Disney got rid of its physical media production, outsourcing it to Sony. With streaming, however, a new threat to the industry emerges.
Disney will outsource its physical media production, mainly DVDs and Blu-Ray, to Sony, sources inside the company revealed. This represents a major development in the physical media industry, a medium largely considered in decline.
Bill Hunt of The Digital Bits reported that Sony will oversee the authoring, production, distribution, and retail sales of Disney’s films. Thanks to its electronics division, Sony likely possesses better resources and competencies than Disney for DVD and Blu-Ray production.
Hollywood majors have been restructuring their physical media space for years. After the COVID-19 pandemic, this process increased in pace.
Universal Pictures and Warner Bros Discovery created a joint venture in 2020 to handle their physical media production and distribution. Netflix, which started as a DVD rental company, halted its signature in-mail DVD sales in 2023.
Many indie production companies handle their own DVD production. So far, Disney has done the same with Disney Movie Club. At its prime, Disney Movie Club was the go-to DVD production company, with genius marketing tactics like the Disney Vault.
According to Hunt, Disney Movie Club subscribers started receiving e-mails about its shutting down. Orders will be received until May 20, 2024. It’s not clear whether Disney Movie Club will also change management or will be dismissed completely.
The end of physical media?
The obvious reason why Disney, Netflix, and other Hollywood majors are dismissing their physical media businesses is the rise of streaming. Disney CEO Bob Iger pledged to focus on making Disney+ profitable in his latest investors call.
Virtually every Hollywood major has its proprietary streaming catalog. Disney also owns the majority of Hulu, a large streaming service available only in the United States and Japan.
However, workers in the film industry and cinephiles started lamenting the end of physical media. With streaming services, studios have the power to remove content from their catalog unilaterally, in some cases making it disappear altogether.
Netflix and Disney+ have removed several films and series from their catalog as they were deemed unsuccessful. Original productions and content with unexpired licenses, however, have nowhere else to go and disappear entirely. A similar phenomenon is not dissimilar to the destruction of negative copies of unsuccessful films in the 1920s and 1930s.
This pushed several film directors, including Oppenheimer’s Cristopher Nolan, to urge viewers to buy the physical copy of their films. It’s highly unlikely that an Oscar-nominated box office hit like Oppenheimer would ever disappear entirely. In fact, streaming services likely already fought to acquire its license.
Nevertheless, the threat is strong enough to create a small resurgence in physical media purchases in the US. Not enough, however, to offset the structural changes happening in the industry.
