The Walt Disney Company has just announced a new deal that will see Sony Pictures Entertainment acquiring control over a large part of Disney Home Entertainment.
On Tuesday, The Walt Disney Company made two huge announcements related to its home entertainment division.
Early in the day, Disney announced the end of an era in home video entertainment with the closure of the Disney Movie Club. The program required membership to participate, and members could purchase physical media like DVDs and Blu-Ray discs and have their favorite Disney films delivered right to their front doors. But in recent years, consumer trends have changed dramatically as viewers can now stream many of those titles on the Disney+ streaming platform.
The Disney Movie Club service will officially end on May 20, 2024, and final orders must be placed by that day. Eligible returns will be accepted through September 2024.
But the move to dissolve the club didn’t signal an end to the manufacturing and distribution of Disney titles in physical media form. That was confirmed by Disney’s announcement on Tuesday afternoon when the company unveiled details of a new partnership with Sony Pictures Entertainment.
As part of the newly struck deal, Sony will take over the manufacturing, distribution, and marketing of Disney DVDs and Blu-Ray Discs, as well as other forms of physical media, meaning that physical media forms of Disney titles will still be available–though not through Disney Movie Club or directly from Disney.
Sony will be responsible for the marketing and selling of all of Disney’s new releases, as well as its catalog titles, in physical media to retailers and distributors throughout the United States and Canada. The Walt Disney Company will continue its digital media operations, including premium video-on-demand.
As of the time of this publication, it is unclear whether the transfer of these operations to Sony will result in layoffs at Disney. But sources have said that Disney is expected to undergo an internal assessment across all of its business efforts that have supported physical entertainment forms following the transition of operations to Sony.
Per Variety:
According to Disney, the licensing model allows the studio to continue to offer films and TV shows through physical retailers and to respond to consumer demand more efficiently. The company said the shift is consistent with strategies it’s implemented companywide, as well as transitions in other markets.
Whatever the reasoning, physical disc sales have long been in decline — and they show no signs of rebounding amid the industry’s streaming boom. Revenue for physical media in the U.S. dropped 28%, to $754 million, in the first half of 2023, compared with $1.05 billion in the prior year, according to data from trade association DEG: The Digital Entertainment Group. It’s projected that 2024 will be the first year revenue drops below one million dollars.
The official date of the move to Sony has not been announced, likely because the transition is a process. As this is a developing story, more information will be shared as it becomes available.
