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Image Credit: Inside The MagicThe Walt Disney Company will no longer distribute and sell physical media, including Blu-rays and DVDs. Instead, the company is outsourcing this portion of the business to a major film studio.
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Disney to Outsource Physical Media to Sony Pictures Entertainment
According to an exclusive article from Variety, Disney has announced a significant strategic move within its home entertainment division, entrusting a substantial portion of its operations to Sony Pictures Entertainment. Under this arrangement, Sony will assume responsibility for the manufacturing, distributing, and marketing Disney’s DVDs, Blu-ray discs, and other Disney physical media products. This does not include the Disney Plus streaming service, as that is a separate entity. The news comes just after it was announced that the Disney Movie Club was forever shutting down after providing Disney DVD options and other digital bits as physical copy that guests could obtain.
As part of the agreement, Sony will handle the marketing, sales, and distribution of all new releases and catalog titles from Disney in physical media formats across the U.S. and Canada, serving retailers and distributors. Meanwhile, Disney will retain control over its digital media ventures, including premium video-on-demand services.
While the implications for Disney’s workforce remain uncertain, sources familiar with the agreement suggest that the studio will conduct an internal evaluation across all departments supporting physical entertainment during this transition to Sony.
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According to Disney, this licensing model enables the studio to continue offering its films and TV shows through traditional retail channels while adapting more efficiently to consumer demands. This strategic shift aligns with broader company strategies and market trends observed in various industries. Sony Pictures Home Entertainment will cover the physical release of all Disney films moving forward.
The decision comes against a prolonged decline in physical disc sales, exacerbated by the burgeoning streaming landscape. Data from the Digital Entertainment Group indicates a sharp 28% drop in revenue for physical media in the U.S. during the first half of 2023, compared to the previous year, with projections suggesting that 2024 will mark the first year revenue dips below the billion-dollar mark.
In response to these market dynamics, Best Buy ceased in-store and online DVD and Blu-ray sales at the beginning of 2024, following Netflix’s discontinuation of its DVD-by-mail service the previous September.
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The rise of streaming services has fundamentally transformed the entertainment landscape, offering unparalleled convenience, choice, and accessibility to consumers worldwide.
This paradigm shift has disrupted traditional media consumption models, challenging the dominance of cable television and physical media formats.
The streaming revolution has democratized content creation, allowing diverse voices and stories to reach global audiences. It has also sparked intense competition among industry giants like Disney, Amazon, and Apple, each vying for market share with their proprietary platforms. Disney+, Disney’s streaming platform, generated $8.4 billion in revenue in 2023, a 13% increase from 2022.