Times are Tough

Bearing in mind the current WGA Writer's Strike and the negotiations concerning DVD residuals, here's an interesting article in today's Guardian by David Teather. Here are a couple of extracts::

GMI estimates that DVDs made $8.5bn of profits for the six major studios in 2004. By 2006, those profits had dropped to $6.9bn.

Note that we're talking profit here, not turnover.

It is not immediately apparent where the revenue to replace slipping DVD sales will come from. It seems unlikely that consumers will pay the same amount for a download. Still, Gubbins thinks the current financial state of play will lead the studios to push more quickly into new forms of media. "I think we will see an acceleration into things like video on demand and downloading your own content. They are small at the moment and they have been kept artificially small. No one will risk the existing revenues when they can't yet be sure of new media. But I think that there will be a lot more attention and a lot more of a push to accelerate this new world and to make it happen."

If you ignore the rather dubious timing of the appearance of this article, it seems to me that the door is wide open negotiation-wise for the WGA at the moment. Go guys!