As we await the outcome of the bidding process for the debt-ridden MGM studio, Variety has published an interesting story that sheds a little light on the process.

We’ve all heard about the slump in DVD sales, as viewers switch over to online rentals. In recent decades, with its production moribund or low, MGM has particularly depended on income from sales of its older films on DVD. Given that the studio was one of the top producers in Hollywood in its golden age, it has an impressive library of titles: The Wizard of Oz, Singin’ in the Rain, North by Northwest.

That library is a big part of the package of assets that MGM is offering to bidders. According to Variety, though:

While MGM is hoping for more than $2 billion for more than 4,000 movies, including the James Bond franchise and half of the rights of two upcoming “Hobbit” films, and 10,000 TV episodes, the nearly 10 potential bidders, including Time Warner and Lionsgate are looking to pay less than that. [...]

While MGM was adept at repeatedly repackaging its top films on DVD, the older a film gets the less valuable it becomes to consumers, analysts say. There’s only so much coin that can be squeezed out of even a James Bond film, no matter how many special editions are released.

In the U.S. alone, MGM’s net receipts from DVDs fell from $140 million in its 2007 fiscal year to just $30 million by 2010, according to Edward Jay Epstein, whose book “The Hollywood Economist: The Hidden Financial Reality Behind the Movies” is being published this month.

The implication seems to be that the Bond and Hobbit rights are playing a larger part in the overall calculations of the companies that are bidding on MGM’s assets than they might have without the decline in DVD sales.