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The Story of 2012 - DVD Sell Through Revenue

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Old 04-07-2012, 11:00 AM   #1
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Default The Story of 2012 - DVD Sell Through Revenue

It has been amazing this year to watch DVD sell through revenue break it's former steep decline trend. Indeed, it is really the only trend so far in 2012 that has broken significantly from expectations.

The resiliency of DVD is certainly amazing, especially when it has been obsoleted by Blu-ray technology.
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Old 04-07-2012, 11:28 AM   #2
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It is amazing. Doing much better than can be expected and it's evidenced by seeing it's market share actually increase from 73.0% in Q4 2011 to 76.1% this quarter (with only one week to go).

The norm last year was DVD declining 20% and Blu-ray increasing 20%. This year it's DVD declining only 5.5% and Blu-ray increasing 27.8%.

To put that in perspective, one can calculate the deviation from the 2011 "norm" in terms of revenue change. If DVD was 20% down, per the 2011 norm, then its revenue would be $216 million lower so far this year. Blu-ray, by the same token, would be $27 million lower.

So in effect DVD is contributing 89% of the OD improvement and thus is 89% responsible for OD actually being up this year.
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Old 04-07-2012, 11:37 AM   #3
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It is amazing. Doing much better than can be expected and it's evidenced by seeing it's market share actually increase from 73.0% in Q4 2011 to 76.1% this quarter (with only one week to go).

The norm last year was DVD declining 20% and Blu-ray increasing 20%. This year it's DVD declining only 5.5% and Blu-ray increasing 27.8%.

To put that in perspective, one can calculate the deviation from the 2011 "norm" in terms of revenue change. If DVD was 20% down, per the 2011 norm, then its revenue would be $216 million lower so far this year. Blu-ray, by the same token, would be $27 million lower.

So in effect DVD is contributing 89% of the OD improvement and thus is 89% responsible for OD actually being up this year.
Exactly! And it is truly unexpected. I don't know of anyone who was thinking that DVD would be the cause of such massive improvement in OD sell through numbers. And yet that is exactly what is occurring. Blu-ray is pretty much doing exactly as expected with the increase of BO strength (a leading metric that Blu-ray is highly sensitive to).


Even with DVD being obsoleted by Blu-ray.
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Old 04-07-2012, 02:29 PM   #4
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Exactly! And it is truly unexpected. I don't know of anyone who was thinking that DVD would be the cause of such massive improvement in OD sell through numbers. And yet that is exactly what is occurring. Blu-ray is pretty much doing exactly as expected with the increase of BO strength (a leading metric that Blu-ray is highly sensitive to).


Even with DVD being obsoleted by Blu-ray.
Of course, one has to keep in mind that box office lead-in is up 22.2%, which is the main reason for the improvement. It would appear that this year will be better than last as far as that it concerned, but obviously 22% is not sustainable.
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Old 04-07-2012, 03:11 PM   #5
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Of course, one has to keep in mind that box office lead-in is up 22.2%, which is the main reason for the improvement. It would appear that this year will be better than last as far as that it concerned, but obviously 22% is not sustainable.
It is acknowledging the unsustainable BO lead-in that I say BD is right about where it is expected.

I fully expect BD YoY % to decline as OD normalizes, and the special 2011 patterns (Star Wars catalog being a big one) get accounted into the YTD metric.

That said, DVD is still performing unexpected and exceptionally well even with BO strength.
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Old 04-07-2012, 03:36 PM   #6
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It is acknowledging the unsustainable BO lead-in that I say BD is right about where it is expected.

I fully expect BD YoY % to decline as OD normalizes, and the special 2011 patterns (Star Wars catalog being a big one) get accounted into the YTD metric.

That said, DVD is still performing unexpected and exceptionally well even with BO strength.
Especially considering that it's not nearly as dependent on BO strength as Blu-ray is. One can certainly argue that Blu-ray sales are disappointing considering the BO lead-in.

And there is no Star Wars effect this year. That release alone probably did about 75-80% of the revenue that Avatar did through the first month of sales(selling about 1/5 the copies but at 4x the price).

Last year catalog releases were way up across the board, but this year so far they are down from last year.
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Old 04-07-2012, 04:26 PM   #7
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Especially considering that it's not nearly as dependent on BO strength as Blu-ray is. One can certainly argue that Blu-ray sales are disappointing considering the BO lead-in.

And there is no Star Wars effect this year. That release alone probably did about 75-80% of the revenue that Avatar did through the first month of sales(selling about 1/5 the copies but at 4x the price).

Last year catalog releases were way up across the board, but this year so far they are down from last year.
Yep. I expect BD to drop quite a bit (YoY) by the end of Q3 (assuming a Q4 Hunger Games release).

The trio of Avengers, Dark Knight and Hunger Games should help Blu-ray this year, but probably not enough to get it above 20% growth for the year. Nothing too exciting there.


Again, the story of the year is DVDs performance. Without it's relative strength, this year would be pretty much looking just like last year.
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Old 04-07-2012, 05:03 PM   #8
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Exactly! And it is truly unexpected. I don't know of anyone who was thinking that DVD would be the cause of such massive improvement in OD sell through numbers. And yet that is exactly what is occurring. Blu-ray is pretty much doing exactly as expected with the increase of BO strength (a leading metric that Blu-ray is highly sensitive to).


Even with DVD being obsoleted by Blu-ray.
There was Twilight Saga release in 1Q 2012 that is significantly helping DVD revenues and thus OD revenues for this quarter.
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Old 04-07-2012, 05:10 PM   #9
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Yep. I expect BD to drop quite a bit (YoY) by the end of Q3 (assuming a Q4 Hunger Games release).

The trio of Avengers, Dark Knight and Hunger Games should help Blu-ray this year, but probably not enough to get it above 20% growth for the year. Nothing too exciting there.


Again, the story of the year is DVDs performance. Without it's relative strength, this year would be pretty much looking just like last year.
Not quite. DVD is doing much better but Blu-ray is also better too as well.

At this point at week 12, Blu-ray last year was +8.09% up in the cumulative YoY stats. This year Blu-ray is +27.60% YoY up in the same metric.

That's certainly not "pretty much looking just like last year."







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Old 04-07-2012, 05:18 PM   #10
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It is acknowledging the unsustainable BO lead-in that I say BD is right about where it is expected.

I fully expect BD YoY % to decline as OD normalizes, and the special 2011 patterns (Star Wars catalog being a big one) get accounted into the YTD metric.

That said, DVD is still performing unexpected and exceptionally well even with BO strength.
The slower the DVD attrition the less Blu-ray has to cover and make up.

Blu-ray will in all probability have a decrease in the YoY metric for the next couple weeks until Mission Impossible Ghost Protocol hits home video but its still well above last year's pace and there is no Avatar and Alice in Wonderland to compare with to destroy the YoY comparisons.

Until mid September there is not a lot of 2011 strength to depress the metrics significantly once we get past the next 4 weeks of comparisons.

There will be a few new to Blu-ray catalog titles that should fill in somewhat the new to Blu-ray Star Wars slots this year, including Indiana Jones and Titanic.

Plus this year will have Hunger Games and the theatrical release in November of the final chapter of Twilight Saga which may have a halo effect on the Blu-ray sales of the previous releases.

Nothing is set in stone about the box office dropping off its pace substantially either as well but of course as usual much depends on the strength and performance of the summer releases.
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Old 04-07-2012, 05:28 PM   #11
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Of course, one has to keep in mind that box office lead-in is up 22.2%, which is the main reason for the improvement. It would appear that this year will be better than last as far as that it concerned, but obviously 22% is not sustainable.
A lot of that 22% or the $425 M or so TBO increase is in the Twilight Saga release this 1Q 2012 which alone had a $281 domestic box office.

That greatly affected the DVD numbers and Blu-ray as well and had no matching type release in 1Q 2011.

Because of the unique nature of that title its probable that that TBO and its affect on home video is not sustainable at that level. But so far this year the theatrical box office is well up and those titles are already filling up the que for 2Q 2012 releases. So by the end of 1H 2012 its likely the TBO will still be up.
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Old 04-07-2012, 05:34 PM   #12
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Originally Posted by bruceames View Post
It is amazing. Doing much better than can be expected and it's evidenced by seeing it's market share actually increase from 73.0% in Q4 2011 to 76.1% this quarter (with only one week to go).

The norm last year was DVD declining 20% and Blu-ray increasing 20%. This year it's DVD declining only 5.5% and Blu-ray increasing 27.8%.

To put that in perspective, one can calculate the deviation from the 2011 "norm" in terms of revenue change. If DVD was 20% down, per the 2011 norm, then its revenue would be $216 million lower so far this year. Blu-ray, by the same token, would be $27 million lower.

So in effect DVD is contributing 89% of the OD improvement and thus is 89% responsible for OD actually being up this year.
Not really that unusual for the 1Q Blu-ray revenue marketshare to decline from the previous 4Q holiday season. It happened last year as well and was flat the year before. The 4Q generally have more favorable genres for release and better performing high volume summer releases which tend to do well on Blu-ray.

The magnitude of the DVD sales of Twilight Saga: Breaking Dawn Part I are the driving force in the DVD sales improvement so far this year.

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Old 04-07-2012, 05:50 PM   #13
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A lot of that 22% or the $425 M or so TBO increase is in the Twilight Saga release this 1Q 2012 which alone had a $281 domestic box office.

That greatly affected the DVD numbers and Blu-ray as well and had no matching type release in 1Q 2011.

Because of the unique nature of that title its probable that that TBO and its affect on home video is not sustainable at that level. But so far this year the theatrical box office is well up and those titles are already filling up the que for 2Q 2012 releases. So by the end of 1H 2012 its likely the TBO will still be up.
The latest matching figures (week ending 3/4) for Twilight from The-Numbers shows the DVD selling $82 million and the BD $33 million. Allowing for what you believe to be a 10% fudge factor that makes it $74 DVD and $30 million BD.

Removing Twilight by taking those figures off the top gives DVD up 10.4% and Blu-ray up 19.3%. Per the -20% DVD and +20% BD 2011 norms, DVD is still contributing $142 more than the expected amount and Blu-ray actually doing $3 million worse.

Thank God Twilight happened for Blu-ray. It would be trending downwards without it, even with box office still up 7% without it.

DVD however would still be doing significantly better.
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Old 04-07-2012, 05:52 PM   #14
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There was Twilight Saga release in 1Q 2012 that is significantly helping DVD revenues and thus OD revenues for this quarter.
Twilight is just one of many movies released in the quarter. Must you mention it in every post? We know box office is up 22%. Twilight is a part of that. It is NOT Twilight + box office up 22%.
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Old 04-07-2012, 05:57 PM   #15
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Not quite. DVD is doing much better but Blu-ray is also better too as well.

At this point at week 12, Blu-ray last year was +8.09% up in the cumulative YoY stats. This year Blu-ray is +27.60% YoY up in the same metric.

That's certainly not "pretty much looking just like last year."
You're right. When accounting for BO lead-in, the 8.09% last year was more impressive because at that point BO was -24.2% for the year. So it's actually worse this year for Blu-ray, when you take the time to look "under the hood".
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