View Single Post
Old 03-02-2012, 02:01 PM   #1735  
Kosty
Home Theater Enthusiast
 
Kosty's Avatar
 

Join Date: Aug 2007
Posts: 5,063
Default

Quote:
Originally Posted by chipvideo View Post
OD sellthrough is like money printing machine. The actually physical product is dirt cheap. Its basically almost like Royalty revenue. The costs stay the same and the revenue pretty much all goes directly to the bottom line. This is why the decline in OD is hurting the studios more than they are telling. This is why they have been laying off so many people and having 28 day rental windows and why Warner increased that window to 56 days. It shows how desperate they are in.

It can't be denied, the rapid fall in OD sales is taking a HUGE toll on Hollywood. They want to hide that and SELL everyone a story that Blu-ray is doing well, when we have showed over the years it is not.
Blu-ray is doing best with new releases where the more concentrated profits and highest margins are. Much of the top line DVD and OD revenue decline is in the lowest margin catalog DVD sales segment. That's why the studios and retailers are in no hurry to abandon DVD and want to encourage Blu-ray usage for as long as possible as even in decline packaged media sales still are huge and profitable.

But of course overall revenue decline is still a concern as revenue streams like cheap rentals are nowhere near as profitable to the studios.

New release physical sell through is the most lucrative margins besides EST at high price points which has far lesser volumes.

In general, Blu-ray 3D+DVD+UV combos have the highest margins of any physical home video product beside lower volume collector editions, then BD+UV combos, then Blu-ray new releases, DVD collector editions, DVD new releases, Blu-ray catalog titles, then older DVD releases.

=================
EDIT:

The highest margins of all home video skus are in the limited edition collectors editions for Blu-ray and then DVD. But those are relatively limited runs and gross revenues. Multiple movie box sets and TV on Blu-ray and DVD box sets are also very high margin. All of those are pretty much subsets of the categories above in more general terms.
================


EST prices generally have been in the past so high that they have had low much lower volumes than physical sell through and the studios need to adjust that for greater volumes along with selecting price points for UV.

Blu-ray has been most successful in new releases where the highest margins for physical sell through remain along with the largest volumes on a per title basis. Blu-ray's success with new releases and its increasing marketshare has also resulted in a steady improvement over the past two years in the average disc cost sold for new releases to have actually increased since 4Q 2010. Consumers still buying new releases have increasingly migrated from plain DVD new release skus to more expensive and more profitable Blu-ray+DVD+DC combos and have not seemed to have discouraged by the average $5-$7 higher retail price points for the combos.

Increasingly over the past year more and more consumers buying new or recent releases have started buying the even more premium priced Blu-ray 3D combos at even greater retail price and higher margins as well.

From last week's Nielsen Videoscan first alert data:

full weekly graph set here



















Last edited by Kosty; 03-02-2012 at 10:56 PM..
Kosty is offline   Reply With Quote