Disney is transitioning its physical media division, including DVDs and Blu-rays, over to Sony. This aligns with recent industry trends shifting towards a licensing model, indicating Disney’s strategic adaptation to the evolving media environment.
This strategic initiative is echoed by other industry heavyweights like Warner Bros. Discovery and Universal, gradually shifting from physical media to a licensing agreement with Sony Entertainment. This shift mirrors the rapidly evolving nature of the media world, now dominated by digital and streaming content.
One significant industry event was the creation of Studio Distribution Services (SDS) in 2020. Resulting from a joint venture between Universal and Warner Bros; SDS focuses on the production, sales, and distribution of DVDs and Blu-ray disks. Recognizing the potential of digital distribution, SDS also incorporated online streaming into their business model, giving consumers the flexibility to enjoy content as per their convenience.
Despite the rise of digital platforms, SDS still maintains the production and distribution of physical media, catering to a niche audience who still have an affinity for DVDs and Blu-ray discs.
Historically, Disney has always been at the cutting edge of relevant home entertainment technology. This is demonstrated by its swift adoption of VHS and preference for Sony’s Blu-ray over Toshiba’s HD DVD, which ultimately led to Blu-ray’s mid-2000s dominance. Further cementing its prominence in the industry, Disney was also one of the first studios to offer content in 4K Ultra HD.
Disney’s vault strategy, which involved selling select titles on home video for a limited time, exemplifies its innovative approach. This intriguing artificial scarcity amplified demand for Disney Classics. Although replaced by a digital-first distribution strategy today, the Disney Vault has been instrumental in Disney’s successful marketing history.
Current strategic shifts by streaming platforms may instigate an increased demand for physical formats, particularly from consumers desiring ownership of their favorite films and series. Several film directors, including Chris Nolan (director of Oppenheimer), encourage fans to purchase Blu-ray copies of their films.
This could pave the way for a resurgence in demand for physical media, promoting an environment where digital and physical formats coexist, catering to individual viewership preferences. This sentiment underscores the importance of diverse viewing options in a time where unlimited digital access is the norm.
