Hollywood's DVD Problem: Not Going Away

Assuming that the rest of Hollywood falls in line with Warner Bros. and Sony’s Blu-ray camp, the movie studios will have a fighting chance to replace their old DVD revenue with next gen DVD revenue. But it won’t happen for several years, notes Rich “Nostradamus” Greenfield. Rich predicts (reg required) that DVD sales will slump another 3% in 2008.

After that? In part that’s dependent on how quickly Universal and Paramount come aboard. Universal isn’t locked into any arrangement with the HD DVD camp, but Viacom’s (VIAB) Pararmount and Dreamworks may be, Rich notes:

Do Paramount/Dreamworks/Dreamworks Animation have exit clauses from their HD DVD exclusive contracts, if all other studios embrace Blu-ray? If not, all are stuck in the wrong next-gen DVD format thru 2008. In addition, if they drop HD DVD exclusivity, do they have to give up some of the “blood” money they took from Toshiba in 2007?

Separately, consumers still need to 1) upgrade their old sets to HiDef ones, which is happening at the high end of the market but still isn’t a mainstream behaviour and 2) become convinced that they need new DVD players. The latter isn’t a given, because for many folks, conventional DVDs viewed on nice HiDef screens looks pretty good already. And if that’s the case, then they’re not likely to be in a hurry for a new machine, format war or no.

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