Thursday, April 22, 2004

Back up in your ass with the resurrection

[T]he success of the DVD is altering priorities and the balance of power in the making of popular culture....DVD has resuscitated canceled or nearly canceled television series like "The Family Guy" and "24," and has helped small art movies like "Donnie Darko" win rerelease in theaters. It is also beginning to affect the kinds of movies being made, as DVD revenues figure heavily in green-light decisions and are used as a perk to woo craft-conscious movie directors.
I have argued before that the profit to be made from DVD sales aligns the incentives of the entertainment industry more closely with those of audiences. It is my fervent hope that this will directly result in fewer market failures, i.e. really terrible movies and TV shows. Reliance on box office (as opposed to DVD and other home video sales) gave the film industry an incentive to heavily market bad movies in the hope that they could grab as much of the filmgoing audience's money as possible before the spread of bad word-of-mouth or poor reviews. DVD's are typically released months after movies appear in theatres and, therefore, well after the information asymmetry between buyer and seller has been largely eliminated. The only way to recreate both the misalignment of short-term incentives and the information asymmetry would be simultaneous DVD and theatrical releases that would undercut each other. I therefore predict that the entertainment industry's increasing reliance on DVD profits will result in better movies and TV shows.

There are, of course, exceptions that test every rule.