Post by Hey Man on Sept 28, 2011 14:38:21 GMT -5
Studio walls are tumbling down.
Paramount’s decision to merge its home entertainment, licensing and digital operations -- coming on the heels of Disney's consolidation of its DVD and tsotchke arms -- reflects the new Hollywood math.
With DVD sales on the decline and video streaming on the rise, there is less need for distinct studio fiefdoms to handle the same entertainment properties across ancillary markets.
In today's increasingly digital world, segregated divisions have become redundant -- and increase the odds that divisions will operate at cross purposes with each other.
“Everybody is trying to get by on less head count because revenues are shrinking, so it makes sense to shrink layers and get everything flatter, so there’s not as much replication of functions in dramatically separate divisions,” Tom Adams, principal analyst and director of U.S. media for IHS Screen Digest, told TheWrap.
Paramount is shifting its DVD, digital and television licensing operations under a new umbrella division, christened Home Media Distribution, to be overseen by division president Dennis Maguire (left), a longtime home entertainment executive. The studio also centralized its global theatrical management oversight in Los Angeles.
“Like every other industry, we have to pay close attention to how the world is changing and how the internet is changing how consumers buy our product,” a Paramount insider told TheWrap.
“DVD is not what we thought it would be, but video streaming and digital distribution are becoming much more popular, so the change that we knew would be here, is here now. It’s not coming five years from now,” the insider added.
Earlier this month, Disney consolided its lucrative toys arm with home entertainment into a single division to be run by Robert Chapek (right) so that one team will interact with Wal-Mart and other big retailers on studio DVDs, plush toys and games.
The consolidation is unlikely to stop with those two studios. On Tuesday after Paramount's announcement, a rival studio executive told TheWrap that every company in town is working to more tightly align their various divisions.
The executive predicted there would be announcements of similar changes at other major studios over the coming months.
“My guess is that there’s no president in town not having conversations about it today,” the executive told TheWrap.
For one thing, the barriers that once existed between digital and physical distribution are eroding.
Take UltraViolet, the studio’s new cloud-based initiative, which Hollywood hopes will prop up the fading DVD market by allowing consumers to more easily access their films on multiple platforms. Instead of simply buying a Blu-ray, consumers will be able to store the films they own in a digital rights locker and burn them to a disc or stream them on their PCs, game consoles, and smart phones.
Paramount’s decision to merge its home entertainment, licensing and digital operations -- coming on the heels of Disney's consolidation of its DVD and tsotchke arms -- reflects the new Hollywood math.
With DVD sales on the decline and video streaming on the rise, there is less need for distinct studio fiefdoms to handle the same entertainment properties across ancillary markets.
In today's increasingly digital world, segregated divisions have become redundant -- and increase the odds that divisions will operate at cross purposes with each other.
“Everybody is trying to get by on less head count because revenues are shrinking, so it makes sense to shrink layers and get everything flatter, so there’s not as much replication of functions in dramatically separate divisions,” Tom Adams, principal analyst and director of U.S. media for IHS Screen Digest, told TheWrap.
Paramount is shifting its DVD, digital and television licensing operations under a new umbrella division, christened Home Media Distribution, to be overseen by division president Dennis Maguire (left), a longtime home entertainment executive. The studio also centralized its global theatrical management oversight in Los Angeles.
“Like every other industry, we have to pay close attention to how the world is changing and how the internet is changing how consumers buy our product,” a Paramount insider told TheWrap.
“DVD is not what we thought it would be, but video streaming and digital distribution are becoming much more popular, so the change that we knew would be here, is here now. It’s not coming five years from now,” the insider added.
Earlier this month, Disney consolided its lucrative toys arm with home entertainment into a single division to be run by Robert Chapek (right) so that one team will interact with Wal-Mart and other big retailers on studio DVDs, plush toys and games.
The consolidation is unlikely to stop with those two studios. On Tuesday after Paramount's announcement, a rival studio executive told TheWrap that every company in town is working to more tightly align their various divisions.
The executive predicted there would be announcements of similar changes at other major studios over the coming months.
“My guess is that there’s no president in town not having conversations about it today,” the executive told TheWrap.
For one thing, the barriers that once existed between digital and physical distribution are eroding.
Take UltraViolet, the studio’s new cloud-based initiative, which Hollywood hopes will prop up the fading DVD market by allowing consumers to more easily access their films on multiple platforms. Instead of simply buying a Blu-ray, consumers will be able to store the films they own in a digital rights locker and burn them to a disc or stream them on their PCs, game consoles, and smart phones.