Warner Bros has announced that it will withdraw all Harry Potter DVDs and Blu-rays from retailers to follow Disney's limited release model. But will this new strategy work its magic on Potter fans?The answer lies in the changing fortunes of the DVD market. During the 1990s, all of the major Hollywood distributors saw profits from DVD sales rise stratospherically. For some reason, consumers were far more likely to buy DVDs than they had been with video cassettes. What's more, a DVD was much easier to make and distribute than a complicated mechanical cassette, so the profit mark-up was significantly higher. All of this meant that the Hollywood studios experienced an unprecedented period of financial growth during the early 2000s, funded almost entirely by DVD sales.
But in recent years, the DVD bonanza seems to have slowed. Profits have been declining for some time, and new formats such as Blu-Ray have not had the same impact. The industry is also struggling to find new business models in the age of digital downloads and the expansion of film piracy via torrenting websites.
So, DVD is not as big a deal it used to be, which is bad news for studios. The old business model no longer seems viable. Previously, film distributors waited until shortly after a film's theatrical release had ended, and then released DVD retailing at around £15. After the most devoted consumers had bought the product at a high mark up, retailers would generally discount the price sharply to encourage casual sales. Consequently, many films could be picked up for as little as £3. Blu-rays retain their value more successfully, but their market still follows this basic framework.
James Russell is senior lecturer in film studies at De Montfort University. Read the full article here in The Guardian.
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