Umair Haque / Bubblegeneration

Tuesday, May 31, 2005

RIP Media 1.0

In today's WSJ, I find a very nice example of exactly the dynamics I've outlined in my media presentation - the failure of blockbusters, the rise of attention scarcity, and the huge problems this creates for Hollywood's (and the rest of the media industry's) usual price discrimination tactics.

"...After an aggressive campaign to promote and ship "Shrek 2" discs -- emblematic of Mr. Katzenberg's drive to expand the DVD market -- DreamWorks failed to adjust for a sea change that finds new titles burning out much faster than they did at the start of the decade. It stuck to generous forecasts for how the title would perform after its initial release, and assumed that "Shrek 2" would continue selling strongly.

Five years ago, a typical new DVD release would rack up about one-third of its total sales during the first week of release; the figure was even lower for animated movies, which tended to have longer legs. DVD sales would then steadily mount over weeks or months. But these days, DVD releases are generating a huge percentage of their total sales -- typically over 50% and in some cases, up to 70% -- in the first week.

The reason for the change: intense competition for shelf space, as both movie studios and TV producers unleash a flood of new discs every week. DVD sales are now mimicking the big-bang nature of the theatrical business, where movies make most of their money in the first few days before being knocked out by a slew of newcomers."

-- umair // 10:13 AM // 0 comments

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