Disney has reached an agreement with Sony Pictures Entertainment to entrust a significant portion of its home entertainment division. Under this arrangement, Sony will handle the manufacturing, distribution, and marketing of Disney’s DVDs, Blu-ray discs, and other physical media products.
As part of this collaboration, Sony will take charge of marketing, selling, and distributing all of Disney’s new releases and catalog titles on physical media in the U.S. and Canada. Meanwhile, Disney will retain control over its digital media, including premium video-on-demand services.
While the specifics regarding potential layoffs at Disney remain uncertain, sources familiar with the agreement suggest that the studio may conduct an internal assessment across its physical entertainment support functions during the transition to Sony.
Disney states that this licensing model enables the studio to continue offering films and TV shows through physical retailers while responding more efficiently to consumer demands. This shift aligns with the company’s broader strategies and reflects ongoing transitions in various markets.
Despite the rationale behind this decision, physical disc sales have been steadily declining, a trend exacerbated by the industry’s shift towards streaming services. Data from trade association DEG: The Digital Entertainment Group indicates a 28% drop in revenue for physical media in the U.S. during the first half of 2023 compared to the previous year, with projections suggesting revenue may fall below one million dollars for the first time in 2024.
In response to this trend, Best Buy ceased the sales of DVDs and Blu-ray discs both in-store and online at the beginning of 2024. This move follows Netflix’s decision to discontinue its DVD-by-mail service in September of the previous year. While select major retailers such as Walmart, Amazon, and Redbox continue to offer copies of Disney blockbusters like “Avatar: The Way of Water” and “Avengers,” the overall landscape for physical media sales remains uncertain amidst the growing dominance of streaming platforms.
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