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Selling DVDs is a tough business. Just ask movie studio execs, who have watched as digital downloads and cheap rentals have cut into what was once a far more lucrative business. DVD sales started declining years ago and the pace of the decline isn't slowing. In the first half of the year, sales fell more than 13%.
So what's a studio exec to do? Right now, some seem willing to do whatever it takes to beat back the rise of rentals. But perhaps they should instead be having lunch on a regular basis with Jeff Bezos as a new Amazon.com promotion might be worth a look as a new business model.
Amazon's Disc+ On Demand promotion is simple: buy select movies on DVD or Blu-ray and get a free gift -- the ability to watch the movie you just purchased via Amazon's Video On Demand service. Currently, NewTeeVee reports that there are only approximately 300 movies for which this promotion is available, and it's a limited-time offer. But as NewTeeVee points out, this promotion "may well be the start to the industry’s first major multi-platform retail experience".
Could such an experience rescue DVD sales? While it's far too early to say, I think it's worth some further experimentation. As we've seen with click-and-collect, many consumers prefer the internet shopping experience, but also like the convenience and relative instantaneousness of being able to pick up in person what they just bought online. Having the ability to purchase a physical DVD with immediate access to a digital version online seems like it might offer some of the same advantages.
Already, the number of digital copy activations on Blu-ray discs hints that flexibility is important to consumers. Which isn't really a surprise. As Rupert Murdoch himself noted in his Wall Street Journal op-ed, consumers are using a variety of different technologies and don't want to be "chained" to a particular "box". I suspect this is true no matter what type of content we're talking about -- from music and movies to magazines and books. After all, the content in physical form (and at a physical price) would be far more appealing if it came bundled with some level of digital access.
It's all about value. When you get right to the heart of it, DVD sales have fallen because more and more consumers don't see the value in buying a DVD. But if movie studio execs can find a way to boost the perceived value of DVDs, that can be changed. Which is precisely why movie studio execs would be wise to look at Amazon's Disc+ On Demand promotion and ask themselves a simple question: "Why does something like this have to be just a promotion?"