Movie Lovers Shunning DVD, Moving To Download/Kiosk-Based Rental Options - HotHardware
Movie Lovers Shunning DVD, Moving To Download/Kiosk-Based Rental Options

Movie Lovers Shunning DVD, Moving To Download/Kiosk-Based Rental Options

A very interesting new report at the Wall Street Journal has thrown a huge assumption from 2009 in the face of itself. If you'll remember, many entertainment analysts said that consumers could be spending more time in front of the television (instead of at the box office) during 2009 as they struggled to curtail entertainment spending in the face of the recession. It all made sense--consumers looking to cut back would be likely to stay at home on a Friday night and watch something on ABC instead of shelling out $15 per ticket (in large cities, anyway) at the cinema.

In fact, that's exactly what didn't happen. 2009 marked the first year since 2002 that U.S. consumers spent more money buying movie tickets at the theater than they did to watch movies at home. $9.87b was spent at the cinema (a 10% increase over 2008), while sales of DVDs sank 13% to $8.73b. Now analysts are suggesting that shifting trends in the way consumers engage and consume media are to blame/thank, and movie studios are scrambling to alter their business models to compensate.

Without a doubt, the massive success of Netflix and Redbox--both of which offer extremely cheap rental rates of new and old movie releases--has had something to do with this. What evidently happened was that instead of cutting out the cinema in '09, consumers simply cut their spending on those massive DVD collections. They decided to rent instead, and that's definitely hurting the bottom line of the studio. Now, those same studios are looking to at-home rental options that generally charge a bit more in order to get movies in front of faces faster. Call it the "instant gratification premium."



And with boxes like the Apple TV, Vudu and Roku getting hotter by the day, we're not surprised to see studios moving in this direction. It's clear that downloadable media is the future, and it already has a place in the lives of those on the cutting edge of technology. Broadband connections in the U.S. still need to get a touch faster overall before it's more commercially viable, but we're certain that'll come in due time. What about you? Did you spend more or less at the cinema in '09? Did you spend more or less on at-home entertainment compared to '08?
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The strangest thing about this trend is trying to figure out how the increase in movie ticket revenue (after inflation) tracks against the high unemployment figures of 2009. It's logical to think that people rented more movies at cheap rates as opposed to buying them, but why the uptake in movie spending?

One wonders if moviegoers were spending more here and less on a more-expensive form of entertainment. Movies are typically considered fairly pricey, but going to a movie once a week would be cheaper than eating out at a decent-to-nice restaurant 3x a week assuming you avoided the concession stand.

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Good thoughts Joel. I think the experts forgot to consider that cinema movies was also another way of cutting down on costs. Family Vacations and traveling was replaced with movies. There's also been a resurgence of 3D movies, especially with the release of Avatar.

People are looking for escapism in an economic system that contradicts itself. What do I mean by that? Unemployment is increasing, health care costs are still high, credit it tight and the housing market hasn't rebounded but Wall Street is doing extremely well. It's time we see that Wall Street's performance is not indicative of our current economic climate as it has been in the past. People are really struggling out there.

The Dow Jones Average only shows how well the upper echelon of our social class is doing, nothing more.

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Perhaps the blu-ray vs DVD confusion has temporarily hurt DVD sales as well?

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Netflix I understand... But I don't get why Redbox is such a huge success. It's no more convenient than going to blockbuster or hollywood. If it's cheaper... I guess...

My sister loves red box. I guess I should ask her :-P

I've been meaning to Cancel my premium cable and get a netflix subscription lol

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