Consumers changing DVD buying habits / Sales for Pixar, DreamWorks strong but not up to expectations (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/09/05/BUG0REH3G21.DTL&feed=rss.business) -- SFGate, 2005-09-05
The warnings came first. Then the earnings reports. And then the Securities and Exchange Commission investigations.

It's clear that people are buying fewer DVDs from Pixar and DreamWorks. But why?

It's actually not just Pixar and Dreamworks. All the studios are feeling it because people aren't buying as many DVDs as they used it. It's a problem they're having to figure out how to address.

Well, I think a large part was the initial excitement that you could own your own movies, they'd come with lots of extras, and they wouldn't take up much space.

Then the realization that people rarely watch the extras, that don't really rewatch movies all that often, and they still take up space.

The ardor has cooled. I don't think it is having a huge impact since most people don't even know abou it, but the ongoing standards battle for the next generation of DVDs can't be helping (or the increasing improvements in "on demand" movie providing).

and, for someone who still does like to buy movies for my collection (not watch very often, etc.) I now wait until the films go down in price. I have noticed that at least at Costco DVDs used to be 14.99, then went to 17.99 and now up to 19.98 for new releases. It adds up - and like all things in our consumer society it can't last - so the $10.00 bin is where I look now..

I think it's so surprising to me that the media companies, and companies/Wall Street in general, don't look at it more historically - as it related to trend buying and "hippness" or "hot". It seems time and again over the last 10 years we have seen large surges in certain entertainment areas - and then when it slows down the reports of downed expectations and lack of performance is mind-boggling. It can't go on forever people! We're not numbers on a spreadsheet.

More sales teams and CFOs should tap human factors or psychology/relations folks on their staffs to better understand long term choices by folks.

Declining quality of content in Hollywood, buying trends, and it's hard to justify the full retail price when you can rent for a couple dollars. If they're not already, I'm sure they'll try to blame piracy, like the music industry does.

I don't know if this has anything to do with it or not, but we have a rule in our house: we don't buy a DVD unless we have seen the movie and have liked it. That cuts our DVD sales down quite a bit.

And, if it is a movie we kind of like, I won't pay full price for it either. I will get it second hand from Amazon, wait for the sale bin, or get the previously viewed DVDs at the video store. And/or I will go to a discount megastore and get it cheaper than the competitors have it.

I know, I am a cheapskate, but I love bargains!

Oh, and this does not effect my Pixar buying in the least. We buy every one of those on the first day it is released! ;)

The studios have a legitimate fear of piracy. With the continuing rise of high speed connections, and pirate sites offering movies for free, there is no way a studio can price their products low enough to compete with free.

I think the overall downturn through isn't coming exclusively from piracy though. What the execs don't get is that for the average person, movies are not a necessary expense. With soaring energy and gas prices causing everything to cost more, yet wages staying flat, the first thing to go in most budgets is entertainment expenses. An awesome DVD collection isn't really that important compared to buying food. But for an exec who works for the studio who pulls down 6 figures, they just will not understand why the average people (and it's not like corporations are handing out monthly raises to match the cost of living increases) are no longer able to afford as many 20 buck DVD's and 10 to 11 buck movie ticket prices.