During a conference call in New York Thomas Cassey, CFO of Blockbuster, said he expects physical DVDs to be the top seller in the near term. Many analysts suggested that Video on Demand (VoD) and downloads are the future, but according to Home Media Magazine Cassey says that DVDs will continue to fatten the bottom line.
“While we think the digital side of the business is very important, for branding and for the future of the business in terms of how we’re going to make money… it is really more in the physical space,” Casey said to Home Media Magazine.
In 2008 it was easier to find a new movie via Blockbuster since the company managed to get 54% of the movies in stores within the first week after release. Before this was 17%. With physical DVDs speeding into Blockbuster stores, and the still existing popularity of the format, we can understand why Cassey believes DVDs drive business.
DVD’s importance is proven so Blu-ray could be a logical next step. Cassey thinks patience is needed, the format isn’t there yet and only 5% market penetration means that Blu-ray has a long way to go.
“We don’t think it is going to be nearly like DVD replacing VHS, and in this economy people will be slow to change out their libraries,” he said. “It will get better. There are different Blu-ray deals with studios. The wholesale and retail prices are higher. You have to figure out new ways to be fully in stock with Blu-ray.”