Mark Ashman/Disney via Getty Images
Disney has reached a licensing agreement with Sony that will see Sony’s home entertainment division handle all Disney releases on DVD and Blu-ray, as well as all physical media production.
This is the latest sign of the decline in physical disk trading. Netflix discontinued its underlying disc-by-mail service last fall, and as industry group Digital Entertainment Group’s 2023 review released this month showed, revenue from disc sales has significantly declined in the streaming era. continues to decline. According to DEG’s preliminary annual report, overall revenue increased 17% due to strong demand for movie titles, but disc sales and rentals fell 25% to just under $1.6 billion.
Both studios declined to comment when contacted by Deadline.
The new structure will operate on a licensing model, according to a source familiar with the deal, which was first reported by the website The Digital Bits. Sony will market, sell and distribute new Disney releases, as well as DVD, Blu-ray and 4K Ultra DVD catalog titles, through retailers and distributors in the United States and Canada.
The changes are part of a larger evaluation of Disney’s strategy to reach consumers and come as Disney faces pressure from some investors to become more cost efficient. Restructuring and headcount reductions in 2023 resulted in at least $7.5 billion in cost savings across the company.
Disney has historically been a strength in home entertainment due to the family nature of its filmography, both animated and live-action. Repeated viewing made even his early large investment in VHS tapes in the 1980s a worthwhile investment for his family, and that behavior carried over into his DVD and Blu-ray days. .
However, in recent years streaming has become the default option for most consumers. As a company, Disney is keen to finally achieve profitability in the coming months with its flagship streaming service, Disney+, which launched in November 2019.
Sony, on the other hand, is not a combatant in the streaming wars that its media peers have been. The company operates niche services like the growing anime outlet Crunchyroll, but without its own integrated entertainment platform, it approaches the studio business differently than its top competitors. ing.
Despite the sector’s decline, movie lovers will continue to support 4K Ultra DVD, which renders movies at the highest resolution available.Last November, a 4K copy of oppenheimer It sold out at major retailers, leaving Universal Pictures scrambling to restock before the holiday season ended.
