DVD sales are flagging, so it's no surprise that Disney could soon be offering its movie and TV titles online.
Source: Disney chief considers online subscriptionDisney chief considers online subscription
By Danny King -- Video Business, 03/04/2009
MARCH 4 | Walt Disney Co. is considering launching a subscription-based service for digital delivery of its movies and television shows in an effort to cope with the maturing DVD industry, boost the studio's online presence and stem losses from piracy, according to Walt Disney CEO Robert Iger.
The No. 4 U.S. home entertainment studio is looking “pretty hard” at making much of its film and TV inventory available online for subscribers or so-called “club” members, Iger said yesterday at the Deutsche Bank Securities Media and Telecommunications Conference in Palm Beach, Fla. He added that although profit margins for digital delivery of rented and purchased content are no better than for DVDs, such digital options could boost studio earnings by increasing overall home entertainment revenue while cutting down on piracy.
“When you have the consumer that’s willing to buy packaged goods that are electronic in nature like movies or videogames, … there are some interesting opportunities in the marketplace for subscription and affinity types,” said Iger.
Disney said last month that its studio entertainment unit’s fiscal first-quarter earnings plunged 64% as DVD titles such as WALL-E and The Chronicles of Narnia: Prince Caspian failed to keep pace with year-earlier releases including Pirates of the Caribbean: At World’s End, Ratatouille and High School Musical 2. During the earnings call, Iger appeared to differ from some of the other studio heads by saying that the U.S. decline in DVD spending might be more permanent result of a maturing industry than specifically from the economic downturn that began to take effect during the middle of last year.