Investing in Transactional Home Entertainment Is a Smart Business Move [Media Play News]

Investing in Transactional Home Entertainment Is a Smart Business Move [Media Play News]

THOMAS K. ARNOLD

May 26, 2023 | The rise of streaming has been well-documented in the media, as has the concurrent decline of the transactional business. Disc sales are a fraction of what they once were. In 2006, consumers spent more on disc sales and rentals, $24.1 billion, than ever before – or since. Last year, according to estimates from DEG: The Digital Entertainment Group, the total tally was less than $2.1 billion. Digital sales and rentals, despite a valiant push from both studios and retailers, have failed to make up for all this lost revenue – in 2022, they brought in just $4.2 billion, according to DEG.

But with the red ink flowing from streamers, it’s becoming clear that the SVOD business model is unsustainable, given the high cost of content and the low price for monthly all-you-can-watch subscriptions.

And that’s prompting some of the industry’s smartest minds, from Bob Iger to Bill Rouhana, to urge their brethren to step back for a moment and reconsider their window strategies. Historically, movies have rarely made enough money at the box office to turn a profit. They relied on home video, first VHS and then DVD/Blu-ray Disc, as well as pay TV and foreign TV rights, to turn the balance sheet in their favor.

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