DVD Sales Drop: Studios Panic

Because of the drop in DVD sales, studios are looking to ways to stop losing money. Their plan is to block dvd rentals for a month to boost dvd sales. The logic is of course reasonable. Currently upon release consumers can 1)Buy 2)Rent 3)Steal 4)Copy or 5)Borrow dvds. Most people will generally fall under the Buy or Rent category. Thus if the studios removing the Rent option for a month that will lead to less consumer choice and more demand for the Buy category (of course in actuality the demand for Stealing + Copying + Borrow will rise as well, though probably to a lesser degree). This should result in higher DVD sales.

Now I understand the interest in maintaining high profits and the concern the industry has for falling DVD sales, but I don't think that this is their only option. It is a decent option provided they make good on the speculation that they offer lower prices to rental outlets (a month after retail release) - at least that way (ideally) consumers willing to wait a bit longer (you know after it was in theaters first-run and second-run, after its been on pay-per-view, after its been available for purchase, when it finally makes its way to the rental outlets) would be rewarded with a lower cost. In practice of course whether rental companies will lower their rental fees in accordance with their price break remains to be seen. But nevertheless there are definite payoffs to such a plan.

An alternative plan could be to find a way to get their hands in the rental pot: for example charging rental outlets a licensing fee per rent a la TV syndication. Of course verifying rental numbers could be difficult. The benefits for finding a way into that market is that they can still regain profitability but not have to limit consumer choice. I mean, let's face it: a sudden shift in film distribution and exhibition could lead to consumer disillusionment and frustration if the studios don't finesse their way through the change.

At least they're trying to innovate in their own way, and seem to be doing a better job than the music industry. I gotta give 'em that credit!