There were a lot of shuffling feet in Tinseltown yesterday.
Over at Walt Disney (NYSE:DIS), Rich Ross was tapped to be the chairman of the family entertainment giant's movie studio. He previously supervised the company's Disney Channel operations, and now takes the studio's helm after a year of disappointing movie results from former Chairman Dick Cook.
There was a little more bloodshed at General Electric's (NYSE:GE) majority-owned Universal Studios, where two of its top movie executives were dismissed.
Both film giants are struggling. This has been a somewhat resilient year at the box office, but not for Disney and Universal. Recent Disney duds include G-Force, while Universal has flopped with Land of the Lost and Funny People. Slowing DVD sales only compound these moviemakers' troubles at the multiplex.
Folks just aren't buying optical discs the way they used to. There was some initial excitement when the industry rallied behind Sony's (NYSE:SNE) Blu-ray as the next-generation platform of choice, but consumers are in no rush to restock their home video libraries.
We can partially blame the Internet; Hulu and Google's (NASDAQ:GOOG) YouTube have stolen a good chunk of the audience that DVD players used to command. As more home-theater devices begin offering access to free online streams, there will be even less of a need for personal content libraries. The viewing choices keep growing exponentially, without the need to snap up the latest DVD and Blu-ray discs. No executive shakeup can fix that grim trend for the industry.
This doesn't mean that Disney and Universal weren't ripe for some fresh thinking on the theatrical front. Box-office hits become even more important as the home video revenue stream dries up. However, it's hard to imagine Disney's streak of movie flops continuing, now that it will have Marvel Entertainment (NYSE:MVL) on its side.
Ross is stepping in at the right time -- during a film studio lull, and just as the Disney Channel appears to be peaking.
I just hope that all media moguls are adjusting their cinematic expectations accordingly. The future isn't as bright as they think.
