December 31, 2024
As 2024 draws to a close, Media Play News is once again taking a look at the headlines that rocked the home entertainment world, both in streaming and in the traditional transactional side of the business. Today’s installment lists the top 10 stories in transactional home entertainment, both digital and disc; the previous day’s installment, on the top 10 stories in streaming, may be accessed here.
Stories were selected by the Media Play News editorial staff and are presented countdown style.
In what many saw as a vote of no confidence in the declining disc business, The Walt Disney Co. in February revealed it is carving off a chunk of its home entertainment business to Sony Pictures Entertainment, licensing its films to Sony for the manufacture, distribution and marketing of DVDs, Blu-ray Discs, and 4K Ultra HD Blu-rays. The deal includes both new releases and catalog titles, with Sony taking over sales and distribution through retailers and distributors throughout the North American market.
Best Buy made good on its October 2023 promise to phase out discs from its more than 1,000 stores in the United States and Canada, as well as its e-commerce website. By the end of 2024 DVDs, Blu-ray Discs, 4K Ultra HD Blu-ray Discs and even the Steelbooks the chain was once known for were gone from all the retail stores inspected by Media Play News staffers, and also wiped from the Best Buy website. Observers still question the wisdom of the wholesale dump, citing the company’s November financials, in which Best Buy reported a 19% decline in third-quarter same-store entertainment sales, compared with a near 21% increase in the previous-year period.
The disc sales business received a boost in 2024 when Barnes & Noble, the big national bookstore chain, said it is effectively doubling down on a business other large retailers, most notably Best Buy, have abandoned. The chain of more than 620 stores in February announced it is rolling out branded Disney sections in most of its stores, with a greater assortment of the studio’s titles. In addition, the chain began bringing in more catalog titles overall and is expanding its 4K Ultra HD and Steelbook inventories.. “Just like with vinyl and CD, customers are returning to physical products,” senior manager for music and video Crissi Bariatti told Media Play News in June. “Fans want to own their favorite movies or TV series and share their ‘hauls’ online and with their friends.”
In another positive development for the disc business, Allied Vaughn in early 2024 unveiled what it calls an “Intelligent E-Commerce” solution that provides content distributors — from major studios to tiny independents – with DVD, Blu-ray and UHD licensing, asset preparation, manufacturing, distribution, and marketing under one roof. The solution is based on real-time manufacturing, with a 24-hour ship window — which integrates supply chain and sales channel management into one process and eliminates both the pesky returns problem and the need for huge amounts of warehouse space. “AV’s licensing model was set up from the start to be an extension of the studio offering,” company president Doug Olzenak told Media Play News in May. “We release all titles under the studio name, not our own brand. With packaged media maturing as a format, studios direct their resources to growing digital formats. AV steps in and performs all the functions needed to release a packaged media version of a title, using as few studio resources as possible. Released titles conform to the studio’s branding and effectively remain in the studio’s catalog forever.”
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One of the biggest players on the transactional home entertainment front, Paramount Home Entertainment, saw both its longtime president, Bob Buchi, and sales and distribution chief Craig White leave the company in July. As its new head of home entertainment, Paramount tapped digital whiz Andres Alvarez, who previously served as SVP of digital distribution at Amazon MGM Studios. Alvarez came to his new position with impressive digital creds: Prior to his four-year stint at the helm of digital distribution at Amazon MGM Studios, Alvarez spent four years as SVP of global accounts and domestic licensing at 20th Century Fox, where he managed the studio’s global film and TV electronic sellthrough and VOD business with key digital accounts.
The beleaguered DVD and Blu-ray Disc rental business took a big hit mid-year when Chicken Soup for the Soul, owner of some 30,000 Redbox rental kiosks, went belly up. The company had been in financial trouble for some time, to the point where it had been unable to restock its disc rental vending machines with new product (in many, the most recent hit movie was Barbie). The end came in late June, when Chicken Soup filed for Chapter 11 bankruptcy, which a U.S Bankruptcy Court judge two weeks later converted to Chapter 7, requiring a wholesale liquidation. Since then, the bright-red kiosks, which for years had dominated the dwindling video rental business, have become a big headache for mass merchants, supermarkets and drugstores as they grapple over what to do with the abandoned machines – a problem compounded by reports that many of the kiosks store customer data on internal drives that could pose security and legal issues.
Studio Distribution Services (SDS), the joint venture that distributes discs for Universal Pictures Home Entertainment and Warner Bros. Discovery Home Entertainment, significantly expanded its scope in 2024 as part of its efforts to streamline and thus boost the profitability of the disc business. In May, SDS announced it has established two new direct retail relationships with major retailers Fred Meyer and GameStop. Under the deal, SDS brings select 4K Ultra HD, Blu-ray Disc and DVD titles to all 132 Fred Meyer grocery stores and 170 GameStop stores, as well as the GameStop.com e-commerce site. The relationship with Fred Meyer kicked off with the May 14 release of Dune: Part Two and later expanded to include standing retail floor stand fixtures. GameStop introduceed a dedicated video wall space with 20 title facings in 170 stores nationwide, and also expanded its online disc inventory on GameStop.com. Then, in June, SDS signed an agreement to distribute the hit TV series “The Chosen” on Blu-ray Disc and DVD to Walmart stores and other select retailers throughout the United States and Canada. The distribution marked the first time SDS released content outside of the film labels involved in its JV. SDS president Eddie Cunningham remarked, “SDS is thrilled to continue to champion the physical media industry and we are confident that our loyal consumers will be delighted by the opportunity to discover new release films at additional and convenient locations around the country.”
While DEG numbers show a continued double-digit decline in disc sales to consumers, SDS president Eddie Cunningham in June told Media Play News he’s sensing a turnaround. “We remain incredibly excited about the longevity of the business,” Cunningham says. “Both Walmart and Amazon are hugely leaning into the category and seeing even more areas of opportunity…. Despite the increasing, and competing, pressures for consumers’ eyeballs with the proliferation of SVOD options, the advent of premium VOD and the general move toward digital consumption, the physical market trajectory is improving considerably, with year-over-year declines softening to around only 5% over the past three months. Dedicated consumers are extremely aware of the many benefits of owning physical content and remain highly committed to the category. The business is solid and still has a very long runway.”
The TVOD market for both the digital sale and rental of movies experienced modest growth in 2024 — at least in relation to these films’ box office earnings. Consumer spending on digital rentals of new theatrical films grew 5.2% in the first nine months of the year, while total spending on digital transactions (rental as well as purchase) was down about 8% year-to-date, according to DEG: the digital entertainment Group. But when you consider the box office earnings of films released digitally in that period was down more than 20%, TVOD actually did quite well, DEG maintains, noting in its latest report, did quite well in the first three quarters of this year, DEG maintains, noting that “theatrical new releases are historically a key driver of home entertainment spending, and softness in this area contributed to declines in EST.”
What we consider the single biggest story on the traditional, transactional home entertainment front is the growing strength of the PVOD business. The transactional video-on-demand (TVOD) sector is relying more and more on early digital releases being made available for home viewing at a premium price — a trend we first saw in 2023 with the return of the windows strategy that had been waylaid by the pandemic. Universal Pictures Home Entertainment, which typically releases theatrical films into retail channels faster than other studios, did so well in 2024 with such blockbusters as Despicable Me 4, Kung Fu Panda 4, and Twisters that Comcast president Michael Cavanaugh in September gave the division a shout-out at a tech conference in San Francisco, noting “[the movies] did really well in the PVOD window.” Accordingly, UPHE released Wicked for digital purchase and rental, at a premium price, on Dec. 31, just 39 days after its theatrical debut. Other studios that relied heavily on PVOD in 2024 include Paramount (Gladiator II), WBD (Wonka) and Lionsgate (Saw X).
