actresses.

All these Animated movies for kids, same old story lines, even my Kids notice that so obviously huge failure there on behalf of movie writers.

Action movies (yaaaaaawwwwn)

Remakes of Superhero comic characters etc Uber Yawn........

Prequels of sequels that are just so bad it makes you wanna use the DVD Disc as a Cup Mat.

I am a Resident Evil fan, well I was until I watched Afterlife. This movie clearly shows that the writers didn't even try to create a story in this episode. It was super lame.

I'm a re-watcher. If I love something I'll watch it over and over. So I have no problem buying hard copies (Blu-Ray these days) of the movies I love. Also, man, a Blu-Ray on a big, high quality HD television looks so incredibly bad ass. I fought it for a while, but I lost. I can clearly see the difference between this and any other format that has existed in my lifetime.

Unfortunately, that includes the best theater presentations I've ever seen, as well. And with the ever increasing rudeness of theater crowds, plus the ever rising costs, I'd rather buy a movie than pay $20-50 (for two, $50 is not unusual) to see a movie.

Renting? Eh, sometimes I rent. And I've had a NetFlix subscription for a few years now (I don't think their streaming looks good enough yet - pretty disappointed with it, actually). I don't believe either of those things are the reason for the industries problems, though. They said the same thing about VHS, cheap cable, DVD, etc. I'm not sure that releasing a ton of crap (which they do) is the main problem, either. I think their biggest problems are internet piracy and the cost of going to the movies.

How can a family of four or five possibly justify going to the movies when it costs more than most of their monthly bills (on a bill by bill basis, not total). I sure as hell wouldn't do it. To combat this they keep raising the prices. The movie business had a record high gross last year, with record low attendance. Sooo...

Why wouldn't any of the now two generations of computer literate people download movies and watch them for free just to thumb their noses at "Hollywood"?

I have no idea how this is all going to work out in the end. I don't expect theaters to ever go away completely, but I'm not sure the current business model will work much longer. Its very likely that not too far in the future new movies will be available in theaters (for very limited runs), on disc and available for streaming (on sites run by the studios) on or very near the same day (its been done already, other than the studio part). That's the only way they could cover all their bases at once. And it still won't do a damn thing to slow down piracy.

JoeTyler said:

JerseyKRS said:

I detest going to the movies....I think it's outdated, but that's my opinion.

you're not the only one

:nod

I have always left the multiplex disapointed. I do like going to the restored 1920's theatre in town, it feels more like a night out.

SUPRMAN said:

abigail05 said:

I'm really disappointed in Netflix's streaming selection. TV shows are okay, but for movies - nothing. I keep telling my wife to cancel it.

I agree. If it weren't for the foreign films I think I'd do without.

I'm pretty sure it's just for now.....

JerseyKRS said:

SUPRMAN said:

I agree. If it weren't for the foreign films I think I'd do without.

I'm pretty sure it's just for now.....

I don't understand why you can stream Cops & Robbersons but not Star Wars. Seems like somebody should get on that today.

who buys movies?

Hollywood doesn't get it do it?

NDRU said:

who buys movies?

I do.

Like Cerebus, I rewatch movies often. No way am I paying to stream/rent The Nightmare Before Christmas every December. Better to buy it on Blu-ray disc and be done with it.

I find it easier to just buy DVDs these days rather than rent them. Since DVDs have taken over, you can buy them for like $15 or $20. It's not like back in the days when VCR tapes were like $35 or $40. I'm not happy with watching a movie on a computer. I want to watch on a TV screen where I can sit on a couch and be comforatable, plus the screen is much bigger than the computer screen. Also, I like to own the movie so I can watch it as many times as I want. Even back in the days of renting VCR tapes, I always dubbed the movie onto another tape when it was possible for myself before returning the movie to the video store.

As for going to the movie theater, that was never my thing. I can count on two hands how many times I've been to a movie theater as an adult. I went to see the four Prince movies, "Truth or Dare", and "54". That's about it. As a child, I was always told "wait until they show it on TV" and they usually did and this was back in the days when there were only three networks. When VCRs became affordable, I saw no use in going to a theater if the movie was going to be available at home. At home, you can smoke (the dumbasses had banned smoking in theaters once I got grown), you could eat whatever you wanted, you could rewind something you missed when you weren't paying attention, and if you saw nudity that turned you on, you could whip your dick out and jack it off. You can't do these things in theaters. However, I do wish I had been older in the days when porn flicks were in the theaters. I was lucky enough to go see one porn flick in a theater before they became extinct. I saw several dicks that night. Not on the screen but in the surrounding seats.

.

.

.

[Edited 3/23/11 14:28pm]

sextonseven said:

NDRU said:

who buys movies?

I do.

Like Cerebus, I rewatch movies often. No way am I paying to stream/rent The Nightmare Before Christmas every December. Better to buy it on Blu-ray disc and be done with it.

I'm definitely gonna buy some DVDs. Maybe I need to just bite the bullet and go on Amazon and order a movie one of these days. Since my thing is comedy. I'll buy Richard Pryor's "Live in Concert" DVD first.

NDRU said:

sextonseven said:

I do.

Like Cerebus, I rewatch movies often. No way am I paying to stream/rent The Nightmare Before Christmas every December. Better to buy it on Blu-ray disc and be done with it.

I actually have a few myself, but there are very few I want to watch more than once, maybe twice. It's not like music IMO And I don't think I have ever bought a new one. I've gotten the $5 specials at blockbuster though

I love watching movies obviously. And my home theater system is pretty decent so that makes the experience all the more enjoyable. I have no problem with buying a film in HD if I think I'll watch it more than twice.

sextonseven said:

NDRU said:

I actually have a few myself, but there are very few I want to watch more than once, maybe twice. It's not like music IMO And I don't think I have ever bought a new one. I've gotten the $5 specials at blockbuster though

I love watching movies obviously. And my home theater system is pretty decent so that makes the experience all the more enjoyable. I have no problem with buying a film in HD if I think I'll watch it more than twice.

Co-sign.I own movies I've seen repeatedly. The best part is if there is something I want to see, I can put it on and enjoy. Feeling a movie coming on now.

NDRU said:

who buys movies?

I buy every single movie that I like and would want 2 see again.

I hate going to a movie theater...always have, always will, especially those huge multilplex ones that are owned by big corporations.

Occasionally, I do go to smaller, family owned theaters though, most of the time when it´s some sort of underground movie. And I love the atmosphere in those smaller venues, probably because the films that I watch there usually attract more civilized and more intelligent, well behaved audiences.

It´s not that I´m stingy but I just don´t like the idea of being with so many rude strangers in one dark room, and of course the ticket prices have gone through the roof, and don´t get me started with the concession stands.

If the film industry, including actors, think that the current ticket prices and the millions that some lame actors receive are justified, then go on, but don´t be surprised if in the near future the film industry suffers from the same fate as the music industry.

Like Cerebus and Sextonseven, I love watching good films again and again, and I like to watch them on a big screen, in good quality. I still love renting DVDs from my favorite family owned DVD store around the corner, and I buy a lot of DVDs because of the artwork, the quality, the idea of supporting the industry etc.etc.,so I don´t really download anything.

I hope the industry will learn from its mistakes before it´s too late.

Graycap23 said:

NDRU said:

who buys movies?

I buy every single movie that I like and would want 2 see again.

I stand corrected. I guess there is a reason Target sells all those DVD's!

The pirating of movies along with digital books will only continue and go the same way music CD's have gone.

Hasn't anyone noticed that best buy reduced their shelf space for DVD's & Cd's in their stores.

I had wondered about this because you always hear about cd pirating, but not so much about movie pirating. I guess it is a problem. Certainly makes sense, since I am always seeing illegal movies for sale!

The day is coming soon when all entertainment (music, film, books, games) will be digital files on a massive hard drive in a person's home.

I can see fine art going digital after that. Hang a digital frame on your wall and with the press of a button, a different painting or photograph can appear inside. Sculpture can be digital too.