Sales of digital movies surge as movie studios smarten up on online sales

“After years of trying to convince consumers to buy movies online, Hollywood found a solution in 2013: Make it the only option,” Ben Fritz reports for The Wall Street Journal. “Digital movie purchases surged 47% last year to $1.19 billion, according to data released by Digital Entertainment Group, an industry trade group. It was the fastest-growing category as total home-entertainment revenue inched up 0.7% to $18.22 billion.”

“Digital growth just barely made up for ongoing declines in sales and rentals of physical discs. The total U.S. home-entertainment market remains well below its peak of more than $22 billion 2004, a drop that has squeezed the profits of every studio and led to widespread cost cutting,” Fritz reports. “Still, strides in digital-movie sales are encouraging to studios. And a primary reason for the accelerating growth in online sales is the widespread adoption of a new release window marketed as ‘Digital HD.’ For one to four weeks before a movie becomes available on DVD or to rent online, studios make new movies available to purchase from digital stores like Apple Inc.’s iTunes Store and Amazon.com Inc. in high definition.”

“Although some people are now buying movies online who might otherwise have bought a DVD or Blu-ray disc, studio executives said the biggest change is people who would have rented a movie but now, unwilling to wait, are buying it instead,” Fritz reports. “Sony was the first company to offer a movie for sale online before the DVD, with the comedy ‘Bad Teacher’ in 2011. But the experimental practice became widely accepted only last year, as studios also all adopted the “Digital HD” branding first pushed by Fox.”

Read more in the full article here.

30 Comments

  1. I never buy any audio or visual media new, you know that in a few months you’ll be able to get it for less, and if you no longer want it then it probably wasn’t worth having in the first place.

      1. I buy more and more stuff off Amazon. More often than not if you buy a cd, you get an mp3 copy as well (not that it’s hard to rip a cd) and for some reason the cd (and mp3) version is cheaper than the mp3 only version. This then imports straight into iTunes and can be added to iTunes Match. The last dozen or so cd’s I’ve bought haven’t even been opened. Ultimately, the difference in convenience is minimal, and sometimes the price differences are (inconsistently) large, so I mix and match.

  2. I’ll buy music, and I do, but I won’t buy Movies or TV Shows. As such I rarely watch any TV from iTunes as all Apple’s allowed to do is sell TV shows.

    I’d pay $1 an episode to watch/rent a show one time but fsck if I’ll ever pay $3-4 to “own” a 22-44 min TV show.

    1. “Redbox it”, rip it, own it for a buck.

      I wish I didn’t have to do that but until they drop the price on iTunes (where the the studio’s dictate the price), that’s what I have to do.

        1. Wow, you figured out he was an Obama malcontent from that little bit of info? That’s pretty amazing Sherlock! But since you ALSO voted for Obama in the last election, cheated on your 2009 taxes, and then filed your 2011 tax return 2 months late, aren’t you being a hypocrite here? –and please, trade in your 1997 Blue Honda Civic, it’s blowing smoke!

      1. As someone who makes his living from film production I think I find your “I wish I didn’t have to steal, but that’s what I have to do” rather hollow.
        It’s not food, clothing or shelter… it’s entertainment. And no doubt you could afford it, it’s just cheaper to steal it. Your justification and lack of shame at having stolen someone else’s hard work is just appalling.

        I too feel the discrepancy between Redbox and what the cable & satellite force the online rental prices up to is outrageous. However, (and this is a big however) you -rented- (a single day’s viewing) it from red box you have absolutely no moral ground whatsoever for stealing a copy to keep.

    2. What a bunch of fucking lies. The rental rates are exactly what they used to be back in the Blockbuster days. Only NOW you don’t have to drive there twice, once to rent it and once to return it. The quality is HD. I don’t need no shitty DVD/blu ray either. Remember when you had to buy one every year after they added some small bogus feature? They also download new firmware (through newer DVDs) to your older players to make them display slightly worse picture in order to get you to buy the newer players. You don’t know that but they do.

      There is nothing wrong with iTunes, and most of what you complain about is nothing but lies.

        1. The rates are set by the producers of the material just as in the App Store. The stupid TV show prices are not apples doing. Apple merely gets 30%. The stupid studios are to blame for the prices.
          Your reasons for “shitcanning” the person in charge of it actually the studios/owners of the movies. Apple wanted to sell TV shows for 99c. Guess what? They were overruled.

          Here’s what the owners do….first they look at the distributor and then they decide the price. If the distributor (eg Apple) has customers that are willing to “pay” (as opposed to droid customers) they set a higher price for movies. If the distributor is distributing to a demographic that is known for penny pinching (droids) they set the prices lower. Either way they try to milk as much as they can. What they can milk is entirely their call, NOT Apples.

          1. Paul,
            It isn’t the production companies or the studios, it’s the cable and satellite companies. (Comcast, Verizon, directTV DishNetwork etc) They make the ultimatums that restrict the online rentals (amazon, iTunes etc) to outrageous pricing.
            And because they have been able to strangle online rentals to a trickle they maintain control the overwhelming bulk of non physical distribution (and therefore the $$$).
            Which unfortunately becomes kind of a chicken and egg thing, and as they say in New Hampshire, “you can’t get there from here”

  3. I gladly buy movies instead of renting them. The cost of an iTunes movie is less than the cost of going to the movies, you do not get ripped off on concessions and do not have to put up with the cellphone users.

    Next, smaller films rarely see the light of day outside of a handful of cities on the East & Left coasts.

  4. “Make it the only option”. <–Misleading and incoherent. That's not what's going on. It's a change in timing of releases, taking advantage of those wanting to watch new movies ASAP via their computerized systems.

    It's a good move. But hard copy media is NOT going away. The benefits of hard copy media are ENORMOUS. including storage, special features, quality vs bandwidth, sharing, reselling, special versions, etc.

    My POV:
    More trivial art is great for digital download. Watch it once and trash it. But I get masterpieces as hard copies to keep in my library. For example:

    'Supernatural': A fun TV show for watching once, downloaded or watched online.

    'Fringe': A masterpiece of television production and writing, I own the set of discs for posterity.

    Same goes for movies.

  5. The split of the dates between DVD release and rental release has already led me to cancel my Lovefilm subscription.

    If the film is something I’m going to watch more than once or twice ( like Lord of the Rings etc.) then I buy it – for quality as well as repeat viewings.

    If it’s not a spectacular I’d pay a couple of bucks to see it once. Not a whole lot more.

    If it’s a TV series – I will wait for the box set because if it’s any good I will have recorded it using eye Tv or a PVR.

  6. Digital editions don’t have sales. Many great deals in the racks of unsold dvd’s and Blu-Ray discs. Buy and rip/backup or get with a digital copy. As others have noted… I’ve never understood the premium price for digital content (music and movies). No packaging costs, no up front production costs, and very fixed distribution costs. This should all lead to lower retail prices.

    1. Agreed. Physical disc distribution using the postal svc cost only a couple of dollars per film. So, take the manpower and postal costs out of the business and charge the same price must equate to higher margins.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.