More bad news for the movie biz
CNBC says a key industry analyst is dumping on the industry:
A Lehman Brothers analyst downgraded the entertainment industry Monday and slashed forecasts for its five major companies, saying digital downloads of movies and TV shows posed a huge threat to profits from DVD sales that the companies rely on.
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“Shifts from physical to digital will disrupt the marginal economics of the TV and movie businesses, just as it did for music,” analyst Anthony DiClemente said during a conference call.
DiClemente pointed out a few of the pincers closing in on the industry: the companies make less from a digital download than they do from a DVD; kids are moving away from the collector mentality that fueled some chunk of DVD sales; and DVRs are undercutting the usefulness of TV ads.
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That’s true, 10 years ago I was an avid collector of both CD’s and DVD’s. Today, unless the movie is spectacularly good, I just don’t buy DVD’s. I just haven’t the time to watch moves again and again, partly because there is so much material out there that I haven’t seen and renting is cheap when you use services such as netflix. CD’s have been replaced by digital music from itunes and amazon, and that’s partly because of the reasons mentioned in this blog, the digital downloads are cheaper and I don’t need a CD to remind me what I’ve bought.