The market for DVD and Blu-ray discs has been on life support for years, since streaming has become the technology chosen by home video customers.
In the last decade, the US market for physical disks went from a business of more than $ 10 billion in the United States to about a third of that in terms of consumer spending, according to Digital Entertainment Group data.
But the studios are not yet ready to give up the format. Two of the leading studios, Universal Pictures and Warner Bros., have proposed an unusual plan to stay in the business of selling shiny physical disks.
The studies announced on Wednesday a proposal to partner in a joint venture that, if approved by regulators, will be responsible for the North American distribution of DVDs, Blu-rays and 4K UHD discs for new releases, library titles and television programs. The idea is to combine resources to continue selling records and save money.
The joint venture is expected to operate for up to 10 years, according to a press release.
Details are scarce and the company will not launch until early 2021. The studies did not say how many people would work for it or what the new entity would be called, but the movement is expected to match an unspecified number of job cuts in its Existing divisions of home videos.
Industry veteran Eddie Cunningham, president of Universal Pictures Home Entertainment, will oversee the new company.
The idea is a direct response to the collapse of the DVD market. Physical disk sales fell 18% in 2019 alone, generating $ 3.3 billion in revenue in the United States, according to the latest SDR report. Meanwhile, consumer spending on subscription transmission services increased 24% to almost $ 16 billion.
However, physical disks are still important to some consumers, including fans of classic cinema. Not all titles are readily available for transmission. In addition, although the category is shrinking, it remains an important source of revenue for the industry.
The planned joint venture “presents a significant opportunity to continue working with our retail partners to ensure the robustness and sustainability of the format for years to come,” Universal Distribution Director Peter Levinsohn said in a statement.
In addition, Warner Bros. and Universal plan to save costs by dividing international DVD releases by country.
Universal, based in Los Angeles, will handle the distribution of Warner Bros. discs in Germany, Austria, Switzerland and Japan, while Warner Bros., based in Burbank, will handle Universal sales in Britain, Italy, Belgium, the Netherlands and Luxembourg.