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Old 01-27-2012, 10:53 PM   #1096
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The only place for Blu-ray to go is to become the only SKU therefore driving it's sales higher. We've already seen scenarios like that. It's the only way Blu-ray will ever top 3 billion a year - killing off the DVD SKU. As it stands Blu-ray has peaked and catalog is falling off a cliff.
Even if they kill off the DVD sku on every new theatrical release (not TV shows, that would be ridiculous, as most of those don't even make it to Blu-ray to begin with), Blu-ray will still have less than a 50% share. This is because DVD is sold virtually everywhere and the content library is so deep.

Only about 1/3 of DVD revenue comes from the top 20 sellers, vs. approximately 2/3 from Blu-ray. Since Blu-ray has a much higher market share among new releases, around 40% new release, that means they have a lower market share among non-new releases (everything else).

DVD averaged $130 million per week last year, and 1/3 of that is $43 million. Meanwhile Blu-ray averaged $41 million per week last year, and 2/3 of that is $27 million. 27/70 is a 40% share for the year in the top 20, which is about what it was (actually lower when you give equal weight to all the weeks, but one need to weigh the stronger weeks more when Blu-ray had a better T20 share).

Let's say we wiped out that $43 million earned by T20 DVD and gave it to Blu-ray. That would still leave $87 million for DVD and move Blu-ray up to $84 million. Of course, that's assuming all T20 sales are new theatrical releases, but obviously some of those will be TV shows released on DVD only, and other TV shows released on both formats. Therefore it wouldn't be that close at all.

That's why we keep seeing Blu-ray shares in the low 20's, while top 20 share are 50% higher on average, and some titles getting a majority share for Blu-ray. It's the DVD libary. It blows that of Blu-ray away and always will.

Last edited by bruceames; 01-28-2012 at 08:55 AM.
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Old 01-27-2012, 11:23 PM   #1097
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Even if they kill off the DVD sku on every new theatrical release (not TV shows, that would be ridiculous, as most of those don't even make it to Blu-ray to begin with), Blu-ray will still have less than a 50% share. This is because DVD is sold virtually everywhere and the content library is so deep.

Only about 1/3 of DVD revenue comes from the top 20 sellers, vs. approximately 2/3 from Blu-ray. Since Blu-ray has a much higher market share among new releases, around 40% new release, that means they have a lower market share among non-new releases (everything else).

DVD averaged $130 million per week last year, and 1/3 of that is $43 million. Meanwhile Blu-ray averaged $41 million per week last year, and 2/3 of that is $27 million. 27/70 is a 40% share for the year in the top 20, which is about what it was (actually lower when you give equal weight to all the weeks, but one need to weigh the stronger weeks more when Blu-ray had a better T20 share).

Let's say week wiped out that $43 million earned by T20 DVD and gave it to Blu-ray. That would still leave $87 million for DVD and move Blu-ray up to $84 million. Of course, that's assuming all T20 sales are new theatrical releases, but obviously some of those will be TV shows released on DVD only, and other TV shows released on both formats. Therefore it wouldn't be that close at all.

That's why we keep seeing Blu-ray shares in the low 20's, while top 20 share are 50% higher on average, and some titles getting a majority share for Blu-ray. It's the DVD libary. It blows that of Blu-ray away and always will.
And that my friend is why I've always said how very important catalog is. Something some tried to pass off as not so important because it wasn't selling well on Bluray. You can see how wrong they were.
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Old 01-27-2012, 11:57 PM   #1098
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The revenues generated by the top 20 or top 30 DVD releases each week is a lot more than 33% of DVD revenues. Not units, but revenues. A lot of catalog DVD unit sales are at very low price points per units sold.

Blu-ray is a lot more concentrated in the top 20 or new releases in terms of both revenues and units. But its not as extreme as 33% vs 80%.

Or at least that's the way it was through 2010 when I last saw detailed data. Its possible that Blu-ray gains in the new release marketshare during 2011 may have grabbed more of that DVD new release revenue share than was the DVD catalog to newer release split before.

But its important that Blu-ray is grabbing a large portion of the new release revenues as that extends that profitable revenue stream into high definition sales for the near future.

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Old 01-28-2012, 08:41 AM   #1099
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The revenues generated by the top 20 or top 30 DVD releases each week is a lot more than 33% of DVD revenues. Not units, but revenues. A lot of catalog DVD unit sales are at very low price points per units sold.

Blu-ray is a lot more concentrated in the top 20 or new releases in terms of both revenues and units. But its not as extreme as 33% vs 80%.

Or at least that's the way it was through 2010 when I last saw detailed data. Its possible that Blu-ray gains in the new release marketshare during 2011 may have grabbed more of that DVD new release revenue share than was the DVD catalog to newer release split before.

But its important that Blu-ray is grabbing a large portion of the new release revenues as that extends that profitable revenue stream into high definition sales for the near future.
It's possible the DVD top 20 revenue could be as high as 40% of its total, but that would make Blu-ray 85% instead of 67%. I would think the Blu-ray T20 revenue is less than 85% of its total. 85% would mean the format has no tail, that it's just a new release format and the other titles practically wither on the vine.

Here's what we know for 2011 averages:

Blu-ray overall share: 24%

Blu-ray top 20 share: 40% (approximate. revenue share is probably a few percent higher, while unit percentage a few percent lower)

DVD average revenue: $130 million

Blu-ray average revenue: $41 million

So, if we 'fix' the top 20 average revenue for one format, we can calculate for the other. Let's 'fix' (estimate) Blu-ray at 85% of its total.

85% of $41 million is $34.9 million. That's would be the top 20 Blu-ray revenue. Everything else is the remainder, or, $6.1 million.

Now, since Blu-ray's top 20 share is 40% (give or take a few percent), the DVD top 20 revenue is therefore $34.9 * (60%/40%) = $52.3 million.

That makes the DVD top 20 share $52.3 / $131 = 40.0%. It's all mathematical. Just plug in a guess for one variable and out pops the result for the other.

Just for kicks, let's make Blu-ray's top 20 at 100%, so that anything under the top 20 sells zero.

DVD's top 20 revenue would be (assuming a 40% top 20 BD share) $41 * 1.5 = $61.5 million / $131 million = 46.9%. So even with Blu-ray being completely a new release format, and having useless catalog value, DVD new release is still under 47% of its total.

That's as high as it can mathematically be, but done by sucking all the life out of the below T20 Blu-ray.

Another point worth noting, is that it's likely the average Blu-ray top 20 revenue share is even higher than the 'conservative' 40% estimate I have given (calculated using the average of the Nielsen First Alert data), so if anything the results favor DVD top 20 having an even lower percentage than derived above.

Another side note: if Blu-ray T20 was 85% of its total, then that remaining $6.1 million revenue would be compared to the $78.7 million DVD revenue that resides below the top 20. That would make the below T20 Blu-ray share a mere 7.7%. Not a very healthy "catalog" percentage for a format over five years into its life cycle.

Kosty, what would be your estimate of the Blu-ray T20 revenue share of its total Kosty? Would it be more, or less than 85%?

Last edited by bruceames; 01-28-2012 at 09:14 AM.
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Old 01-28-2012, 08:53 AM   #1100
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And that my friend is why I've always said how very important catalog is. Something some tried to pass off as not so important because it wasn't selling well on Bluray. You can see how wrong they were.
That's right. Catalog is the backbone of any healthy format. Depending on new releases is like living paycheck to paycheck.
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Old 01-28-2012, 09:07 AM   #1101
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Sony bet the farm on the wrong horse. They put all their effort into 3D and blu-ray. Neither have been a boom. They lost billions betting on blu-ray instead of putting their efforts into their gaming business and most important TV business.

Sony has to realize they are no longer the Hi End business model like Apple. Sony used to be able to fool customers into thinking their overpriced stuff was worth it, but times have changed and it has gone to Apple.

All the facts are right there if you know how to read Sony's financial statements. They bet badly and Stringer should be fired.

They shunned their entire gaming audience to win the format war with the PS3. Thats a fact. Everyone in the gaming industry knows this. It cost them bigtime. Hardcore gamers go with the xbox over the PS3. Thats just a fact. The reason why is because most multiplat titles are optimized for the 360 while the PS3 gets broken games and lousy ports. Its architecture is too hard and complicated over the xbox. ITs cheaper and easier for developers to make games on the xbox. So much similar to the PC architecture. MSFT also gives better support with having engineers work with the game studios on site to make sure their game is going to work better than the PS3 counerpart. People at Bethesda studios have said so.
Sounds like you are arguing more against the CELL. Bluray had nothing to do with architecture. It is merely storage.

And plenty of multiplatform titles do lead with the PS3. LA Noire, Metal Gear Rising, Medal of Honor, and more.

So no, what you said above is not fact. In fact most of the things above that you say are "fact" are actually pure opinion.

How exactly did they shun their entire gaming audience? That doesn't even make sense. They've sold 3M less consoles than the 360. How is that shunning? PS3 EA and Capcom titles commonly outsell their counterpart 360 titles.

It's quite easy to take down most of your "facts".

Last edited by bombsnizzle; 01-28-2012 at 09:13 AM.
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Old 01-28-2012, 09:10 AM   #1102
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Sounds like you are arguing more against the CELL. Bluray had nothing to do with architecture. It is merely storage.

And some multiplatform titles do lead with the PS3. LA Noire, Metal Gear Rising, Medal of Honor, and more.

So no, what you said above is not fact. In fact most of the things above that you say are "fact" are actually pure opinion, or, as I've shown, incorrect fact.
Guess you skimmed right over the "most" part. Par for the course.
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Old 01-28-2012, 09:16 AM   #1103
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Guess you skimmed right over the "most" part. Par for the course.
Has Sony died yet today?

I am sure any minute now they will go belly up....

That's been your "par for the course" prediction for like 5 years now. Ever get tired being sooooooo wrong?
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Old 01-28-2012, 09:19 AM   #1104
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Has Sony died yet today?

I am sure any minute now they will go belly up....
Are you going to bother sticking to the topic or continue baiting posters?

Actually, it's probably best I just put you on ignore. Your simply a sock account anyway.

Bye!
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Old 01-28-2012, 10:56 AM   #1105
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It's possible the DVD top 20 revenue could be as high as 40% of its total, but that would make Blu-ray 85% instead of 67%. I would think the Blu-ray T20 revenue is less than 85% of its total. 85% would mean the format has no tail, that it's just a new release format and the other titles practically wither on the vine.

Here's what we know for 2011 averages:

Blu-ray overall share: 24%

Blu-ray top 20 share: 40% (approximate. revenue share is probably a few percent higher, while unit percentage a few percent lower)

DVD average revenue: $130 million

Blu-ray average revenue: $41 million

So, if we 'fix' the top 20 average revenue for one format, we can calculate for the other. Let's 'fix' (estimate) Blu-ray at 85% of its total.

85% of $41 million is $34.9 million. That's would be the top 20 Blu-ray revenue. Everything else is the remainder, or, $6.1 million.

Now, since Blu-ray's top 20 share is 40% (give or take a few percent), the DVD top 20 revenue is therefore $34.9 * (60%/40%) = $52.3 million.

That makes the DVD top 20 share $52.3 / $131 = 40.0%. It's all mathematical. Just plug in a guess for one variable and out pops the result for the other.

Just for kicks, let's make Blu-ray's top 20 at 100%, so that anything under the top 20 sells zero.

DVD's top 20 revenue would be (assuming a 40% top 20 BD share) $41 * 1.5 = $61.5 million / $131 million = 46.9%. So even with Blu-ray being completely a new release format, and having useless catalog value, DVD new release is still under 47% of its total.

That's as high as it can mathematically be, but done by sucking all the life out of the below T20 Blu-ray.

Another point worth noting, is that it's likely the average Blu-ray top 20 revenue share is even higher than the 'conservative' 40% estimate I have given (calculated using the average of the Nielsen First Alert data), so if anything the results favor DVD top 20 having an even lower percentage than derived above.

Another side note: if Blu-ray T20 was 85% of its total, then that remaining $6.1 million revenue would be compared to the $78.7 million DVD revenue that resides below the top 20. That would make the below T20 Blu-ray share a mere 7.7%. Not a very healthy "catalog" percentage for a format over five years into its life cycle.

Kosty, what would be your estimate of the Blu-ray T20 revenue share of its total Kosty? Would it be more, or less than 85%?
Wow! Great analysis!

So do you think the shift we have seen in the last 2 (DVD decline slower than 2011 and BD growth about half of 2011) is due to a shift in percentages for new titles, or because DVD is seeing a 5th quarter effect with catalogs that BD is not benefiting from?
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Old 01-28-2012, 05:16 PM   #1106
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Wow! Great analysis!

So do you think the shift we have seen in the last 2 (DVD decline slower than 2011 and BD growth about half of 2011) is due to a shift in percentages for new titles, or because DVD is seeing a 5th quarter effect with catalogs that BD is not benefiting from?
Thanks Psound.

I'm not sure why DVD had a better deviation from average than Blu-ray these first two weeks. It would seem that the 5th quarter effect favored DVD. Tower said that one component of that effect is cashing in gift cards, so perhaps those redemptions were skewed towards DVD.

I also wonder if people returning Blu-rays to get the DVD had any effect. A common mistake in the haste of buying gifts would be to buy the wrong format.

The Nielsen ratios for Blu-ray top 20 look normal for those two weeks, so I'm inclined to think it's other factors, such as those mentioned above.
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Old 01-28-2012, 05:19 PM   #1107
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It's possible the DVD top 20 revenue could be as high as 40% of its total, but that would make Blu-ray 85% instead of 67%. I would think the Blu-ray T20 revenue is less than 85% of its total. 85% would mean the format has no tail, that it's just a new release format and the other titles practically wither on the vine.

Here's what we know for 2011 averages:

Blu-ray overall share: 24%

Blu-ray top 20 share: 40% (approximate. revenue share is probably a few percent higher, while unit percentage a few percent lower)

DVD average revenue: $130 million

Blu-ray average revenue: $41 million

So, if we 'fix' the top 20 average revenue for one format, we can calculate for the other. Let's 'fix' (estimate) Blu-ray at 85% of its total.

85% of $41 million is $34.9 million. That's would be the top 20 Blu-ray revenue. Everything else is the remainder, or, $6.1 million.

Now, since Blu-ray's top 20 share is 40% (give or take a few percent), the DVD top 20 revenue is therefore $34.9 * (60%/40%) = $52.3 million.

That makes the DVD top 20 share $52.3 / $131 = 40.0%. It's all mathematical. Just plug in a guess for one variable and out pops the result for the other.

Just for kicks, let's make Blu-ray's top 20 at 100%, so that anything under the top 20 sells zero.

DVD's top 20 revenue would be (assuming a 40% top 20 BD share) $41 * 1.5 = $61.5 million / $131 million = 46.9%. So even with Blu-ray being completely a new release format, and having useless catalog value, DVD new release is still under 47% of its total.

That's as high as it can mathematically be, but done by sucking all the life out of the below T20 Blu-ray.

Another point worth noting, is that it's likely the average Blu-ray top 20 revenue share is even higher than the 'conservative' 40% estimate I have given (calculated using the average of the Nielsen First Alert data), so if anything the results favor DVD top 20 having an even lower percentage than derived above.

Another side note: if Blu-ray T20 was 85% of its total, then that remaining $6.1 million revenue would be compared to the $78.7 million DVD revenue that resides below the top 20. That would make the below T20 Blu-ray share a mere 7.7%. Not a very healthy "catalog" percentage for a format over five years into its life cycle.

Kosty, what would be your estimate of the Blu-ray T20 revenue share of its total Kosty? Would it be more, or less than 85%?
I'm asking to get some more recent information from some of my sources.

One of the issues I see in your analysis here is the issue between unit marketshare and revenue marketshare for both T20 and T50 recent releases and new weekly releases. For example the revenue marketshare for new releases on Blu-ray is much higher than the unit marketshare as Blu-ray is generally 25% to 33% higher per unit sold than a matching DVD sku.

For Blu-ray, before the 4Q I was told by several industry sources that Blu-ray recent releases (akin to top 20 sales) were around 60% of total Blu-ray unit sales and around 80% of revenues as Blu-ray recent releases also had a much higher price point especially when BD+DVD combo sales were considered.

We have now weekly unit sales information and I have now the unit sales for the 2010 and 2011 and TYD 2012 period from HMM for DVD and Blu-ray. We have already the HMM revenue estimates for 2010 and 2011 and YTD 2012.

We do have the The-Numbers Top 30 DVD revenue and unit estimates as well going back to 2006. We have there Blu-ray top 10 estimates going back to May of 2011 as well. Even if flawed and different in methodology and assumptions a comparison between the two gives us a starting point for some estimates and order of magnitude for the split.

On factor that I did not consider until you brought the subject up recently here is the effect the growing success and growing new release marketshare of Blu-ray new release units and revenues would have on the proportion of DVD sales that are new release related versus DVD catalog sales. As Blu-ray gains more and more in new release marketshare the proportion of DVD sales that are new releases will continue to decline and the portion that are catalog sales will increase.

My guess at this time is that Blu-ray new release sales Top 30 titles are generating about 50% to 60% and 70% to 80% of Blu-ray revenues.

When we get some 2012 weeks without any new releases in them and we can see what the routine base rate of Blu-ray and DVD sales are on those weeks we can get a better idea of what the routine BD sales are now in 2012.

I'll have to meditate a bit on the rest of your analysis there to see what I think of it, but my immediate thoughts are that its overestimating the revenues for catalog sales to a substantial degree. I'll look at in more in detail to see where I disagree with your assumptions and at the moment I think I follow your logic but somewhere along the line some of the assumptions bias it toward catalog revenues and away from new release revenues.
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Old 01-28-2012, 05:23 PM   #1108
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That's right. Catalog is the backbone of any healthy format. Depending on new releases is like living paycheck to paycheck.
Blu-ray catalog sales will grow over time as the Blu-ray user base grows and as Blu-ray titles displace DVD titles on retail shelves.

Most of the revenues and profits and higher margins for units sold are from newer releases so its also very important that Blu-ray has been successful in capturing a large percentage of newer release sales.
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Old 01-28-2012, 05:29 PM   #1109
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Do we have the unit numbers for those weeks?
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Old 01-28-2012, 05:34 PM   #1110
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Do we have the unit numbers for those weeks?
BD sales - ending 1/15

http://www.the-numbers.com/weekly-bluray-sales-chart


DVD sales - ending 1/15

http://www.the-numbers.com/dvd/chart...y/thisweek.php
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