OPINION: WB on VOD
By Paul Sweeting -- Video Business, 8/15/2008
AUG. 15 | ON THE EVE of the Consumer Electronics Show in January, Warner Bros. shocked its long-time technology partner Toshiba by dropping its support for Toshiba’s HD DVD format and embracing Blu-ray Disc exclusively.
Paul Sweeting is editor of Content Agenda
The move was the coup de grace for HD DVD; Toshiba abandoned the format a month later, making Blu-ray the winner of the long-running high-def DVD format war.
In light of subsequent events, however, Warner’s move may not have been such a ringing endorsement of Blu-ray, either.
In both its strategic moves and the public comments of Warner executives, it’s possible to see a studio adjusting to a world in which DVD isn’t quite the center of economic gravity it has been for the past decade and where top-line revenue growth, particularly from the ancillary distribution channels, is no longer a given.
In comments included in a long and interesting profile of Time Warner in last Sunday’s New York Times, to cite one example, Warner Bros. Home Entertainment president Kevin Tsujihara made it clear that the studio’s focus has shifted from managing the in-home movie business for growth to managing it for margin.
“We are facing a marketplace where consumer spending is relatively flat,” Tsujihara told the Times. “Our challenge is in how we go about improving margins in this environment.”
One way to do that, Tsujihara said, is to convert the DVD rental market to video-on-demand, where the studio’s share of the consumer dollar is about twice what it gets from a DVD rental transaction.
Read the full column on ContentAgenda.com.
