Monday, July 06, 2009

Deja Vu All Over Again

The fall being reported in DVD sales in the UK and the US shows how finite the market for video consumption is. The majority of this viewing is though to have been 'lost' to video hire companies like CinemaNow and Netflix and to video on demand services. Cinema and online TV have also played their parts.

Content owners are rapidly having to revisit their business models since DVDs are hugely lucrative, providing four times the profits of video one demand, and twice that of a cinema ticket.

The problem is that the digital distribution market is highly fragmented and managing distribution has become a more complex - and more costly - task.

So, margins are going down, costs are going up and piracy remains an issue. Seems eerily familiar from the music industry. Now we'll find out what the major labels learnt from those experiences.

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