Disney is entrusting a significant portion of its home entertainment division to Sony Pictures Entertainment. Sony will handle the manufacturing, distribution, and marketing of Disney’s DVDs, Blu-ray discs, and other physical media.
Under the terms of the agreement, Sony will handle the marketing, sales, and distribution of all of Disney’s new releases and existing catalog titles on physical media to consumers in the U.S. and Canada through various retailers and distributors. Disney will retain control over its digital media offerings, such as premium video-on-demand services.
As per a Variety report, it’s yet to be seen if this deal causes any layoffs at Disney. However, the studio will conduct an internal assessment across all business functions that support physical entertainment amid the transition to Sony.
In a statement, Disney said that the licensing model will allow them to continue to offer films and TV shows through physical retailers, and will be swift in meeting the consumer demand. The company stated that this transition aligns with its overarching strategies implemented across the entire organization, as well as similar shifts observed in other markets.
According to data from trade association DEG: The Digital Entertainment Group, revenue for physical media in the US dropped 28%, to $754 million, in the first half of 2023, compared with $1.05 billion in the prior year. It is projected that 2024 will be the first time when the revenue will drop below one million dollars.
Consequently, Best Buy ceased the sale of DVDs and Blu-ray discs both in-store and online in early 2024. This decision came after Netflix announced in September of the previous year that it would be discontinuing its DVD-by-mail service. Walmart, Amazon, and Redbox are among the few major retailers still offering copies of popular Disney blockbusters like “Avatar: The Way of Water” and “Avengers”.
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