Hollywood Reeling From DVD Slump
Disappearing profits threaten movies, star deals
By Peter Fearon,  Newser Staff
Posted Jan 16, 2009 6:40 AM CST
Shoppers look through bins of DVD movies. DVD sales are slumping so badly that Hollywood studios may be forced to renegotiate their deals with stars.   (AP Photo/Mike Derer)
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(Newser) – Hollywood studios are faced with huge losses because of a 21% slump in DVD sales and the fallout from the crisis on Wall Street, reports the Financial Times. Studio heads have been forced to cut back on the number of new movies in production and are preparing to trim the multi-million-dollar deals of Hollywood stars.

Studios rely on DVD sales for profitability, since many movies merely break even at the box office. “Studios are going to have to renegotiate a lot of talent deals if new movies are going to get made,” said one senior studio executive. “There’s nowhere else to shave the money than with the talent.”