The New York Times Magazine examines how the DVD sell-through concept has altered how studios make money, decide which films to greenlight, and plan their marketing campaigns. Why?
From about 2002 on, the larger stakes in Hollywood — the revenue that enables studios to finance blockbusters and to pay Brad Pitt and to keep the lights on — have come to ride mostly on those little silver discs that go on sale four or five months after a theatrical release. This year, for instance, 63 percent of studio feature-film revenues in the United States will come from movies sold to retail stores; actual box office will generate only 21 percent. According to Tom Adams, a well-regarded home-entertainment analyst whose firm, Adams Media Research, tracks DVD sales and trends, studios often get twice as much revenue from a big film’s retail sales as they do from its theatrical release.
Personally, I think the positives outweigh the negatives. It’s a lot harder for a film to get buried these days. However, I love the theatrical experience, and I think we should hang onto that as long as we can. But I suspect that as digital projection takes off, the days of the widespread use of (expensive) celluloid are numbered.