Hollywood Studios Make Cuts in Home Entertainment

Lagging DVD sales hurt employment

Ailing DVD sales are not only bad for bottom lines; they’re also bad for employment. Deadline Hollywood reports Warner Bros. laid off 50 employees from its home entertainment and consumer products divisions. The redundancies amount to just 1 percent of the company’s domestic workforce, but the move represents a larger shift in the industry.

Warner Bros. said it would only execute "limited staff reductions," and other Hollywood Studios are toeing the same line. Lionsgate laid off 10 people in home entertainment and 20th Century Fox laid off 22 employees from its home entertainment and information technology divisions. Paramount Pictures is expected to follow suit. Perhaps the most eyebrow-raising lay offs will come from Disney, which is expected to drop the ax on 250 jobs sometime next week.

The impetus for Disney and the other studios is undoubtedly rapidly declining DVD sales. According to industry trade organization Digital Entertainment Group, the purchase of DVDs, digital movies, and Blu-ray discs fell 18% in the first quarter of this year compared to last year’s figures. It could be argued that the drop has been cushioned by new and proliferating video streaming services. But for now, there is a lag between the revenues made with new forms of digital distribution and the cash brought in by more traditional home entertainment sales.