Those museum staff who came to my presentations earlier this year on Web 2.0 would remember that I talked a bit about the idea of ‘channel fragmentation’ in relation to traditional media. I used the example of cinema releases, DVD sales, cable TV licenses, traditional TV licenses, as well as competition from Copyright infringing distributions (P2P, DVDRs, pirate copies etc).
Here is another great example of channel fragmentation – ‘Giveaways killing DVD cash cow’ – from The Australian that has nothing to do with Copyright infringement.
British newspapers are now giving away free as many DVDs as are being purchased in stores, revealing a silent factor contributing to the decline of Hollywood’s cash cow format.
The cover-mounted DVD giveaways, which have included Prizzi’s Honour and Donnie Darko, devalue the format in the eyes of consumers, one-quarter of whom said they would have bought the same title if they had seen it in shops for a reasonable price, according to a report released on Thursday.
Although most of the major Hollywood studios oppose the newspaper giveaways, the smaller local distributors who have licensed the films are opportunistically doing deals with publishers for short-term gains that can generate as much as £250,000 for a film.
“The argument in favor of this is that the majority of these films have reached the end of their commercial cycle,” Ms Jayalath said. “In many cases, they’re no longer stocked because traditional retailers have a limited amount of space. For the rights holder, it can be the last bite of the cherry.”