As you probably know, the original Star Wars trilogy is due out on DVD this fall. After years of holding out, George Lucas finally decided to release the set, after previously indicating he might wait to release Episodes 1-6 together as a complete set, once Episode III was completed. When asked about the sudden change of heart, Lucas responded in true Valenti fashion:
Just because the market has shifted so dramatically. A lot of people are getting very worried about piracy. That has really eaten dramatically into the sales. It really just came down to, there may not be a market when I wanted to bring it out, which was like, three years from now. So rather than just sit by and watch the whole thing fall apart, better to bring it out early and get it over with.
While it’s always asserted by Hollywood (and Manny, the stunt guy) that piracy is the bain of DVD rental/sales existence, Jason Kottke illustrates that piracy may not be eating into the DVD market quite as “dramatically” as Lucas and others would have us believe:
Finding Nemo grossed $320 million from DVD sales in 2003. “Consumers spend more money on the DVD version of almost every movie than they do on that same movie in theaters, including blockbusters such as The Lord of the Rings, Finding Nemo and Pirates of the Caribbean” (USA Today). CNN/Money reports that the movie studios “pocket roughly 80 cents of every dollar on each DVD sold, a take well above the 50 cents for each dollar at the box office” and The Hollywood Reporter says that “studios are earning about 60% more upon initial release from video sales of theatrical feature films than they did during the VHS-only era”. So, not only are video sales up overall, DVDs are more profitable for the media companies than VHS or the box office.
And it isn’t just Kottke, even PriceWaterhouseCoopers agrees:
We project filmed entertainment spending in the United States, EMEA (Europe, Middle East, and Africa), Asia/Pacific, Latin America, and Canada will rise at a 7.5 percent compound annual rate, reaching $108 billion in 2008 from $75.3 billion in 2003. EMEA will be the fastest-growing region, rising by 10.3 percent compounded annually to $36.9 billion in 2008 compared with $22.6 billion in 2003. The U.S. market will expand at a 6.3 percent rate, from $34.3 billion in 2003 to $46.6 billion in 2008.
Maybe Lucas, as he so often does, should release a revised “Special Edition” of that answer.
[from kottke.org]