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Paramount Considering Combining Forces With Fox and Sony to Cut Costs
1-Jul-2009
Written by: Kris Lorenz
DVD distribution consolidating to cut costs
The entertainment industry has suffered a blow in the wake of the worst American recession in 80 years. DVD sales, which account for a large portion of studios’ revenue, have been declining over the last four years, with a particularly sharp decline of over 14% in the last few months.
This rapid decline has prompted Paramount Studios to enter talks with rivals Fox and Sony Pictures about combining their DVD distribution and production operations. The move would potentially cut costs for each of the companies and would help them stay afloat in these troubled economic times.
Any potential transactions are still in embryonic stages, and no full merge in businesses is likely to happen very soon. High definition DVDs, such as Sony’s Blu-Ray format, are expected to pick up in sales as costs decline and more people are able to afford them.
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