Ail said:
Not only that but this last year or so the profit they make per DVD copy sold has slowly diminished as DVD prices slowly went down and I doubt they like that fact...( DVD market total revenue isn't growing anymore). |
Years ago, when the RIAA was suing Napster, I remember reading a pretty indepth analysis of record company profits which argued that it wasn't piracy that was cutting into music profits.
The argument was (essentially) that every time the music industry created a new format people replaced their existing copy of an album for the same version of the album in the new format. As the format of choice switched from CD to MP3 people had no need to buy a new album because they could simply convert a CD to a collection of MP3s. This resulted in fewer old album sales, which were generally very high margin (because the production and marketing costs were far smaller), and noticeably smaller profits and hurt labels' bottom lines ... The analysis was fairly effective in demonstrating that new music sales had not been impacted, and the decline in sales was focused around older albums.
With that in mind, I think that companies (in particular Disney) require the high margin sales of older movies that are released to a new format to maintain their profit margins and will do anything within their power to force people to upgrade.
