As DVD sales have fallen drastically in the last two years, filmstudios are experimenting with new ways to boost sales figures. The latest experiment comes from Sony Pictures. Sony began selling downloads of two new releases for less than the $15 DVD price. At Amazon.com and iTunes, "The Tourist" and "How Do You Know" could be downloaded for $12.99. The disc sold for $15.

By doing this, Sony is searching for a price that stimulates download sales but won't erode demand for DVDs. Although the choice of titles may have to do with the fact that both movies were disappointments at the box office, it is interesting that Sony is now serious about offering low-priced download-to-own videos.

In the film producers battle against cheap or free downloading and streaming services online, number one streaming service to beat at the moment is Netflix. Netflix is a popular film-rental service, that offers unlimited movie streaming for $8, less than the price of a single DVD. The difference with downloading is that you do not own the movie, you can only watch it on Netflix. The difference for Hollywood is: Licensing revenues from online rental services are lower than actual sales revenues. Netflix saw a 60 percent increase last year in its subscriber numbers. The appealing thing about renting a movie at Netflix seems to be its low price and its user-friendliness. As film and television producers see some of their income evaporate through Netflix, the rental service can expect the next round of licensing negotiations to be tough. Higher fees may very well make the service less attractive.

Meanwhile in Hollywood, the key ingredients of selling things online, convenience and low prices, are mixed together with innovative film products. Five major film companies have agreed to support UltraViolet, a set of technology standards designed to let movie buyers store and transfer films via cloud computing and access the movies with any web-connected device. Combined with the latest action of selling downloads for less than the average DVD price, the idea is to boost interest in authorized downloads by making it easier to buy, play, and store films than it is having a DVD. The sky is the limit.

Source: Cnet