This article [via Instapundit] claims that “Hollywood” is in a death spiral because it’s destroying movie theater chains. Because an increasing majority of movie profits are coming from channels other than movie theaters, the big Hollywood studios are reducing the time between theatrical releases and secondary releases, such as to pay-per-view or DVDS. This in turn further reduces theater income, leading to a death spiral.
But a death spiral for whom? According to the article, overall profits are still rising even as theater revenue stagnates. I could see how this would be a death spiral for movie theater companies, but the Hollywood studios? The final paragraph discusses how terrible this has been for the movie theaters but fails to even hint at a connection to the financial fortunes of Hollywood studios after spending most of the article noting how rapidly theaters are becoming irrelevant to those same studios. It’s like complaining that airplane manufacturers are going down because the shift to jet engines is killing the propeller makers while increasing profits for the airplane companies.
The author says that he’ll reveal how Hollywood studios can escape from this spiral of rising profits, something I’m sure the studio executives await with baited breath.