Optical (Blu-ray/DVD) and Digital (EST/UV) Sales Thread

[bruceames]

Originally Posted by Malanthius

I think that's part of it. Another thing is I think Hollywood is running out ideas. They have been making movies for 100 years. And we keep getting rehashed ideas. We need some originality. But it needs it also include quality. there have been a lot of stinkers!

I think having original ideas are overrated. Today's writers shouldn't be penalized for failing to come up with a story that hasn't been told. Over time it's a losing battle. Just give them what the public wants and stop trying to overthink and leave good stuff out just because it was in another movie 30 years ago.

I'm sucker for movies like Mr. Majestyk by Charles Bronson. Typical average joe gets underestimated by badass mobster, or like the original Kung Fu, or basically any revenge flick. Basic stuff, just like meat and potatoes, I'll eat it up every time. I want to see good acting and a good story, much more than be introduced to something original. Because if it hasn't been thought up by now, it's probably not a very good story anyway.

[Kosty]

Originally Posted by bruceames

Of course it's valid. Xmas shopping means gifts and spending was up last fall except on OD, which was down by a record amount. Rentals are really not a part of Xmas spending unless you buy someone a Netflix subscription or something.

I was comparing Q4 overall spending YoY to OD Q4 YoY to make a point, and you come back with something about rentals. That's not valid in the framework of my example.

There are many other reasons why OD is declining, of which several have had a greater effect than the economy.

I guess people can afford HDTVs, Ipads, smartphones and going to the movies, but not an OD disc, right? Are those cheaper alternatives?

Part of the decline in revenues is not really as much decline in demand though.

Its lower prices and less revenues generated per unit sold.

Revenues are declining faster than unit sales and much of the 4Q and annual decline in OD revenues is the declining price points of old catalog DVD sales. Blu-ray price points also declined a lot between 2010 and 2011 starting with substantial drops in 4Q 2010.

People can afford a disc and they are still buying them in large numbers, not as much as before obviously, but part of the issue is that those units sales, especially for catalog DVD, are generating substantially less revenues as the retail price points for DVD keep dropping year after year for non new releases.

[Kosty]

Originally Posted by bruceames

I think what's missing in movies today is the star power. Not that many big names that people go see a movie just because so & so is in it. Maybe it's because studios are cutting back on the marketing expenses required to groom big names. Now people are doing their homework and seeing a movie only if it's known to be good or it's a genre that really appeals to them.

I really agree with this. Less stars around now that can reliably deliver results at the box office and people will go out of their way to see as a leading star in whatever movie they are in.

[Kosty]

Originally Posted by Malanthius

I think that's part of it. Another thing is I think Hollywood is running out ideas. They have been making movies for 100 years. And we keep getting rehashed ideas. We need some originality. But it needs it also include quality. there have been a lot of stinkers!

Agree with this too, but part of that is increased risk aversion for corporations in the business. The decline of DVD revenues that have not been replaced by digital or Blu-ray or UV and the rise of cheap rentals and free alternatives makes the old DVD cash cow a memory. Add in the economy sucking for years now and its a concern.

But new ideas are out there its a question of funding and green lights.

Much of the decision making is focused on starting franchises and the foreign box office and other sales as well.

[Malanthius]

Originally Posted by bruceames

I think having original ideas are overrated. Today's writers shouldn't be penalized for failing to come up with a story that hasn't been told. Over time it's a losing battle. Just give them what the public wants and stop trying to overthink and leave good stuff out just because it was in another movie 30 years ago.

I'm sucker for movies like Mr. Majestyk by Charles Bronson. Typical average joe gets underestimated by badass mobster, or like the original Kung Fu, or basically any revenge flick. Basic stuff, just like meat and potatoes, I'll eat it up every time. I want to see good acting and a good story, much more than be introduced to something original. Because if it hasn't been thought up by now, it's probably not a very good story anyway.

You make a great point. I'm a sucker for those kinds of movies as well. But those usually are not Blockbuster titles. Like an Indy or Star Wars trilogy. The Matrix is a great example of originality. I want to see more ideas like that. Ideas we haven't seen. But I'm all for the kinds of movies you discribed. I'm curious about John Carter. I plan on seeing it this weekend. Granted not original. But the trailer looks like it is well done. We shall see.

[Kosty]

Originally Posted by Malanthius

You make a great point. I'm a sucker for those kinds of movies as well. But those usually are not Blockbuster titles. Like an Indy or Star Wars trilogy. The Matrix is a great example of originality. I want to see more ideas like that. Ideas we haven't seen. But I'm all for the kinds of movies you discribed. I'm curious about John Carter. I plan on seeing it this weekend. Granted not original. But the trailer looks like it is well done. We shall see.

The John Carter story was around in I think 1912 before he published the Tarzan stories. Its just never been filmed as a major Hollywood action film before but its been the original inspiration for a lot of SF and fantasy films in many ways. Quite a saga in it not being made before except as some B movie budgets.

I'm curious too about seeing it and seeing its performance.

John Carter, star of Mars and movie screens, was born in Chicago
Edgar Rice Burroughs fueled the imaginations of many with his pulp characters, like Tarzan and John Carter




Chicago writer Edgar Rice Burroughs, the creator of Tarzan and Mars adventurer John Carter, works with a dictation machine in 1939. (American Stock Archive, Getty Images / March 9, 2012)

By Jeff Long, Chicago Tribune reporter
March 9, 2012

As John Carter rides into movie theaters Friday aboard what Disney hopes will be a blockbuster, generations of ageless 10-year-olds, including me, will follow, wide-eyed and grateful. Fans have waited decades for his big screen debut.

If you take the cinematic journey to Mars, or Barsoom as the locals call it, you'll learn that the hero is a Civil War veteran from Virginia. But he was actually born 100 years ago right here in Chicago — in an office at the corner of Monroe Street and Wacker Drive.

That's where a struggling Chicagoan named Edgar Rice Burroughs sold pencil sharpeners. Because business was slow, he had plenty of time to daydream of towering four-armed warriors called Tharks and a beautiful Martian princess, Dejah Thoris.

Part of Burroughs' job was to check the ads in pulp magazines, which were otherwise filled with lurid tales of adventure and romance. He decided his daydreams were even more thrilling, and began writing them down on the backs of old letterheads.

Readers in 1912 enjoyed John Carter so much that Burroughs followed up later that year with a yarn about the child of an English nobleman orphaned in the African jungle. He wrote "Tarzan of the Apes" surrounded by the urban jungle of the Loop, in an office at 5 N. Wabash, during downtime at another dead-end job.

Writers, scientists and filmmakers have credited Burroughs' stories about John Carter of Mars with firing their imaginations. Ray Bradbury, Carl Sagan, George Lucas and James Cameron have all tipped their hats to Burroughs and the story first published a century ago in the pulps, and five years later in book form as "A Princess of Mars." Now, perhaps, the film called simply "John Carter" will inspire others.

The son of a Civil War major, Burroughs was born in 1875 on the West Side, near where the United Center now stands. By 1893, young Burroughs was working at an exhibit for his father's American Battery Co. at the World's Columbian Exposition. One of his duties involved driving an electric car around the lakefront fairgrounds.

Burroughs did a stint in the U.S. cavalry in Arizona, made a stab at prospecting for gold, and held jobs as a storekeeper and railroad cop. In 1900 he married his childhood sweetheart, Emma Hulbert, the daughter of a former alderman.

Burroughs hated the series of jobs that followed, including the pencil sharpener gig. At one point, he pawned his wife's jewelry to keep food on the table.

That changed when John Carter appeared in the February 1912 All-Story Magazine as "Under the Moons of Mars" beneath Burroughs' pseudonym, Norman Bean.

"Norman" was the mistake of an overzealous copy editor, according to Burroughs lore. The byline was supposed to be "Normal Bean," which was the author's way of letting readers know that he was right in the head, despite his outlandish story.

Normal Bean had been a nickname that Burroughs used when he contributed to the Chicago Daily Tribune column "A Line o' Type or Two" and the sports column "In the Wake of the News."

A Cubs fan, by 1911 Burroughs felt anxious because it had been three long years since his team's last World Series win. Some of his contributions to the Tribune reflected that angst, including a poem that ran on Sept. 16, 1911. It begins with a Cubs loss, and a fan fuming over his morning coffee, which tastes like slop.

But by the end, the Cubs have won again:

"My sweet," he said, at eats that night,

"Although it's naught to me,

I note the Cubs played outosight

Today. They'll nail that pennant right.

This is delicious tea."

Although John Carter and Tarzan are his most famous creations, Burroughs took other heroes to far-flung locales: from the Old West among the Apaches, to the moon, Venus, the Earth's core and even beyond the farthest star. Chicago served as backdrop for more than one Burroughs story.

http://www.chicagotribune.com/news/l...0,609285.story

[DonnyDC]

Originally Posted by bruceames

Of course it's valid. Xmas shopping means gifts and spending was up last fall except on OD, which was down by a record amount. Rentals are really not a part of Xmas spending unless you buy someone a Netflix subscription or something.

Im sure redbox might disagree.
http://www.prnewswire.com/news-relea...138803314.html

And I dont think looking at Q4 alone is a good idea. In a weak economy it makes sense for people to save up their money for the holiday period. Doesnt necessarily mean retailers have made a resounding comeback.

Either way I was replying to your notion that if a person believes the economy was the reason for OD going down, then when the economy goes back then OD sales should go back to normal. That isnt true because people may now be habitual renters whether they have more money or not.

I guess people can afford HDTVs, Ipads, smartphones and going to the movies, but not an OD disc, right? Are those cheaper alternatives?

They are.
People are buying vizio rather than sony.
Ipads are cheap or midrange if you wanna compare it with other computers.
Smartphones are basically free on contract.
The alternative to a $15-25 movie is a $1-2 rental if you wanna keep on topic.

[bruceames]

Originally Posted by DonnyDC

Im sure redbox might disagree.
http://www.prnewswire.com/news-relea...138803314.html

LOL, Cherry picking market segments is fun and all, but it's always better to look at the whole picture. OD rental as a whole in 2011 was down 3 percent per the DEG report so this theory of yours about lost sales going to rental holds no water.

And I dont think looking at Q4 alone is a good idea. In a weak economy it makes sense for people to save up their money for the holiday period. Doesnt necessarily mean retailers have made a resounding comeback.

It's the most recent period. Consumer spending as a whole was up the last FULL year as well, while OD declined a record 13.3% (refer again to the link above). So a whole year with the economy going one direction and OD the other. How much more plain does it need to be?

Either way I was replying to your notion that if a person believes the economy was the reason for OD going down, then when the economy goes back then OD sales should go back to normal. That isnt true because people may now be habitual renters whether they have more money or not.

OD is decling because the market got saturated. Back in DVD's heydey (2002-2006), most of its sales were catalog or TV shows. Now that all the desirable titles have been released, people aren't interested in double dipping, especially so soon. Part of the problem is that Blu-ray came out only 9 years after DVD did, giving people the impression that formats have a shorter and shorter life span and thus aren't worth spending money on. Consumers would like to think their purchase will not end up being technically obsolete so soon. And now the studios are already pushing digital and Blu-ray is only 5 1/2 years old.

They are.
People are buying vizio rather than sony.
Ipads are cheap or midrange if you wanna compare it with other computers.
Smartphones are basically free on contract.
The alternative to a $15-25 movie is a $1-2 rental if you wanna keep on topic.

Again, the OD rental market is declining as well. It's more likely consumers are watching less TV because they're on Facebook so much or playing with their smartphone or watching Youtube. The competition for free time is enormous.

[Kosty]

Revenues are the most important metric of course.

But consumer demand does not equate exactly to revennues as it does to units. Unit sales have not fallen as fast as revenues generated from items being sold at lower retail prices that result in less revenues being generated. One has to keep that in mind when talking about long term revenue trends and applying that as a proxy for consumer interest and demand.

Consumers clearly desire old DVD titles less over time and are no longer willing to pay as much for them anymore, but demand at the lower prices still can be more stable than the revenues generated .

[DonnyDC]

Originally Posted by bruceames

LOL, Cherry picking market segments is fun and all, but it's always better to look at the whole picture. OD rental as a whole in 2011 was down 3 percent per the DEG report so this theory of yours about lost sales going to rental holds no water.

Thats overall revenue. $5 blockbuster rentals replaced by $1 kiosk rentals will result in lower revenue. Kiosk use has jumped 31.06% according to your link.
Obvious stuff man.

It's the most recent period. Consumer spending as a whole was up the last FULL year as well, while OD declined a record 13.3% (refer again to the link above). So a whole year with the economy going one direction and OD the other. How much more plain does it need to be?

Blu ray was up as well. Percentage wise it did better than the overall retail industry.

OD is decling because the market got saturated. Back in DVD's heydey (2002-2006), most of its sales were catalog or TV shows. Now that all the desirable titles have been released, people aren't interested in double dipping, especially so soon. Part of the problem is that Blu-ray came out only 9 years after DVD did, giving people the impression that formats have a shorter and shorter life span and thus aren't worth spending money on. Consumers would like to think their purchase will not end up being technically obsolete so soon. And now the studios are already pushing digital and Blu-ray is only 5 1/2 years old.

You seem to be under the impression that I feel DVD should not be in decline. No. Im saying because of the economy DVD decline is accelerated and BDs acceptance is slower.

Again, the OD rental market is declining as well. It's more likely consumers are watching less TV because they're on Facebook so much or playing with their smartphone or watching Youtube. The competition for free time is enormous.

People arent watching less movies. That would result in declines in netflix and redbox too. Heck piracy would be in decline too, but its more popular than ever.

[bruceames]

Originally Posted by DonnyDC

Thats overall revenue. $5 blockbuster rentals replaced by $1 kiosk rentals will result in lower revenue. Kiosk use has jumped 31.06% according to your link.
Obvious stuff man.

Blockbuster hasn't been $5 in years. Where have you been?

If you want units, the NPD reported that movie rentals were down 12 percent last year. I can dig up the link if you like.

Blu ray was up as well. Percentage wise it did better than the overall retail industry.

You seem to be under the impression that I feel DVD should not be in decline. No. Im saying because of the economy DVD decline is accelerated and BDs acceptance is slower.

Once again, I am looking at ALL of physical (optical disc = DVD + Blu-ray). The Big Picture. That's what I've been talking about the whole time, not just one segment of the physical market, like Blu-ray or Redbox.

Last year Blu-ray sell-through grew by $350 million while DVD declined by $2.05 billion, a net decline of $1.7 billion for the OD industry. A record decline which occured in an improving economy. Blu-ray only covered 17% of DVD's attrition.

People arent watching less movies. That would result in declines in netflix and redbox too. Heck piracy would be in decline too, but its more popular than ever.

Heck, I didn't know that there are more than 24 hours in a day now. So where people getting all that facebook and Youtube time from?

[TowerGrove]

Originally Posted by bruceames

Blockbuster hasn't been $5 in years. Where have you been?

If you want units, the NPD reported that movie rentals were down 12 percent last year. I can dig up the link if you like.



Once again, I am looking at ALL of physical (optical disc = DVD + Blu-ray). The Big Picture. That's what I've been talking about the whole time, not just one segment of the physical market, like Blu-ray or Redbox.

Last year Blu-ray sell-through grew by $350 million while DVD declined by $2.05 billion, a net decline of $1.7 billion for the OD industry. A record decline which occured in an improving economy. Blu-ray only covered 17% of DVD's attrition.

Heck, I didn't know that there are more than 24 hours in a day now. So where people getting all that facebook and Youtube time from?

If your looking at the big picture shouldn't you also include EST? Especially as it becomes more and more important?

[bruceames]

Originally Posted by TowerGrove

If your looking at the big picture shouldn't you also include EST? Especially as it becomes more and more important?

Yes, if you're talking about all sell-through. But we were discussing the reasons behind the OD decline. But even if you do include EST, it has made much of a dent yet, and growth rate is still small. It's not like one can say EST is one of the reasons why OD is declining.

[Kosty]

Originally Posted by bruceames

Once again, I am looking at ALL of physical (optical disc = DVD + Blu-ray). The Big Picture. That's what I've been talking about the whole time, not just one segment of the physical market, like Blu-ray or Redbox.

Last year Blu-ray sell-through grew by $350 million while DVD declined by $2.05 billion, a net decline of $1.7 billion for the OD industry. A record decline which occured in an improving economy. Blu-ray only covered 17% of DVD's attrition.

First off you once again have to ignore the effect of releases which everyone in the industry understands affected the statistics last year.


But the more important issue is that not all sales have the same significance. Even though they count the same as revenues or unit sales, lower priced DVD catalog sales are far lower margin and generate less profit to the studios and retailers than new release DVD sales, new to Blu-ray sales and new release and premium sku Blu-ray units.

If most of the OD revenue decline is in low margin catalog DVD sales because those units are commanding a lower price at retail and almost all of the gain is in higher margin Blu-ray sku sales then that's a different dynamic to consider.

Blu-ray is doing much better to cover DVD attrition since 2007 in the most important and profitable higher margin segment of new release sales than for the less important and less profitable catalog DVD sale segment. At this point also any Blu-ray catalog sales that are occurring are pure extra found revenue to the studios harvested from their libraries.

The overall decline in OD revenues of course is a concern but Blu-ray is doing best in the new release segment where the margins are best and volumes per title are highest. So its not like all revenues for OD sales are equally important.

DVD revenues from catalog sales were destined to decline anyway as the studios ran out of older titles to release and those titles were exposed for longer periods of time in release at retail. With DVD at full household penetration for many years now it was inevitable that price points would decline at retail and less revenues generated for catalog sales. That would have happened with or without Blu-ray.

Blu-ray is increasing in sales while DVD is in decline. Combining the two is misleading in many ways. As long as higher margin Blu-ray sales continue to increase and have volumes better than EST the studios and retailers will continue to see Blu-ray as an important and successful new revenue stream that along with other new digital revenue streams will together be modern alternatives to offset the decline of DVD. No one revenue stream, or Blu-ray alone will replace DVD and everyone knows that.

[Kosty]

Originally Posted by bruceames

Yes, if you're talking about all sell-through. But we were discussing the reasons behind the OD decline. But even if you do include EST, it has made much of a dent yet, and growth rate is still small. It's not like one can say EST is one of the reasons why OD is declining.

A lot of OD declines is that older DVD releases, at lower retail price points, are generating less revenues per unit sold and thus are contributing less overall revenues to the statistics.

The growth of Blu-ray catalog unit sales and revenues although substantial has not covered that decline in catalog DVD revenues.

That's one of the major reasons for the overall OD decline over the years.

New release declines are less as Blu-ray has done better there and a substituted higher price Blu-ray sale in place offsets some of the DVD new release decline that did not convert to Blu-ray.

Plus much of the OD decline last year in new release sales was a result of the poorer new releases that had 8% less box office power and did not include the blockbuster Avatar and Twilight Saga movies that 2010 had in comparison to 2011.

It will be interesting to see if and when the effect better relative releases in 2012 for home video have in the statistics this year.