The Decline of DVD Sales

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DVD sales have declined causing a current problem for Sony Corporations subsidiary Sony Pictures Entertainment. Sony Pictures Entertainment Inc. has seen a severe decline in revenue in the past recent months. DVD sales have declined to a level of severe concern, and as such left financial analysts and specialists in the industry deeply worried. We have taken to the field and conducted a number of interviews to decipher the basis of the rationale behind lack of DVD sales. Through the course of the following entailed research and our detailed interview analysis’s, we hypothesis that the drop in sales is due to a number of interrelated reasons including the current economic state and an advance in technologies giving consumers many alternative options to the DVD.

Literature Review

In the past, Production companies could predict how well a film would sell on DVD by how well it performed at the box office. This is no longer the case as box office hits such as “Indiana Jones and the kingdom of the crystal skull” and “Hancock” sold far below the expected amount of DVDs. This is a relevant problem due to DVDs being a big center of revenue for Sony Pictures Entertainment. Chairman and CEO Michael Lynton stated the following about the DVD market decreases, “it isn’t just contracting, and it’s becoming more volatile and unpredictable than it used to be”. Consumers are not only buying fewer DVDs but have also developed a new quality consciousness that is unforgiving. (Goldstein, 2009)

Unlike its competitors, Sony Pictures Entertainment gave in to Red Box in the first round and signed a contract to provide DVDs for rental on the same day they are released for sale. This was a potentially harmful decision considering the other producers ...

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... some insight into he decline in DVD sales. Most attribute their neglect to purchase DVDs to some aspect of price. We’ve heard that DVDs are too expensive and our interviewees mentioned the cheap Red box’s rentals. Quality has also been mentioned, as far as poor quality online streaming and even the quality of the production itself. This quality consciousness discussed in Goldstein’s article in the Los Angeles Times is apparent in the mind of our interviewees. Netflix, Red Box, and Online streaming have all been implicated as a replacement to the DVD by our interviewees. Technology certainly affects the decision making process of these motion picture consumers. These Interviews have validated our suspicions as well as the above literary assumptions that the decline in DVD sales is due to both the negative change in the economy and the advancements of technologies.
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