Slumping Film Industry Looks to Home Video For Economic Salvation in 2012

Coming off a year where box office sales showed some of the most disappointing weekends in quite a few years, and where the DVD buying bubble has now clearly burst, you could say that it’s starting to look like the film industry is in some financial trouble. They’ve tried to find new revenue in the form of 3D films, but as the months have worn on ticket sales to 3D showings have been bringing in less and less extra cash, and sales of 3D enabled home equipment pretty much never got out of the gate with any momentum. Factor in the rise of cheap rentals through Redbox kiosks and all-you-can-eat streaming services like Netflix, and the film industry as a whole is faced with the daunting task of how to keep their content seen as being a commodity.

All hope doesn’t seem to be lost for makers of motion pictures, however, THR talked to a number a studio heads about what’s been working for them over the last year and where they expect to see growth in 2012, and there seems to be some hope. Over and over again the two areas where movies seem to be making more money than they did in year’s past is through video on demand services and sales of Blu-ray discs.

Dennis Maguire, the president of worldwide home media distribution for Paramount said, “2011 showed that home entertainment continues to excite and enthrall consumers. Blu-ray and EST continued to surge, and new delivery systems and devices offer viewers more and more opportunities to enjoy our content, expanding demand even further.” With Netflix making a few questionable choices over the past year that have hurt their standing with consumers and lost them a fair amount of subscribers, this could be the perfect time for the studios to capitalize on their competition’s setbacks by establishing strong a la carte streaming services for the movie-watching public. To that end several studios have banded together to create UltraViolet, a cloud based digital locker service for movie streaming and downloading that works on multiple platforms and allows consumers a good deal of flexibility regarding when and where they watch their films. In a world where mobile phones and tablet computers are king, this sort of focus on new means of distributing movies is going to be vital for the industry’s continued health.

Lionsgate president Steve Beeks said of new media, “We don’t view the home entertainment landscape as an ‘either/or’ proposition between our traditional and digital media partners,” he continued, “We believe, instead, in the continued need to enhance the packaged media experience through incorporation of new technologies—and at the same time capitalize on emerging opportunities to monetize our content through social networks, electronic sell-through and myriad apps that enrich the home entertainment and mobile viewing experience.” We’ve seen this approach pop up in high profile places over the past year with people now able to watch movies through Facebook and on Youtube. Giving consumers the option to view movies through the same mediums where they can talk about them and recommend them is a natural way to develop new media promotion, and sales in the social media world can only be expected to climb from here.

One place where the industry is showing growth that might be surprising however, is in the sale of Blu-ray discs. While not the replacement for DVD sales that the industry hoped it would be back when the format debuted, it seems that Blu-ray is finally making inroads into the mainstream. President of Universal home entertainment Craig Kornblau said, “Blu-ray had a remarkable year, with the format showing significant growth and bolstering overall home entertainment consumer spending for the first time in three years. New releases benefited tremendously, with female-targeted comedies like Bridesmaids hitting the masses and surpassing industry expectations. Catalog also saw impressive gains, as evidenced with the stellar Blu-ray debuts of such huge fan favorites as Scarface, Star Wars and The Big Lebowski. With the number of Blu-ray homes exceeding 30 million and growing—and with more than half of first-week sales of physical products now credited to Blu-ray—the consumer appetite for high-def movies has never been more palpable.”

Blu-ray is one of the only consumer products to continue to show growth over the course of the recent economic meltdown, which puts it in good company alongside titans of industry like the iPhone. How long this sort of growth can continue alongside the development of digital technology is debatable, but as long as the studios get on the ball with building and maintaining flexible, convenient video on demand platforms, it shouldn’t be much of an issue.

How do you feel about the future of the movie industry? Have you been following the masses in spending less times in the theaters and more times watching things at home? And if so, are you still buying your movies on physical discs or have you switched completely to watching things digitally? Is the future safe for makers of big, gaudy films like Michael Bay, or will everything soon be a low budget indie movie that we download directly from the filmmakers onto our mobile devices?

Weaned on the genre films of the 80s. Reared by the independent movement of the 90s. Earned a BA for writing stuff in the 00s. Reviews current releases at

Read More from Nathan Adams
Get Film School Rejects in your email. All the cool kids are doing it:
Previous Article
Next Article
Reject Nation
Leave a comment
Comment Policy: No hate speech allowed. If you must argue, please debate intelligently. Comments containing selected keywords or outbound links will be put into moderation to help prevent spam. Film School Rejects reserves the right to delete comments and ban anyone who doesn't follow the rules. We also reserve the right to modify any curse words in your comments and make you look like an idiot. Thank You!