Universal Pictures and Warner Bros. are entering into a North America ten-year joint venture with regard to their home entertainment arms. Separate from that deal, both studios are committing to license each other’s disc products in certain offshore markets.

The new domestic j.v., which is subject to regulatory approval, will distribute Blu-ray, DVD and 4K UHD for new releases, library titles and television content in U.S. and Canada and combine sales, retail marketing and distribution ops for both majors. Leadership from Universal and Warner Bros. will be involved in this new partnership and be presided over by industry veteran Eddie Cunningham.

The announcement was made today by Peter Levinsohn, President and Chief Distribution Officer, Universal Filmed Entertainment Group, and Ron Sanders, President, Worldwide Theatrical Distribution & Home Entertainment and EVP, International Business Operations, Warner Bros.

Related Story 'The Boss Baby: Family Business': Jeff Goldblum, James Marsden, Eva Longoria, Ariana Greenblatt & Amy Sedaris Join Alec Baldwin In DreamWorks Animation Sequel

Even though streaming drove 63% of 2019’s $25 billion home entertainment revenues, the demand for physical product titles remains solid having earned $5.9B on Blu-ray Disc, DVD, 4K Ultra HD and digital per the Digital Entertainment Group’s recent report. From what I understand, Universal and Warner Bros. share the same mission in regards to maintaining this revenue stream, not only through operational efficiencies, but also through innovation. Their goal is to sustain the longevity of the physical category in a global marketplace where consumers’ viewing habits are continually evolving. In addition, from what I’ve heard, even with the shiny introduction of Disney+, that Burbank studio isn’t abandoning their DVD arm as consumers continue to scoop up Marvel, animation and Star Wars titles following their theatrical release.

Universal and Warner Bros. home entertainment j.v. will be up and running by Q1 2021. Under the proposed structure, the studios will continue to operate their digital distribution businesses independently and retain content and consumer marketing for both physical and digital.

Under their new home entertainment license arrangements, Universal will distribute Warner Bros.’ physical home entertainment products in Germany, Austria, Switzerland and Japan, with an anticipated start date of Q3 this year. Warner Bros. will oversee the distribution of Universal’s physical home entertainment products in the U.K., Italy and Benelux (Belgium, the Netherlands and Luxembourg) starting Q1 2021.

“As the home entertainment landscape evolves, we are continuously working to deliver the best entertainment range and value to our fans,” said Sanders. “The physical business is still an important and active category for the industry. 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.”

“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,” said Levinsohn. “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.”

On the appointment of Eddie Cunningham, Levinsohn said, “For more than two decades Eddie has been an expert in understanding the evolution of the physical home entertainment landscape. He’s been a dynamic leader in shepherding business innovation and operational effectiveness.”