Entertainment Industry Strategist David L. White Says Movie Studios Are Falling Further Behind Home Entertainment Paradigm Shift
(1888PressRelease) Leading entertainment industry strategist David L. White analyzes current entertainment distribution models and offers insight into changing consumer landscape.
Los Angeles - David L. White, former Miramax executive and a leading strategic consultant for the home entertainment and other industries, says movie studios and other entertainment producers are not changing their distribution model as quickly as consumers are moving from disc libraries to digital access and cloud storage of video content.
"Having worked and consulted in the home entertainment industry for Miramax, one of the world's most iconic brands and recognized names in film, I saw firsthand the tug of war taking place between the studios and consumers," said White. "The studios want to maintain their physical media model, although DVD and Blu-ray sales continue to decline, which has forced price decreases. Consumers' unquenchable thirst for content and an enhanced user experience is a countertrend, which studios, in my opinion, are not sufficiently addressing to protect their long-term revenues."
White added that he understands why the industry as a whole may not seem overly concerned, since distribution via physical media is only declining at a 7-percent rate and digital distribution only represents 10 percent of sales. He expects the entertainment industry to squeeze every last bit of revenue from home video disc sales, but this is short-term thinking, and could lead to major industry casualties and consolidation.
"The major studios have waited much too long to understand this shift in consumers' home entertainment preferences, and to develop plans to mitigate its impact," said White. "I am convinced that the convergence of those consumers who were early adopters of digital-based video content and the much larger market of mid-adopters will happen by early 2014."
"Then, the decline of the physical media market will be sudden and steep, much the same as what has occurred with CDs in the music market. I predict that as physical media sales drop dramatically, it will be replaced with lower-priced video-on-demand (VOD) and subscription-based viewing (SVOD). If there was any question as to the legitimacy and inevitability of this trend, then it was quickly answered when major players, such as Apple, Amazon, Netflix and Wal-Mart, entered the competition."
"As with CDs, consumers have changed their 'emblem of ownership' of visual content. Once there was a sense of pride in displaying a large case of DVDs (CDs, videotapes, vinyl record albums) in the entertainment area of the home. Today, consumers would rather show family and friends how easily content can be accessed and viewed on their TV with the simple push of a button, be it vacation photos and videos, gaming or the Internet."
According to NPD Display Search, a market research company, the sales of Internet-connected TVs in North America will increase from 9 million for 2011 to 24.7 million by 2014. DisplaySearch research predicts 18 million Internet-connected TVs will be shipped North America during 2012, with 38 million by 2015. The global total for 2015 is expected to reach more than a half billion.
"I was a member of the executive team Mike Lang, (former) Miramax CEO, assembled to develop a strategy to monetize the Miramax film library that Filmyard Holdings purchased from Disney during December 2010," White said. "Once these deals were completed and the plans implemented, Miramax's priorities shifted to simply monitoring the efforts of our partners; Lionsgate and Echo Bridge Entertainment. I know we were incredibly successful and that these distribution partners will continue the momentum."
"Our goal was to negotiate new distribution deals in physical and digital channels, knowing that the challenge is different for major studios and libraries. Major studios have new releases or additional libraries to distribute; however, whether it is a studio or a robust film library, they need to reinforce larger strategies with aggressive digital plans vital to either's success.
"The studios are likely to feel the most pain in this tug of war with consumers," concluded White. "To whatever degree they succeed will be tied to digital planning and comprehensive approaches that mitigate channel conflict. The studios must take into account that Apple owns the vast majority of the digital space, so they can still succeed with partners, such as Vudu and Cinema Now that are key players, given their ties to brick-and-mortar space. After all, consumers always win; they drive the market. Consumers will continue to demand lower-priced video content and greater accessibility. As a strategic consultant, my advice to studios is to become more efficient and quickly shift their focus from traditional distribution models to the digital model."
About David L. White and Centric Industries, Inc.:
During a professional career of more than 20 years, David L. White has become a highly versatile (and sought-after) consumer products strategist. After many years with Belkin International, Actuant, Rainbird and The Flecto Co., he founded Centric Industries, Inc. during 2009. It has developed value-added partnerships with a number of retailers, manufacturers and investment firms. This value is primarily derived from the development of consumer products and placement, but also includes strategic development for its partners.
August 7, 2012
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