Slowly everyone notices a shift from physical to digital, meaning more and more people rather download a movie than buying it physically. A Lehman Brothers analyst slashed the sometimes positive forecasts and shows the industry what they will lose.
Years ago we already saw that the music industry made a shift to downloadable content, and now the movie industry seems to be next. Besides this being a threat for the companies' current operations, also formats like Blu-ray, will have trouble surviving with downloads being the real next-gen format. Currently we already notice a decrease in income due to downloads, since physical to digital means that the industry misses out on some of its profit.
"Shifts from physical to digital will disrupt the marginal economics of the TV and movie businesses, just as it did for music," analyst Anthony DiClemente said during a conference call.
DiClemente explains the loss of profit with a simple sum showcasing a 12% decrease. The average profit made from DVDs is $10.59, while when sold on Apple's iTunes the profit is $9.29, meaning 12% less.
