Here's a great chart published in the Wall Street Journal today about how Americans spent money on movies in 2008 and 2009:
A key passage from the related article, by Sarah McBride:
For studios, which count on income from home entertainment to underwrite growing production costs, the trend represents a giant headache. In the early 2000s, studios began counting on the cash bonanza generated by consumers' building up libraries of DVDs. Now, they will have to alter budgets to reflect the shrinking DVD income stream.
Hollywood is already offering more ways for consumers to watch movies at home while bolstering studio coffers, including digital delivery, but households aren't embracing them quickly enough to make up for eroding DVD sales.
While Blu-ray disc sales are growing at a rapid rate, they too represent just a fraction of DVD sales. ...Instead, consumers are flocking to rentals, which represent considerably smaller profit for the studios, especially given the proliferation of $1-a-night rentals from kiosk operators such as Coinstar Inc.'s Redbox.
2009 was an amazing year for theatrical revenues -- perhaps a high water mark, thanks to the recession (movies offer an affordable night out) and an unusually strong and diverse release slate?
It seems clear from these trends that, for today, the bulk of revenues will still be from theatrical releases (if you can promote them and get butts in seats) and DVD sales and rentals. But indies need to have a smart strategy for digital, since that market is poised to grow -- and indies will be more flexible than the studios about pricing, free samples, and release windows, which could give them an edge. (Here's a New York Times story from his morning about how the studios are struggling to make their DRM-wrapped movie files more portable and flexible... without dropping the DRM, of course.)
What do you think 2009's revenue trends mean for indies?
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