Universal and Warner Bros. Strike Sweeping DVD Joint Venture

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The partnership plans to commence in early 2021 pending regulatory approval.

Looking to streamline costs, Universal Pictures and Warner Bros. on Wednesday announced a joint venture that will see the two Hollywood studios share distribution duties for their physical DVDs in North America.

The partnership intends to commence in early 2021, pending regulatory approval. The two studios will continue to operate their digital distribution businesses independently, and retain content and consumer marketing for both physical and digital.

For years, DVD sales were a cash cow for Hollywood and it would have been unimaginable for two major studios to combine their efforts. That all changed with the rise of streaming and digital platforms. Now, physical products are a fraction of overall home entertainment sales.

Financial terms of the joint venture were not disclosed. The companies also declined to say how the consolidation might impact jobs.

The announcement was made by Universal Filmed Entertainment president and chief distribution officer Peter Levinsohn and Warner Bros. president of worldwide theatrical distribution and home entertainment Ron Sanders.

“The physical business is still an important and active category for the industry," Sanders said in a statement. "This proposed joint venture with Universal gives us the best opportunity to foster innovation in this business, optimize the physical offering and extend the lifespan of the format for our fans and consumers.”

The North American joint venture will include leadership from both studios, and will be run by Eddie Cunningham, who presently serves as president of Universal Pictures Home Entertainment.

The combined operations will be responsible for Blu-ray, DVD and 4K UHD distribution for up to 10 years.

Additionally, Warners and Universal are teaming in key European territories. Universal's home entertainment operation will assume responsibility for the distribution of Warners’ physical home entertainment products in Germany, Austria, Switzerland and Japan, while Warners will handle Universal's in the U.K., Italy and Benelux (Belgium, the Netherlands and Luxembourg).

“With market conditions and consumer viewing behaviors continuing to evolve, we wanted a partner who shares in our commitment to deliver the best consumer proposition going forward,” Levinsohn added. “This proposed JV presents a significant opportunity to continue to work with our retail partners to ensure the format’s strength and sustainability for years to come.”

Tentpoles from the two studios in 2021 include the next installments in the Jurassic World (Universal) and Suicide Squad (Warner Bros.) series.