diagnosing the dvd disappointment a life cycle view judson coplan leonard n stern school of business glucksman institute for research in securities markets faculty advisor william greene april 3 2006 2 i introduction development digital versatile disc formerly known as video was perhaps most significant innovation entertainment since color television players and pre recorded films penetrated us homes at rate faster than any consumer electronics device on record 1 movie studios realized unprecedented revenue growth with sales movies rivaling even exceeding corresponding box office receipts furthermore new format neatly replaced quickly aging medium vhs while offering far higher profit margin its analog predecessor 66 vs 45 2003 mere eight years after invention it appeared that hollywood had found high machine next decade then suddenly trends shifted 2005 unit shipments tv shows fell to just 9 year over compared 50 both 2004 prices sell through ie end consumers
