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DVD Sales Decline Concerns Movie Studios

NYTimes reports that after more than half a decade as Hollywood's savior, the DVD is looking a little tired � and the movie studios, for once, are having trouble coming up with a sequel.

DVD sales represent more than half of the revenue studios generate from most of their movies. But those sales are expected to grow just 2 percent this year, a far cry from the double-digit growth the industry enjoyed just two years ago. High-definition DVD's were supposed to pick up the slack, but technical delays and a thorny format war between camps led by Sony and Toshiba have dampened expectations.

Studios are starting to beam digital movie files to consumers over the airwaves and send them through the Internet, but sales so far are minuscule. Rentals and video-on-demand, though growing, generate far smaller profits for the studios than store-bought DVDs.

This explains why executives who gathered in Los Angeles earlier this month for an industry conference expect, for better or worse, that the plain old DVD will remain their bread and butter for several more years. Meanwhile, they are trying everything they can in their quest for a new cash cow.

For the studios, the clock is ticking: sales of standard discs are expected to fall by about 20 percent by 2010, according to Adams Media Research, an industry consultant based in Carmel, California.

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