Paramount and Warner Bros. Making Fools of Themselves

by Paul William Tenny

While Paramount, Warner Brothers, and the other studios refuse to grant writers a four-cent-per-disc increase in DVD residual fees (they currently only get four - they want eight) saying it would cost them too much and that such demands are completely out of the question, the two named companies have hatched a plan to sell DVDs in China at the price of - get this - $3 per disc, to stave off mass street piracy where counterfeit units are going for half that much.

They can't give writers a four cent raise, but they can afford to chop between 80-85% off the asking price to prop up sales overseas. They can't possibly be serious..

Whatever the price, the studios have come to realize that without affordable offerings in China, they won't make any sales, period. Even just selling a few thousand movies at $3 per disc will be better than nothing. Plus, it helps the studios bolster movie sales numbers, which will be equally important to them while DVD sales in the West continue to go flat.

I sympathize with the "war" on piracy because it hurts writers even worse than it does the studios, but this illustrates the disconnect between profit participants better than just about anything else could. Who do you think can afford to lose the benefit of a DVD sale more, a studio raking in $7 billion a year, or a writer getting four cents per sale? Either Paramount and Warner Brothers just showed the world how much profit they make on DVDs, and consequently how much they can afford to share with the people who actually made the content, or they are selling these things are a huge loss.

Either way, what this says is that Paramount and Warner can and will cut into their own massive profits from the sale of DVDs, just as long as it suits their own interests.
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