Tess Vigeland interviews entertainment writer Claude Brodesser Akner in this segment from Friday on how DVDs stopped being a cash cow for Hollywood.
She does the things NPR does right on its Marketplace business show - cover a big business strategic issue and make it understandable in a short period of time, getting this quote from Akner that sums up the current economics of the business.
Yes, in fact, not only are people not buying DVDs, because they're renting them, thanks to RedBox, but there's also a change in psychology that's happening here, which is that once people get used to paying a $1 for a movie, it's very hard to get them to pay anything else for one.
Vigeland also falls victim to an NPR weakness, which is to address all changes from the perspective of those who are hurt by change, as we saw last week in a segment on how price wars hurt small retailers.
So now we have not only the death of the DVD, but we also no longer have high profits on what is the very latest technology, which is Blu-ray. So how is Hollywood going to make any money?
AKNER: The problem with your question is that there's not really a good answer.
Actually, we're already seeing the answer. Top Hollywood talent is having its salaries cut, the studios are reworking costs and ownership agreements, the number of writers on each television show is down, etc. When Blu-Ray was introduced, there were articles about the greedy studios trying to get fans to buy the same content in different formats for a third or fourth time. Now that consumers are driving, we're supposed to feel sorry for the studios? I don't get it.
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