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Under a new multi-year agreement, Sony Pictures will handle distribution for Lionsgate’s physical home entertainment releases in the United States and Canada.

Lionsgate will continue to maintain its own independent sales and marketing teams, while leveraging Sony Picture Home Entertainments supply chain and distribution services for DVD sales. Sony Pictures Home Entertainment will begin distributing Lionsgate physical home entertainment properties in July.

“We’re excited to embark on this new relationship with Lionsgate in physical home entertainment,” said Jason Spivak, Sony Pictures Home Entertainment’s executive VP of distribtion. Spivak announced the agreement on Friday, along with Ron Schwartz, Lionsgate’s president of worldwide distribution.

The pact comes amid the decline of physical disc sales and a boom in streaming. As online platforms skyrocketed in popularity, the U.S. sales of DVDs dropped 25.55% in 2020, to $2.45 billion, according to the trade group DEG: The Digital Entertainment Group. At the same time, DVD rentals declined 26.8% to $1.04 billion.

According to Sony and Lionsgate, the partnership will help both companies operate more efficiently.

“By working together, we can identify and leverage efficiencies in the supply chain that will benefit not only our respective studios, but also retailers, and ultimately, the millions of consumers who enjoy Sony Pictures and Lionsgate feature films and TV programs in the 4K UHD, Blu-ray and DVD formats,” Spivak said.

Schwartz added, “We’re pleased to be working with Sony Pictures, a respected world-class distributor who shares our philosophical commitment to the customer. This collaboration makes both our businesses even stronger, and our new agreement enhances our ability to serve the retail community and consumers with innovation, adaptability and strong content slates in the years to come.”

(Pictured: Lionsgate’s “Knives Out”)