Universal and Warner Bros. propose joint DVD venture

Universal Studios and Warner Bros. have announced a newjoint venture to pool DVD distribution units amidst falling sales.

The duo announced the partnership plans will commence in early 2021, pending regulatory approval, as a strategic move to address declining physical disc sales. 

The joint venture (JV) will bring together the combined sales, retail marketing and distribution of the two physical home entertainment operations from Universal Pictures Home Entertainment and Warner Bros. Home Entertainment in the US and Canada.

The deal covers the sales of new releases, library titles and television content for Blu-ray, DVD and 4K UHD distribution for up to 10 years which will come under leadership from both Universal and Warner Bros with the supervision of Eddie Cunningham.

According to trade group DEG: The Digital Entertainment Group sales of DVDs in the US fell 9.4% in 2019, to $5.9 billion, down from about $9 billion in the US in 2011.

Universal and Warner Bros. said the deal on the DVD sides of their houses will help companies gain operational efficiencies and be able to better respond to evolving customer demand.

The two announced the major new deal yesterday with the hopes the JV will allow continued innovation while maintaining a diverse choice of product for retailers and consumers. Under the proposed structure, the studios will continue to operate their digital distribution businesses independently and retain content and consumer marketing for both physical and digital.

Warner Bros. Home Entertainment, Warner Bros. pictures president and worldwide distribution president Ron Sanders said: “As the home entertainment landscape evolves, we are continuously working to deliver the best entertainment range and value to our fans.

“The physical business is still an important and active category for the industry. This proposed joint venture with Universal gives us the best opportunity to foster innovation in this business, optimise the physical offering and extend the lifespan of the format for our fans and consumers.”

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Separate from the JV, the studios have also agreed to license arrangements pursuant to which Universal will assume responsibility for the distribution of Warner Bros.’ physical (disc) home entertainment products in Germany, Austria, Switzerland and Japan.

This is expected to go live in Q3 2020, while Warner Bros. will assume responsibility for the distribution of Universal’s physical (disc) home entertainment products in the UK (including Eire), Italy and Benelux (Belgium, the Netherlands and Luxembourg), expected to occur in Q1 2021.

Universal Filmed Entertainment Group president and chief distribution officer Peter Levinsohn said: “With market conditions and consumer viewing behaviours continuing to evolve, we wanted a partner who shares in our commitment to deliver the best consumer proposition going forward.

“This proposed JV presents a significant opportunity to continue to work with our retail partners to ensure the format’s strength and sustainability for years to come.”

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