“(Blu-ray is) the last hardware. … There won’t be any other hardware now. It’s gonna be on a digital phone, it’s gonna be on a computer or TV screen.”
OLIVER STONE, DIRECTOR, 2011
Just as nickelodeons, movie palaces, and drive-ins transformed movie exhibition in earlier times, the introduction of cable television and the videocassette in the 1970s transformed contemporary movie exhibition. Despite advances in movie exhibition, most people prefer the convenience of watching movies at home. In fact, about 30 percent of domestic revenue for Hollywood studios comes from DVD/Blu-ray rentals and sales as well as Internet downloads and streaming, leaving domestic box-office receipts accounting for just 20 percent of total film revenue.
Although the video market became a financial bonanza for the movie industry, Hollywood ironically tried to stall the arrival of the VCR in the 1970s—even filing lawsuits to prohibit customers from copying movies from television. The 1997 introduction of the DVD helped reinvigorate the flat sales of the home video market as people began to acquire new movie collections on DVD. Today, home movie exhibition is again in transition, this time from DVD to Internet video. As DVD sales began to decline, Hollywood endorsed the high-definition format Blu-ray in 2008 to revive sales, but the format hasn’t grown quickly enough to help the video store business.
The biggest chain, Blockbuster, filed for bankruptcy in 2010, closed hundreds of stores, and was auctioned to the DISH Network in 2011, while the Movie Gallery/Hollywood Video chain shuttered all of its stores. The only bright spot in DVD rentals has been at the low end of the market—automated kiosks like Redbox and Blockbuster Express that rent movies for $1.20 to $2.00 a day. Online rental company Netflix became a success by delivering DVDs by mail to its subscribers. But the future of the video rental business is in Internet distribution. Movie fans can also download or stream movies and television shows from services like Netflix, Amazon, Hulu, Google, and the iTunes store to their television sets through devices like Roku, AppleTV, TiVo Premiere, videogame consoles, and Internet-ready TVs. As people invest in wide-screen TVs (including 3-D televisions) and sophisticated sound systems, home entertainment is getting bigger and keeping pace with the movie theater experience. Interestingly, home entertainment is also getting smaller—movies are increasingly available to stream and download on portable devices like tablets, laptop computers, and smartphones.