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Blu-ray Disc Movie Sales Top 9 Million

Razor05
03-28-2008, 10:41 AM
As per TeamXbox:

Blu-ray Disc Movie Sales Top 9 Million
By: CÚsar A. Berardini - "Cesar"
Mar. 28th, 2008 9:23 am

Following Toshiba's abdication in the next-gen optical disc war and the release of "No Country for Old Men," U.S. sales of Blu-ray Disc movie titles have topped nine million since the format launched over a year and a half ago, with 3 million movies sold in the first 11 weeks of 2008.

anythingwt
03-28-2008, 10:45 AM
Impressive, but doesn't this put the attach rate at less than 1 movie per BD player if you're including PS3s?

mobiushky
03-28-2008, 10:52 AM
Impressive, but doesn't this put the attach rate at less than 1 movie per BD player if you're including PS3s?

Only if you assume that every PS3 sold in the entire world was sold in the US. Or if you assume that Only BD movies sold in the US count as being sold in the world...

You are mixing units sold.

If there are 9 million BD movies sold in the US, then those movies were purchased by the roughly 3.5 million PS3 and SAL BD owners in the US. That puts attach rates around 2.5 (give or take).

If you are assuming that you are going to talk PS3's sold globally which is a little more than 10 million, then you have to use global BD movies sold.

You can't say that all of the PS3's sold in the world only buy their BD's in the US.

dobyblue
03-28-2008, 11:03 AM
Sales for the week ending March 23rd are 88:12

Looks like the HD DVD liquidation sales are tapering off.

crazyal
03-28-2008, 11:08 AM
Acording to VGchartz there's about 4.4m PS3s sold in the states and you could bump that number up to 5m when you add in SA players (I'm probably low). That would give you an attach rate of less than 2.

anythingwt
03-28-2008, 11:10 AM
Only if you assume that every PS3 sold in the entire world was sold in the US. Or if you assume that Only BD movies sold in the US count as being sold in the world...

You are mixing units sold.

If there are 9 million BD movies sold in the US, then those movies were purchased by the roughly 3.5 million PS3 and SAL BD owners in the US. That puts attach rates around 2.5 (give or take).

If you are assuming that you are going to talk PS3's sold globally which is a little more than 10 million, then you have to use global BD movies sold.

You can't say that all of the PS3's sold in the world only buy their BD's in the US.


Ahh gotcha. I missed that very important part, "US sales" 2.5 per player is actually real good considering there are probably a lot of PS3s out there used strictly for gaming. I'm sure people like us on the forums who buy a hundred movies a piece help the numbers just a tad bit too haha

HD Goofnut
03-28-2008, 11:45 AM
Let us also not forget that HD DVD had an attach rate of nearly 5 movies per player.

kamspy
03-28-2008, 11:48 AM
Let us also not forget that HD DVD had an attach rate of nearly 5 movies per player.

We saw how well that worked out. Studio sell movies, not hardware.

mobiushky
03-28-2008, 11:50 AM
Ahh gotcha. I missed that very important part, "US sales" 2.5 per player is actually real good considering there are probably a lot of PS3s out there used strictly for gaming. I'm sure people like us on the forums who buy a hundred movies a piece help the numbers just a tad bit too haha

I went through a thought process a month ago regarding how many PS3's (of the 3 mill or so) actually buy movies. I came up with a rough estimate of around half. It's not an educated guess or anything, just a logical conclusion based on some of the numbers of players sold, movies sold, number of PS3's connected to HDtv's etc, etc. But I'm not saying I'm right, just a thought process.

As for the hundreds of movies, yeah, you probably make up for the guys who don't buy any... LOL!!

crazyal
03-28-2008, 11:52 AM
Actually studios are in it for the money. If they could make it without selling or doing a thing that's the path they will take. That's what decided this war not attach rates, prices of players, support of CEMs, just who took the free money.

HD Goofnut
03-28-2008, 11:53 AM
I went through a thought process a month ago regarding how many PS3's (of the 3 mill or so) actually buy movies. I came up with a rough estimate of around half. It's not an educated guess or anything, just a logical conclusion based on some of the numbers of players sold, movies sold, number of PS3's connected to HDtv's etc, etc. But I'm not saying I'm right, just a thought process.

As for the hundreds of movies, yeah, you probably make up for the guys who don't buy any... LOL!!

The latest surveys in the last few months say anywhere from 45-55% of PS3 owners don't even own an HDTV. So I would think around half would be a decent guess concerning movies purchased.

mobiushky
03-28-2008, 11:57 AM
We saw how well that worked out. Studio sell movies, not hardware.

Actually I think the widely reported attach rate was more like 3.5 for HD-DVD.

mobiushky
03-28-2008, 11:58 AM
The latest surveys in the last few months say anywhere from 45-55% of PS3 owners don't even own an HDTV. So I would think around half would be a decent guess concerning movies purchased.

No, the latest survey shows that 71% of PS3 owners have their PS3's attached to an HDtv. It was the highest percentage of any gaming consoles with the Xbox in the mid 60's. According to Nielsen last December.

http://www.engadgethd.com/2007/12/20/ps3-owners-most-connected-to-hdtv-xbox-360-wii-not-far-behind/

crazyal
03-28-2008, 12:01 PM
I went through a thought process a month ago regarding how many PS3's (of the 3 mill or so) actually buy movies. I came up with a rough estimate of around half. It's not an educated guess or anything, just a logical conclusion based on some of the numbers of players sold, movies sold, number of PS3's connected to HDtv's etc, etc. But I'm not saying I'm right, just a thought process.

As for the hundreds of movies, yeah, you probably make up for the guys who don't buy any... LOL!!

4,378,813 PS3s sold in the US as of March 22nd. You're about 50% low.

mobiushky
03-28-2008, 12:05 PM
4,378,813 PS3s sold in the US as of March 22nd. You're about 50% low.

I did that back in January based on BDA's announcement at CES that there were 3 mill PS3's sold in the US. I had no info regarding how many had sold since then.

anythingwt
03-28-2008, 12:05 PM
I went through a thought process a month ago regarding how many PS3's (of the 3 mill or so) actually buy movies. I came up with a rough estimate of around half. It's not an educated guess or anything, just a logical conclusion based on some of the numbers of players sold, movies sold, number of PS3's connected to HDtv's etc, etc. But I'm not saying I'm right, just a thought process.

As for the hundreds of movies, yeah, you probably make up for the guys who don't buy any... LOL!!

Your estimate of about half the PS3s being used as BD players is likely accurate. My logic is coming from how many of them must have been bought as gift for "kids." Kids don't care about movies, they want the PS3 to play games, to race, kill monsters, and blow stuff up. The fact that they have a high def movie player means nothing to a kid. They are probably just as content with a VCR for movies.

mobiushky
03-28-2008, 12:10 PM
Your estimate of about half the PS3s being used as BD players is likely accurate. My logic is coming from how many of them must have been bought as gift for "kids." Kids don't care about movies, they want the PS3 to play games, to race, kill monsters, and blow stuff up. The fact that they have a high def movie player means nothing to a kid. They are probably just as content with a VCR for movies.

All in all, you are probably right on. My kids love the BD movies, but they are more than happy with their 27" CRT upstairs with DVD. They don't like VHS anymore, but not because of quaility. They hate the rewinding and fast forwarding. LOL! Such lazy children.

BobY
03-28-2008, 11:45 PM
I don't think there is any way that half the PS3's in the US are being used for BD on a regular basis.

The "9 Million discs sold" number sounds impressive, but you need to realize that's spread over 490 different BD titles, which means on average they are selling less than 20,000 discs per title. Obviously there are a few titles selling far more than that, but that just means the typical BD title is selling much less than 20,000 discs.

Statistically speaking, it's highly unlikely there are hundreds of separate 20,000-member groups each buying a different title. It's rather more likely that there is a small group which buys BD's on a regular basis (i.e. many different titles) and a much larger group that buys BD's very infrequently (i.e. only the big hits).

One has to take into account that many individual DVD titles sell over 9 million units for that one title alone and that each individual BD title has production/marketing/sales costs that don't even come close to being covered by sales of 20,000 units.

Stew4HD
03-29-2008, 04:10 AM
I don't think there is any way that half the PS3's in the US are being used for BD on a regular basis.

The "9 Million discs sold" number sounds impressive, but you need to realize that's spread over 490 different BD titles, which means on average they are selling less than 20,000 discs per title. Obviously there are a few titles selling far more than that, but that just means the typical BD title is selling much less than 20,000 discs.

Statistically speaking, it's highly unlikely there are hundreds of separate 20,000-member groups each buying a different title. It's rather more likely that there is a small group which buys BD's on a regular basis (i.e. many different titles) and a much larger group that buys BD's very infrequently (i.e. only the big hits).

One has to take into account that many individual DVD titles sell over 9 million units for that one title alone and that each individual BD title has production/marketing/sales costs that don't even come close to being covered by sales of 20,000 units.

Isn't that "9 million" units sold SI? If so, that is less than one per player. And to think the BD group is touting that it now claims a whopping 1% of the market and that is a success? Maybe I am not seeing the numbers correctly :what:

... flame on

MikeRox
03-29-2008, 07:15 AM
I don't think there is any way that half the PS3's in the US are being used for BD on a regular basis.

The "9 Million discs sold" number sounds impressive, but you need to realize that's spread over 490 different BD titles, which means on average they are selling less than 20,000 discs per title. Obviously there are a few titles selling far more than that, but that just means the typical BD title is selling much less than 20,000 discs.

Statistically speaking, it's highly unlikely there are hundreds of separate 20,000-member groups each buying a different title. It's rather more likely that there is a small group which buys BD's on a regular basis (i.e. many different titles) and a much larger group that buys BD's very infrequently (i.e. only the big hits).

One has to take into account that many individual DVD titles sell over 9 million units for that one title alone and that each individual BD title has production/marketing/sales costs that don't even come close to being covered by sales of 20,000 units.

Well you've got several 100,000+ sellers on Blu-ray (at least 10) which when added together bring the total for the remaining 490 titles down to 8 million, and thats before taking into account another 2 million+ are probably accounted for purely by the 50+,000 sellers.

Chris Gerhard
03-29-2008, 07:27 AM
I went through a thought process a month ago regarding how many PS3's (of the 3 mill or so) actually buy movies. I came up with a rough estimate of around half. It's not an educated guess or anything, just a logical conclusion based on some of the numbers of players sold, movies sold, number of PS3's connected to HDtv's etc, etc. But I'm not saying I'm right, just a thought process.

As for the hundreds of movies, yeah, you probably make up for the guys who don't buy any... LOL!!

I have seen estimates that about 40% of PS3 owners use the PS3 for Blu-ray playback, but only about 20% use it primarily for Blu-ray playback and I accept that as a good estimate up to this point. Who knows and who cares? The PS3 won the format war even though owners don't buy many discs yet on average. A hardware base of 12 million beats a hardware base of 1 million even if only 5 million of the 12 million buy discs. A significant percentage of the other 7 million are likely to start buying discs in my opinion and that is market potential. A format that almost nobody owns, like HD DVD, had no potential.

Chris

BobY
03-29-2008, 11:14 AM
Hey Chris,

I'm off the HD DVD kick, how 'bout you?

HD DVD is dead and will soon be gone, so there is no point in talking about it.

There is a point in talking about what Blu-Ray needs to do to survive and pretending it's doing well in sales is not going to help. Determining why there are so few BD player owners buying BD discs on a regular basis is something that needs to be understood and corrected.

It doesn't matter if BD sells 20 milion discs a year if they are only selling 20,000 copies per title--studios can't make any money doing that and will pull out if it doesn't change. The fallback position will be to only release sure-fire hits that are pretty much guaranteed to sell hundreds of thousands of copies (which means newer films aimed at the PS3 gamer demographic).

I think a realistic figure for the number of US PS3 owners currently buying any BD discs is whatever the average US unit sales is of the top selling discs--say, what, about 300,000? (I'm not certain what the average of the top selling discs are, as the unit sales info is rarely published for obvious reasons). Again it's not likely several different groups of 300,000 are all buying different titles, rather it's the same group of 300,000 buying multiple titles. That would be about 7% of US PS3 owners buying BD discs at all--let's say 10% to be generous.

If we go with the average of about 20,000 BD player owners buying BD discs on a regular basis, that's about 0.5% of US PS3 owners.

Also pretending that BD is doing as well or better than DVD in the same period of it's life is ridiculous. Yes, there are even more BD players in consumers' hands at the same point in life, but that is due strictly to the PS3. As far as disc sales--don't even mention it! BD: 9 Million discs sold in the US after 22 months, DVD: over 42 Million discs sold in North America after 22 months:

http://www.dvdinformation.com/industryData/index.cfm

It should be a bit sobering to realize that there were 3 Million BD movies sold in the first 11 weeks of 2008 (BTW, DVD had sold nearly 11 Million discs in the same time of it's life). That's about 270,000 discs a week, which is the number of DVD's that can be produced in one single week on one single DVD production line.

While I understand the spin to try and convince consumers that BD is the hottest thing and they need to own it, I hope the BDA isn't falling for their own propaganda...

PFC5
03-29-2008, 03:01 PM
Good fact based post BobY as usual. I agree with Chris G. that probably 40% of PS3 owners buy BD movies, but I doubt those 40% buy them regularly at this point. I would GUESS that somewhere about 10% buy them regularly, but that % might diminish over time as more people buy the PS3 for the game console portion of it's abilities as more games get released.

The only chance I think that BD has to get to really be any substantial competition to SD DVD, is if the studios start releasing every d/d release on BD AND start increasing the catalog titles for the big name cat. titles.

Either that or the studios would have to shoot themselves in the foot by giving release date priority to BD releases and delaying the SD DVD release of new movies to 1-2 weeks later than the BD release. At this point I DO believe this would be shooting themselves in the foot though and they will not do this.

It is the studios that control what becomes of BD and the only thing the CE companies can do is lower BD player prices enough to drastically increase the number of BD players in homes.

Time will tell how this all plays out now. I am waiting to see without making a final decision of where BD will be in 2-3 years.

Neoworld
03-29-2008, 04:27 PM
Blu-Ray is on its way. I already have 91 Blu-Ray discs and growing.

crazyal
03-29-2008, 04:54 PM
Blu-Ray is on its way. I already have 91 Blu-Ray discs and growing.

Welcome to HDF. I agree it's on it's way. Usually what we disagree on around here is what it should do to promote it's take off. While people like you buying into the format, 91 titles and counting there's a larger number of people who don't have more than 1 movie. The real question is not how to get you to buy more but how to get them to buy more. Anyway continue to jump in and offer your opinions.

Jimmy Smith
03-29-2008, 07:04 PM
Also pretending that BD is doing as well or better than DVD in the same period of it's life is ridiculous. Yes, there are even more BD players in consumers' hands at the same point in life, but that is due strictly to the PS3. As far as disc sales--don't even mention it! BD: 9 Million discs sold in the US after 22 months, DVD: over 42 Million discs sold in North America after 22 months:

True but the difference is DVD came into the market unopposed. Other then the obvious abomination DIVX there really were no formats to oppose early DVDs growth. DVD was a clear and obvious step above both VHS and laserdisc in every possible way. Blu-Ray on the other hand just got through a long and bloody format war with a mostly similar format. Now that the format war is over and Blu-Ray is unopposed and with 100% studio support, full profile features, and the Playstation 3 cheaper then ever it will now experiance the growth it could have had since the beginning if not for this messy format war.

BobY
03-29-2008, 08:54 PM
Good fact based post BobY as usual. I agree with Chris G. that probably 40% of PS3 owners buy BD movies, but I doubt those 40% buy them regularly at this point. I would GUESS that somewhere about 10% buy them regularly, but that % might diminish over time as more people buy the PS3 for the game console portion of it's abilities as more games get released.

The only chance I think that BD has to get to really be any substantial competition to SD DVD, is if the studios start releasing every d/d release on BD AND start increasing the catalog titles for the big name cat. titles.

Either that or the studios would have to shoot themselves in the foot by giving release date priority to BD releases and delaying the SD DVD release of new movies to 1-2 weeks later than the BD release. At this point I DO believe this would be shooting themselves in the foot though and they will not do this.

It is the studios that control what becomes of BD and the only thing the CE companies can do is lower BD player prices enough to drastically increase the number of BD players in homes.

Time will tell how this all plays out now. I am waiting to see without making a final decision of where BD will be in 2-3 years.

Not to be argumentative (especially with you, PFC5), but what do you base the 40% figure on? 40% of US PS3 sales is about 1.76 million units--what BD disc has sold 1.76 Million units in the US? 1 Million units? 500,000 units? The numbers just don't work. You have to assume that there's a group of several hundred thousand who buy one title, then another group of several hundred thousand who buy another title, but not the title the first group bought, and so on.

That is extremely unlikely. It is much more likely it's the same group of several hundred thousand who are buying pretty much all of the titles that sell in the hundreds of thousands of units. That says there are really only several hundred thousand people buying Blu-Ray discs. Now given that there are only a handful of BD titles that sell in those kinds of quantities, that means the remaining discs sales (the vast majority of titles) are very low for each title.

It would only take about 500,000 people buying 18 discs to get to the 9 Million unit sales, but there is also a much smaller group buying many different titles--suppose there's 500,000 people buying 10 titles and 50,000 people buying 80 titles?

It really depends on what you mean by "buy them regularly". If 10% of PS3 owners in the US buy BD discs "regularly", then we should see lots of BD titles selling 440,000 units. That ain't happening. There would need to be 20 titles selling 440,000 units to get to 9 Million in sales and AFAIK, the number of BD titles selling in the several hundred thousand range is, what, around 10?

I have to ask with an average title sell rate of 20,000 units, what studio would be crazy enough to pump out their catalog? They are going to concentrate on smash hit movies that appeal to PS3 gamers, because they are the ones that are likely to sell hundreds of thousands of units.

As far as drastically increasing the number of BD players in homes--well, there is already a drastically large number of BD players in homes (there were less than 2 million DVD players in US homes at the same point in DVD's life), the problem is the owners are not buying BD discs.

BobY
03-29-2008, 09:06 PM
True but the difference is DVD came into the market unopposed. Other then the obvious abomination DIVX there really were no formats to oppose early DVDs growth. DVD was a clear and obvious step above both VHS and laserdisc in every possible way. Blu-Ray on the other hand just got through a long and bloody format war with a mostly similar format. Now that the format war is over and Blu-Ray is unopposed and with 100% studio support, full profile features, and the Playstation 3 cheaper then ever it will now experiance the growth it could have had since the beginning if not for this messy format war.

This is the same argument Chris always gives and I always respond with:

There were already at least 3.75 Million PS3's in US homes when HD DVD was still in the game. HD DVD was not doing one single thing to prevent those people from buying Blu-Ray discs. They already had bought a player. They already had chosen a format. They were not sitting on anybody's fence.

And they were not buying discs, just like they are not buying discs now.

Chris never responds to this, so what's your take on it?

Look if even 25% of PS3 owners in the US were buying BD movies on a regular basis, the average title would sell a million copies. Even the best selling titles don't sell a million copies. Not even close. And there are only about 10 titles that have sold in big numbers.

Can't we just admit that the vast majority of PS3 owners are not buying BD movies and, as things currently stand, there is no reason to suspect they will. There's some reason for that and it's not HD DVD.

Lee Stewart
03-29-2008, 10:13 PM
Boby . . . if this will help . . .

those 3 million discs sold for the first 11 weeks of 2008. There were also about 60 new releases in the same time period. Plus when you look at the Nielsens - "older" titles still appear on the list.

I agree with you. BD owners are not buying movies . . . . Paramount and Universal may have just avoided FURTHER losses because HD DVD sold even less than BD did. They may not be in such a hurry to once again - start losing money on HDM.

We hear about new BD lines going in and at the same time we hear that they will not be "up to speed" until Q3. It takes 2 Q's to get these things installed and up and running?

IMHO - this is a classic case of the "Emperour's New Clothes."

Everyone is waiting . . . the losses in the HDM arena are very large . . . no one wants to be next. Best to talk a good game then actually committ money and resources.

tvine2000
03-29-2008, 10:33 PM
Boby . . . if this will help . . .

those 3 million discs sold for the first 11 weeks of 2008. There were also about 60 new releases in the same time period. Plus when you look at the Nielsens - "older" titles still appear on the list.

I agree with you. BD owners are not buying movies . . . . Paramount and Universal may have just avoided FURTHER losses because HD DVD sold even less than BD did. They may not be in such a hurry to once again - start losing money on HDM.

We hear about new BD lines going in and at the same time we hear that they will not be "up to speed" until Q3. It takes 2 Q's to get these things installed and up and running?

IMHO - this is a classic case of the "Emperour's New Clothes."

Everyone is waiting . . . the losses in the HDM arena are very large . . . no one wants to be next. Best to talk a good game then actually committ money and resources.

i think it goes back to what you said in another thread lee,
''flood the market
with those titles like back to the future,ghostbusters ,godfather etc.the question is ,how do you get the message to the studio's.they seem to hold on to those titles like fort knox

BobY
03-29-2008, 11:11 PM
Putting out a new title in BD is costly.

The film has to be remastered for the new HD codecs using the new compression toolkits and the compressionists are still learning how to best use them. It's more expensive and time consuming than DVD.

The audio soundtrack must be remastered for the new audio codecs. It's more expensive and time consuming than DVD.

Then there's the special features (video and audio).

Then there's the raw cost of the disc, which is more expensive than a DVD.

Then there's the packaging/artwork, marketing and sales costs.

It may very well be the case that releasing films like "Back to the Future", "Ghostbusters" and "The Godfather", or flooding the market with releases would spur interest in BD. Or it may be the case that the typical PS3 owner has no interest in movies like these and really wants to see lots of things exploding and a screen full of CGI and isn't much interested in any film that was made more than 5 years ago, so that strategy could lose the studios Millions of dollars.

It's a reality of the current market that if you want to sell a lot of copies of a BD title, it has to be something that appeals to PS3 owners. There still aren't enough standalone BD players out there to drive large volume BD movie sales.

The studios expect player sales to drive disc sales, not vice-versa. The studios are in business to make money selling content, not lose money trying to establish a CE format.

Chris Gerhard
03-30-2008, 05:34 AM
Putting out a new title in BD is costly.

The film has to be remastered for the new HD codecs using the new compression toolkits and the compressionists are still learning how to best use them. It's more expensive and time consuming than DVD.

The audio soundtrack must be remastered for the new audio codecs. It's more expensive and time consuming than DVD.

Then there's the special features (video and audio).

Then there's the raw cost of the disc, which is more expensive than a DVD.

Then there's the packaging/artwork, marketing and sales costs.

It may very well be the case that releasing films like "Back to the Future", "Ghostbusters" and "The Godfather", or flooding the market with releases would spur interest in BD. Or it may be the case that the typical PS3 owner has no interest in movies like these and really wants to see lots of things exploding and a screen full of CGI and isn't much interested in any film that was made more than 5 years ago, so that strategy could lose the studios Millions of dollars.

It's a reality of the current market that if you want to sell a lot of copies of a BD title, it has to be something that appeals to PS3 owners. There still aren't enough standalone BD players out there to drive large volume BD movie sales.

The studios expect player sales to drive disc sales, not vice-versa. The studios are in business to make money selling content, not lose money trying to establish a CE format.

Of course it costs more to make a Blu-ray disc than a DVD and that fact and the fact that Blu-ray is better than DVD means Blu-ray will sell for a higher price than DVD. The big problems from the studios standpoint with DVD now are prices are dropping, demand is dropping and of course profits are dropping. The Blu-ray release "No Country for Old Men" is being reported to be 10% of the total unit sales and of course a much greater share of dollar volume. DVD is still important obviously, but I believe within three years, a typical Blu-ray day and date release will sell 35% of the total DVD unit sales and about 50% of the DVD sales dollar volume. Big catalog film Blu-ray releases should outsell the DVD version going forward after release, both unit and dollar volume.

I don't think any analogy of what types of films will sell well on Blu-ray can be meaningful yet and as far as owners of PS3's, at least the ones that use it primarily for Blu-ray, should be no different than owners of other Blu-ray players in terms of what films are purchased. The game player that purchases an occassional Blu-ray disc might be different than the average, who knows at this point? I bought "No Country for Old Men", what a wild ride that film is and although it was something this old PS3 owner purchased, I bet it is also something the young game player might purchase. After it was known how great a player the PS3 is, it appeals to anybody that can make it work in their system. It is the best media player of any type I have ever seen, does more and does it all incredibly well.

Chris

crazyal
03-30-2008, 12:12 PM
If studios want a new avenue to sell movies then they will need to build a market base. If the main thing they do is release movies that the PS3 fan base will buy then that's the market they will have. If they release movies that have a much broader appeal then it will help sales of BD players. It's a chicken/ egg thing. One needs the other.

No matter how great the PS3 is there's a large group who will never buy it. Secondly if the PS3 is the only great player for BD movies then how do you expect other CEMs to continue to make BD players?

kamspy
03-30-2008, 12:30 PM
Everyone is waiting . . . the losses in the HDM arena are very large . . . no one wants to be next. Best to talk a good game then actually committ money and resources.

With Sony buying everyones lunch, who is losing with HDM? Which studio is in the red in their HDM department?

AFAIK, these figure have never been released. Perhaps a "Speculation" tag should have been added to that part of your post.

kamspy
03-30-2008, 12:31 PM
If studios want a new avenue to sell movies then they will need to build a market base. If the main thing they do is release movies that the PS3 fan base will buy then that's the market they will have. If they release movies that have a much broader appeal then it will help sales of BD players. It's a chicken/ egg thing. One needs the other.

No matter how great the PS3 is there's a large group who will never buy it. Secondly if the PS3 is the only great player for BD movies then how do you expect other CEMs to continue to make BD players?

You've seen the market here for people who want a non-PS3 BD player.

I assume they aren't alone.

ssjLancer
03-30-2008, 12:54 PM
With Sony buying everyones lunch, who is losing with HDM? Which studio is in the red in their HDM department?
Im wondering this too.

kamspy
03-30-2008, 12:58 PM
Im wondering this too.

This is the part were we don't get an answer from any of the BD death harbingers because these numbers don't exist for the public eye.

It sounds good when you post it, but when someone questions it, theres nothing left to do but tuck tail and run.

hatt
03-30-2008, 01:08 PM
This is the part were we don't get an answer from any of the BD death harbingers because these numbers don't exist for the public eye.

It sounds good when you post it, but when someone questions it, theres nothing left to do but tuck tail and run.


I really like the PS3 angle, its is surely my favorite. When talking about hardware, every PS3 is a game console. When talking about attach rates, every PS3 is a BD player. All time classic I tell you.:thumbsup:

Oh, and now it can be used for the 2.0 angle too. Still no 2.0 players out, the PS3 is a game console.:D

Cowboy X
03-30-2008, 01:56 PM
With Sony buying everyones lunch, who is losing with HDM? Which studio is in the red in their HDM department?

AFAIK, these figure have never been released. Perhaps a "Speculation" tag should have been added to that part of your post.

I am not sure who else besides Sony is in the red. Sony has obviously decided to put the BDA on their backs and try to carry them across the line. it has been working to some extent so far but much more investment needs to be made and more losses have to be sustained to make BD a mass market item and a successor to DVD. If Sony can get these costs spread a bit more within the BDA and some of the people who will now jump on to the bandwagon after HD DVD's demise, then they will have a good chance. But for now it doesn't really seem that anyone else is willing to step up to the plate and help. Sort of like NATO in Afghanistan. Some of the public statements by some prominent BDA members hint that they are not at all willing to take this cup from Sony and then some also are directly against th very strategies which BD will need to use to become a mass market item. So for now Sony is alone.

ssjLancer
03-30-2008, 02:20 PM
I am not sure who else besides Sony is in the red. Sony has obviously decided to put the BDA on their backs and try to carry them across the line. it has been working to some extent so far but much more investment needs to be made and more losses have to be sustained to make BD a mass market item and a successor to DVD. If Sony can get these costs spread a bit more within the BDA and some of the people who will now jump on to the bandwagon after HD DVD's demise, then they will have a good chance. But for now it doesn't really seem that anyone else is willing to step up to the plate and help. Sort of like NATO in Afghanistan. Some of the public statements by some prominent BDA members hint that they are not at all willing to take this cup from Sony and then some also are directly against th very strategies which BD will need to use to become a mass market item. So for now Sony is alone.Thats the player side of things. Some companies may be resentful that the PS3 is taking up too much of the pie, no one else is gonna spend $400 on a standalone when the PS3 does so much more for the same price.

Lee is talking on the software side of things though. Specifically studios like paramount and universal.
Paramount and Universal may have just avoided FURTHER losses because HD DVD sold even less than BD did. They may not be in such a hurry to once again - start losing money on HDM.
Speculation at the moment.
Companies like Singulus are on the rise with BD, there is money being made.

Cowboy X
03-30-2008, 02:27 PM
Thats the player side of things. Some companies may be resentful that the PS3 is taking up too much of the pie, no one else is gonna spend $400 on a standalone when the PS3 does so much more for the same price.

Lee is talking on the software side of things though. Specifically studios like paramount and universal.
Speculation at the moment.
Companies like Singulus are on the rise with BD, there is money being made.

I was talking about the software side as well to an extent.

Lee Stewart
03-30-2008, 02:49 PM
With Sony buying everyones lunch, who is losing with HDM? Which studio is in the red in their HDM department?

AFAIK, these figure have never been released. Perhaps a "Speculation" tag should have been added to that part of your post.

Sony only subsidizes the replication to the tune of $3/disc. And we don't know if that is still in effect. You have all the restoration, authoring and transfer costs that solely reside with the studios.

And you have titles selling less than 3000, 5000 to 10,000 etc.

You honestly believe all the studios are making money? What about those charts the BDA showed of Paramount titles at CEDIA last year. They were terrible sales numbers.

ssjLancer
03-30-2008, 03:04 PM
Sony only subsidizes the replication to the tune of $3/disc. And we don't know if that is still in effect. You have all the restoration, authoring and transfer costs that solely reside with the studios.

And you have titles selling less than 3000, 5000 to 10,000 etc.

You honestly believe all the studios are making money? What about those charts the BDA showed of Paramount titles at CEDIA last year. They were terrible sales numbers.Why would studios want to lose money?

They dont, so theres no reason to believe they are losing money. Unless you can give me proof and not speculation.

Lee Stewart
03-30-2008, 03:16 PM
Thats the player side of things. Some companies may be resentful that the PS3 is taking up too much of the pie, no one else is gonna spend $400 on a standalone when the PS3 does so much more for the same price.

Lee is talking on the software side of things though. Specifically studios like paramount and universal.
Speculation at the moment.

Companies like Singulus are on the rise with BD, there is money being made.

Think so? Think again . . .

CEDIA 2007:

http://i181.photobucket.com/albums/x66/LeeAStewart/PR-T1.jpg
http://i181.photobucket.com/albums/x66/LeeAStewart/PR-T2.jpg

Stop trumpeting the "company line" and look carefully at the numbers. I also have numbers for Q1 2007 so you can compare BD's "growth."

Jimmy Smith
03-30-2008, 03:19 PM
Think so? Think again . . .

CEDIA 2007:

http://i181.photobucket.com/albums/x66/LeeAStewart/PR-T1.jpg
http://i181.photobucket.com/albums/x66/LeeAStewart/PR-T2.jpg

Stop trumpeting the "company line" and look carefully at the numbers. I also have numbers for Q1 2007 so you can compare BD's "growth."

Comsumers didn't choose my aching ass:haha:

ssjLancer
03-30-2008, 03:20 PM
Think so? Think again . . .

Stop trumpeting the "company line" and look carefully at the numbers. I also have numbers for Q1 2007 so you can compare BD's "growth."Fluff.

Come back when you find something that shows paramount is losing money on the 10000 copies sold of Norbit and the 250000 copies sold overall.

tvine2000
03-30-2008, 03:23 PM
I really like the PS3 angle, its is surely my favorite. When talking about hardware, every PS3 is a game console. When talking about attach rates, every PS3 is a BD player. All time classic I tell you.:thumbsup:

Oh, and now it can be used for the 2.0 angle too. Still no 2.0 players out, the PS3 is a game console.:D

the but is there are players coming out 2.0.and there will be more
in the future,so i think all will balance out in the end,and the ps3 won't be the only act in town.
the ps3 as done its job keeping bd in the game during the war and still doing the job until every sal player is 2.0 from every ce.
i have seen many posts here and other forums where people are very happy with a 1.0 bd player.
i really don't care about pip and online features,but i see the need for it.i think boby is right about movies based on video games or any movie that would appeal to ps3 gamers.but hasn't it always been that way in movie history.gone with the wind most likely didn't appeal to the older generation of that time.hell my uncle told me when he was a kid frankinstein 1931 gave him nightmares and his mother gave him hell for seeing it in the first place.so my point is maybe hollywood has always targeted the youth of any time.

Lee Stewart
03-30-2008, 03:23 PM
Fluff.

Come back when you find something that shows studios are losing money on the 10000 copies sold of Norbit.

OK - you picked the title and the amount sold. Lets discuss it.

How much is the gross revenue to the studio for that title, with the MSRP being $39.99? (per disc)

ssjLancer
03-30-2008, 03:25 PM
OK - you picked the title and the amount sold. Lets discuss it.

How much is the gross revenue to the studio for that title, with the MSRP being $39.99? (per disc)1 million dollars.

Lee Stewart
03-30-2008, 03:27 PM
1 million dollars.

The number was 10,000 discs.

Come back when you find something that shows studios are losing money on the 10000 copies sold of Norbit.

Your number is too high - $100 a disc.;)

ssjLancer
03-30-2008, 03:47 PM
Ok Lee Ill help you out. Since we dont have numbers for BD Ill relate it to the DVD and Videogame industry.

According to THIS (http://stason.org/TULARC/pc/dvd-format-video/5-1-How-much-does-it-cost-to-produce-a-DVD-Isn-t-it-more-ex.html) the "Authoring and pre-mastering costs" are about $20000 for a 2 hour DVD movie. Lets say for some reason it costs about 8x that amount for a BD movie.

Now to the VG industry. According to Lazard Capital Markets (http://www.iht.com/articles/2007/07/16/business/games.php) the average PS3 game costs around $15 million dollars to make and needs to sell about 600k copies to break even.

So ballpark estimate, a high def movie title would only need to sell around 6000 copies to break even.

Again these arent concrete numbers, but Im sure the smart guys at paramount have found some magical way to not lose money when selling their stuff. Lets give these guys a little credit.

Lee Stewart
03-30-2008, 03:57 PM
Ok Lee Ill help you out. Since we dont have numbers for BD Ill relate it to the DVD and Videogame industry.

According to THIS (http://stason.org/TULARC/pc/dvd-format-video/5-1-How-much-does-it-cost-to-produce-a-DVD-Isn-t-it-more-ex.html) the "Authoring and pre-mastering costs" are about $20000 for a 2 hour DVD movie. Lets say for some reason it costs about 8x that amount for a BD movie.

Now to the VG industry. According to Lazard Capital Markets (http://www.iht.com/articles/2007/07/16/business/games.php) the average PS3 game costs around $15 million dollars to make and needs to sell about 600k copies to break even.

So ballpark estimate, a high def movie title would only need to sell around 6000 copies to break even.

I can't use your numbers to support your theory. Your numbers for DVD are 8 years old:

This is the February 9, 2000 revision of the official Internet DVD FAQ

Here is what I know:

In 2005 - it cost $9.00 to make a DVD. That included everything including the kitchen sink (Nes Pa?)

We know that it costs about $4 more to make a BD than it does a DVD (recent thread).

But that doesn't include all the programming and authoring which DVD doesn't have an BD does. Another $4 per disc (speculation)

That means we are at $20 to start with - studio gets half of MSRP. And we subtract $17 . . . leaves $3.00 per disc.

So with a sale of 10,000 discs they made a profit of $30,000.

ssjLancer
03-30-2008, 04:19 PM
I can't use your numbers to support your theory. Your numbers for DVD are 8 years old:

Here is what I know:

In 2005 - it cost $9.00 to make a DVD. That included everything including the kitchen sink (Nes Pa?)

We know that it costs about $4 more to make a BD than it does a DVD (recent thread).

But that doesn't include all the programming and authoring which DVD doesn't have an BD does. Another $4 per disc (speculation)

That means we are at $20 to start with - studio gets half of MSRP. And we subtract $17 . . . leaves $3.00 per disc.

So with a sale of 10,000 discs they made a profit of $30,000.Lets assume youre right...

..wheres the part where theyre losing money?

Lee Stewart
03-30-2008, 04:27 PM
Lets assume youre right...

..wheres the part where theyre losing money?

That's if everything goes well which we know does not happen all the time.

And a multi billion company is not excited about $30,000 which is probably less than their rubber bands expenditure. Salaries for executives was not part of the $9.00 to begin with. But advertising was.

And if the title was a catalog title like WB did a bunch - the costs are higher (restoration of the film elements) and substantially lower sales. We have titles that didn't sell 3000 discs.

If you think that $30,000 was profitable then all I can see is more arguments between us coming to no good. You have to move off your position for us to continue the discussion.

ssjLancer
03-30-2008, 04:28 PM
No need. You can no longer defend your position.

Studios arent losing any money making BD movies. lets move on now.

Honestly though this is the first time in any forum where I heard someone mention the idea that studios are actually losing money supporting HDM. Not surprising though.

Lee Stewart
03-30-2008, 04:30 PM
No need. You can no longer defend your position.

Studios arent losing any money making BD movies. lets move on now.

Honestly though this is the first time in any forum where I heard someone mention the idea that studios are actually losing money supporting HDM. Not surprising though.


It's OK to lose an argument Lancer . . . happens to all of us. This time it happened to you.;)

ssjLancer
03-30-2008, 04:33 PM
It's OK to lose an argument Lancer . . . happens to all of us. This time it happened to you.;)I already told you Im never wrong.

Lee Stewart
03-30-2008, 04:34 PM
I already told you Im never wrong.

:haha: You are never right either! :haha:

edders
03-30-2008, 04:38 PM
what market penetration

ssjLancer
03-30-2008, 04:39 PM
I just noticed that with your spectacular calculations apparently studios have higher profit margins with each dvd sold than with each HDM.

Oh lee is there anything you cant do wrong.

Lee Stewart
03-30-2008, 04:58 PM
I just noticed that with your spectacular calculations apparently studios have higher profit margins with each dvd sold than with each HDM.

Oh lee is there anything you cant do wrong.

Just figured that out hey?

MikeRox
03-30-2008, 05:49 PM
No need. You can no longer defend your position.

Studios arent losing any money making BD movies. lets move on now.

Honestly though this is the first time in any forum where I heard someone mention the idea that studios are actually losing money supporting HDM. Not surprising though.

Actually, I think they are losing money on HDM at the moment. But, they are building a future revenue stream/platform. Some titles will make money, but a lot of the titles won't make a penny atm.

ssjLancer
03-30-2008, 06:40 PM
Just figured that out hey?That youre crazy? no.

Actually, I think they are losing money on HDM at the moment. But, they are building a future revenue stream/platform. Some titles will make money, but a lot of the titles won't make a penny atm.Im sure there are a couple titles that might be losing money, not overall. Maybe Disney and Fox would be willing to accept the risks, but paramount? I doubt it.
Studios make enough risks even producing the movie and hoping it does good the box office. Selling DVDs and HDM is suppose to be nearly risk free, they'll leave all that trouble to the BDA.

HighDefRealist
03-30-2008, 07:18 PM
True but the difference is DVD came into the market unopposed. Other then the obvious abomination DIVX there really were no formats to oppose early DVDs growth. DVD was a clear and obvious step above both VHS and laserdisc in every possible way. Blu-Ray on the other hand just got through a long and bloody format war with a mostly similar format. Now that the format war is over and Blu-Ray is unopposed and with 100% studio support, full profile features, and the Playstation 3 cheaper then ever it will now experiance the growth it could have had since the beginning if not for this messy format war.

Great post, on the money!

HighDefRealist
03-30-2008, 07:22 PM
I really like the PS3 angle, its is surely my favorite. When talking about hardware, every PS3 is a game console. When talking about attach rates, every PS3 is a BD player. All time classic I tell you.:thumbsup:

Oh, and now it can be used for the 2.0 angle too. Still no 2.0 players out, the PS3 is a game console.:D
It's amazing that when this kind of FUD is so obvious that the old red diehards keep on with it.

Lee Stewart
03-30-2008, 07:22 PM
Great post, on the money!


Yep. We are finally going to find out if the public really wants a HDM or will they be happy with DVD . . . even on their HDTV.

HighDefRealist
03-30-2008, 07:23 PM
Comsumers didn't choose my aching ass:haha:
Ditto!

BobY
03-30-2008, 09:48 PM
Of course it costs more to make a Blu-ray disc than a DVD and that fact and the fact that Blu-ray is better than DVD means Blu-ray will sell for a higher price than DVD. The big problems from the studios standpoint with DVD now are prices are dropping, demand is dropping and of course profits are dropping. The Blu-ray release "No Country for Old Men" is being reported to be 10% of the total unit sales and of course a much greater share of dollar volume. DVD is still important obviously, but I believe within three years, a typical Blu-ray day and date release will sell 35% of the total DVD unit sales and about 50% of the DVD sales dollar volume. Big catalog film Blu-ray releases should outsell the DVD version going forward after release, both unit and dollar volume.

I don't think any analogy of what types of films will sell well on Blu-ray can be meaningful yet and as far as owners of PS3's, at least the ones that use it primarily for Blu-ray, should be no different than owners of other Blu-ray players in terms of what films are purchased. The game player that purchases an occassional Blu-ray disc might be different than the average, who knows at this point? I bought "No Country for Old Men", what a wild ride that film is and although it was something this old PS3 owner purchased, I bet it is also something the young game player might purchase. After it was known how great a player the PS3 is, it appeals to anybody that can make it work in their system. It is the best media player of any type I have ever seen, does more and does it all incredibly well.

Chris

A Blu-Ray disc must sell for a higher price than a DVD--whether it will sell for a higher price is up to consumers. The sales data indicates that, for most BD releases at least, no they are not selling. Sales under 10,000 units for many titles when there are Millions of players out there are, you must admit, dreadful.

"No Country for Old Men" sold poorly for a new DVD release, so it's not that surprising that the BD version appeared to do well, especially with discount coupons that in many cases made the BD version less expensive than the DVD. Again, percentages mean nothing, the actual sales numbers are what's important. The press emphasis is on the percentage because if you look at the actual unit sales number (68,000), it's below first week sales for most previous hot BD titles. One might expect that new hot releases would do better than previous hot releases, not significantly worse.

Again, it's all marketing propaganda intended to convince the public that BD is going through the roof. As long as the BDA is aware of that and trying to correct the sales problem, then it could be OK. If they believe the numbers really are looking good, they are in trouble.

We'll have to wait and see, but I consider the notion that any BD release will ever outsell the same DVD release in unit volume to be utterly preposterous. Outselling in terms of dollar volume may at least be possible (though improbable) if the selling price of DVD's continues to fall and Blu-Ray somehow manages to convince a large number of consumers that better PQ is worth such a premium. No evidence of that at this point.

Also retail prices of DVD's can fall without a corresponding drop in wholesale prices, so the studios won't necessarily lose as much margin as it appears. Obviously they'd like higher margins, but what they want is the biggest bottom line. High margins on low sales is not usually the key to success in the consumer market and if it's the high margins that are keeping sales lower than desired and leading to lower net profit, that's a bad business model.

As for my expectations as to what kind of films will be hot on BD, you only need to look at the few BD films that have sold in large volumes to see the PS3 demographic is driving sales. For my tastes, there is only one of the top 10 selling BD films I'd want to own ("Blue Planet"), the rest I would rent (and not even all of them) as they are mostly special-effects oriented fluff that I would only watch once.

crazyal
03-30-2008, 10:07 PM
Lee I think you made it a little too simple trying to figure out the costs of BD production as a per disc cost. There's two types of expenses, fixed and per unit.

The mastering, compressionist, etc. are fixed. They have to be spread out across every disc sold, if they sell 100 that could mean the cost could be hundreds per disc. If they sell millions it could be pennies. They are also costs that once spent usually means they will not be spent a second time if another production run happens.

The per unit costs are things like the price of each disc to stamp, cases, etc. They are easy. You might get a discount if you order a million over 1000.

Then there's shipping and warehouse space. It's a split between the two. Clearly it cost more to ship a million vs. 1000 but it's not a 1 to 1 ratio. The same for storage.

There's a physical number that needs to be reached in terms of gross profit from sales that needs to be reached before the net profit is a positive one. Sales of 10K could produce a profit. However sales of 10K where most were from a BOGO sale could be a loss. So trying to figure out how much per disc a movie cost is a moving target.

BobY
03-30-2008, 10:16 PM
I can't use your numbers to support your theory. Your numbers for DVD are 8 years old:



Here is what I know:

In 2005 - it cost $9.00 to make a DVD. That included everything including the kitchen sink (Nes Pa?)

We know that it costs about $4 more to make a BD than it does a DVD (recent thread).

But that doesn't include all the programming and authoring which DVD doesn't have an BD does. Another $4 per disc (speculation)

That means we are at $20 to start with - studio gets half of MSRP. And we subtract $17 . . . leaves $3.00 per disc.

So with a sale of 10,000 discs they made a profit of $30,000.

Actually it's even worse than that, Lee. This is far too simplistic an analysis. The costs for DVD were based on certain assumed (average) volumes spread over a large number of titles and were accurate in that context. BD is not anywhere near that context, with less than 600 titles and the majority of title sales under 20,000 units--many under 10,000 units. Most BD titles have sold less copies than a single BD production line can make in a single day.

There are fixed costs which don't change regardless of how many discs you sell, including authoring and marketing costs, labor and overhead, artwork design and setup charges, etc. If you don't sell as many discs as you planned, those costs add exponentially to the disc cost. On top of that, there is the opportunity cost associated with making a poor selling title versus a better-selling title and expected return on investment.

While I don't have any numbers to link to (believe me, the BD spin machine would be trumpeting the numbers if they were good), my business experience tells me these studios are losing money on BD except possibly on a few hot titles and whatever losses they would be showing are covered by whatever they were paid to be exclusive in the first place.

It's worth it for the studios to participate because it's not really costing them anything (whatever they were paid would have been conditional on their supporting BD) and it's a shot at establishing a new, higher-margin market for their product (content). If Blu-Ray doesn't catch on big by the time that money runs out though, what studio will stay in?

BobY
03-30-2008, 10:20 PM
Comsumers didn't choose my aching ass:haha:

Punctuation is your friend, Jimmy.

What you stated was: consumers didn't choose your aching ass. Which I'm sure is true. I didn't even see your aching ass on the carts :D

If you meant those numbers demonstrate that consumers clearly chose Blu-Ray over HD DVD, please look at those awful, horrible, pathetic sales numbers for both formats. All those numbers show is that consumers chose neither format, but that there were more PS3's sold than HD DVD players.

ssjLancer
03-30-2008, 11:44 PM
Actually it's even worse than that, Lee. This is far too simplistic an analysis. The costs for DVD were based on certain assumed (average) volumes spread over a large number of titles and were accurate in that context. BD is not anywhere near that context, with less than 600 titles and the majority of title sales under 20,000 units--many under 10,000 units. Most BD titles have sold less copies than a single BD production line can make in a single day.

There are fixed costs which don't change regardless of how many discs you sell, including authoring and marketing costs, labor and overhead, artwork design and setup charges, etc. If you don't sell as many discs as you planned, those costs add exponentially to the disc cost. On top of that, there is the opportunity cost associated with making a poor selling title versus a better-selling title and expected return on investment.Lee included the fixed costs and spread it over the number of titles with the fake $17 number.
I also gave a link to the costs involving disc production separate from replication costs.
Marketing isnt a factor since there are no BD commercials, just DVD commercials with 'also available in hidef' thrown in.
Opportunity cost isnt the subject here, its whether studios are spending more money than they are making.

While I don't have any numbers to link to (believe me, the BD spin machine would be trumpeting the numbers if they were good), my business experience tells me these studios are losing money on BD except possibly on a few hot titles and whatever losses they would be showing are covered by whatever they were paid to be exclusive in the first place.

It's worth it for the studios to participate because it's not really costing them anything (whatever they were paid would have been conditional on their supporting BD) and it's a shot at establishing a new, higher-margin market for their product (content). If Blu-Ray doesn't catch on big by the time that money runs out though, what studio will stay in?I learned alot today.
First the BDA paid Paramount, Universal, WB, and Toshiba to not use triple layer discs.
Now not only was the BDA subsidizing disc production to match HDDVDs, but they were subsidizing it enough so that Studios were actually paying nothing. Oh yes it all makes sense.

BaghdadBob
03-30-2008, 11:49 PM
The latest surveys in the last few months say anywhere from 45-55% of PS3 owners don't even own an HDTV. So I would think around half would be a decent guess concerning movies purchased.

not quite. 40% of them dont own an HDTV. (60% do)

where as only 40% of the general populace does.

Meaning that compared to the gen pop that PS3 owners are more likely to have HDTV.

BaghdadBob
03-31-2008, 12:01 AM
I really like the PS3 angle, its is surely my favorite. When talking about hardware, every PS3 is a game console. When talking about attach rates, every PS3 is a BD player. All time classic I tell you.:thumbsup:

Oh, and now it can be used for the 2.0 angle too. Still no 2.0 players out, the PS3 is a game console.:D

yep

and it is the "usual suspects" who always make these arguments. my favorites are that 2.0 was an absolute requirement and BD sucked because it didnt have it. now that it does have it is a useless gimmick that no one needs (which has been my position all along).

Another fav is that BD was incomplete. Yet the same usual suspects were talking about the new developments on the horizon for the hd-dvd. they also forget that DVD grew as it went as well. Im pretty sure I that dolby digital was the only enhanced audio supported early in dvd's life.

BobY
03-31-2008, 12:08 AM
Lee spread the fixed costs over the number of titles with the fake $17 number.
I also gave a link to the costs involving disc production separate from replication costs.
Marketing isnt a factor since there are no BD commercials, just DVD commercials with 'also available in hidef' thrown in.
Opportunity cost isnt the subject here, its whether studios are spending more money than they are making.

I learned alot today.
First the BDA paid Paramount, Universal, WB, and Toshiba to not use triple layer discs.
Now not only was the BDA subsidizing disc production to match HDDVDs, but they were subsidizing it enough so that Studios were actually paying nothing. Oh yes it all makes sense.

Hmm, where did you learn that from? I certainly didn't say that.

SONY was and continues to subsidize BD disc production. Sources at Cinram over at AVS gave it at $3 per disc. SONY DADC and Cinram were the only two companies in the US making BD discs last year and Cinram was using production equipment paid for by SONY. Even then SONY supplied 90% of all BD discs in the US.

Do you really imagine that studios agreed to be Blu-Ray exclusive for free? What company would tie their hands and limit their potential without some sort of compensation?

Just as HD DVD compensated Paramount/DreamWorks for exclusivity, certainly at least some of the BD exclusive studios were compensated in some way and are using that to cover losses. You can't seriously believe these studios are making money on movies that sell 2000-3000 units?

BTW, marketing is still a cost factor. Advertising isn't the only thing that comes under the heading of marketing. There is all sorts of support for retailers.

ssjLancer
03-31-2008, 12:26 AM
Hmm, where did you learn that from? I certainly didn't say that.

SONY was and continues to subsidize BD disc production. Sources at Cinram over at AVS gave it at $3 per disc.Yeah, to subsidize the difference in yield values compared with HDDVD. Not to protect the studios from poor sales lol.
SONY DADC and Cinram were the only two companies in the US making BD discs last year and Cinram was using production equipment paid for by SONY. Even then SONY supplied 90% of all BD discs in the US.Umm thats great, but again, nothing to do with the subject at hand. Just some added information but Cinram is adding 15 lines this year all from Singulus compared to the 2 Sony ones last year.

Do you really imagine that studios agreed to be Blu-Ray exclusive for free? What company would tie their hands and limit their potential without some sort of compensation?For free? the potential for a multi billion dollar market isnt enough incentive?
Lets swap in a few words.
Do you really imagine that studios agreed to be DVD exclusive for free?
Yes.

Just as HD DVD compensated Paramount/DreamWorks for exclusivity, certainly at least some of the BD exclusive studios were compensated in some way and are using that to cover losses. You can't seriously believe these studios are making money on movies that sell 2000-3000 units?Nope. Only paramount cause they needed some incentive to join a losing team.

BTW, marketing is still a cost factor. Advertising isn't the only thing that comes under the heading of marketing. There is all sorts of support for retailers.I doubt you can put a per movie number on that. If anything its again, the BDA thats paying, not the studios.

PFC5
03-31-2008, 12:37 AM
EVERY studio got money to support the format they supported. EVERY ONE.

How they received this money (incentives, marketing reimbursements, etc) and how much is the unknowns. To think otherwise is naive IMO.

ssjLancer
03-31-2008, 12:52 AM
EVERY studio got money to support the format they supported. EVERY ONE.I agree they got money, I believe its called profit made from disc sales.

How they received this money (incentives, marketing reimbursements, etc) and how much is the unknowns. To think otherwise is naive IMO.This topic has gone a long way.
We went from Lee saying studios are losing money.
To Boby saying they are losing money, but Sony is paying them back.

The only thing we know is that Paramount got paid money, that was their incentive. The only incentive Sony gave is the promise of PS3 sales and matching/better manufacturing, everything else is negligible or unfounded speculation.

PFC5
03-31-2008, 12:58 AM
I agree they got money, I believe its called profit made from disc sales.

This topic has gone a long way.
We went from Lee saying studios are losing money.
To Boby saying they are losing money, but Sony is paying them back.

The only thing we know is that Paramount got paid money, that was their incentive. The only incentive Sony gave is the promise of PS3 sales and matching/better manufacturing, everything else is negligible or unfounded speculation.

So when the BD finance insider stated at AVS that Warner got enough incentives to not care about the current backlogs & yield issues with BD disc replications, he wasn't a reliable source? :hithere:

ssjLancer
03-31-2008, 02:26 AM
So when the BD finance insider stated at AVS that Warner got enough incentives to not care about the current backlogs & yield issues with BD disc replications, he wasn't a reliable source? :hithere:huh?
Ive said several times that the subsidies dealing with poor yield rates were the only incentives Sony gave(along with the promise of better sales)

MikeRox
03-31-2008, 03:22 AM
I agree they got money, I believe its called profit made from disc sales.


Warner Bros confirmed they got money to support HD DVD even though they were neutral (hence contracted until May 31st). I don't doubt the BDA were/are doing the same right now or do we think Warner Bros signed a contract to provided HD DVD content up until the 31st of May for free out of the kindness of their hearts? .

I don't think Blu-ray releases are as profitable as you think right now. However the release are stimulating growth in the format, which can/will lead to long term profits. Much like the idea of taking a hit on a games console at launch, the intention is to reap the profits when the format is more developed.

MikeRox
03-31-2008, 03:23 AM
huh?
Ive said several times that the subsidies dealing with poor yield rates were the only incentives Sony gave(along with the promise of better sales)

poor yield rates is different to a backlogue of demand for discs. The latter is very real and increasingly documented.

BobY
03-31-2008, 08:00 AM
Yeah, to subsidize the difference in yield values compared with HDDVD. Not to protect the studios from poor sales lol.

Exactly, I don't know why you interpreted what I said otherwise. Although it's not just yield, it's the actual cost per disc as well. There are more processing steps, more material used and longer cycles times (reducing output rate) in addition to higher scrap. The subsidies are to get the discs to a cost the studios are wiling to pay.

Umm thats great, but again, nothing to do with the subject at hand. Just some added information but Cinram is adding 15 lines this year all from Singulus compared to the 2 Sony ones last year.

Yep. it's a nearly $40 Million capital investment and won't be fully operational until the fall. Cinram's business has been hurting as DVD production has fallen and competition increasing (Cinram is not far from me):

http://ca.news.yahoo.com/s/capress/080306/business/cinram

Of course the fact that SONY made 90% of BD discs is relevant. They are inherently the lowest cost producer of BD since they make their own production equipment and they don't charge themselves licensing fees that other studios and replicators must indirectly pay SONY (that's why Cinram went with Singulus lines instead of SONY--the SONY equipment was too expensive).

As the lowest cost producer, SONY can absorb cost overages that third parties will not (that's why SONY had to subsidize third parties). Also, since SONY was willing to lose Billions of dollars on Blu-Ray, they can make up any price they want for the discs regardless of what they cost, then bury the loss in their books. It remains to be seen what BD discs will actually cost studios going forward, unless SONY plans to continue to subsidize the difference between an acceptable price and what they really cost. If volumes increase significantly, SONY won't continue the subsidies--3$ per disc at 50 Million discs is $150 Million--it completely eradicates the income stream from BD disc licensing, which was one of the main reasons SONY was willng to lose so much money trying to establish Blu-Ray.

For free? the potential for a multi billion dollar market isnt enough incentive?

No, not on an unproven format. "Potential is interesting, performance is everything". While studios like FOX and possibly Disney (although Disney continued to hedge their bets by supporting HD DVD's technical efforts in the DVD Forum) may have chosen to be Blu-Ray exclusive for reasons such as HD DVD's lack of region coding or other security concerns, it's highly unlikely the other studios committed to exclusivity without some sort of incentives. A company can always choose to only support the format that makes sense for their business, but they don't need to announce that they are exclusive, all that does is limit their potential market.

Only paramount cause they needed some incentive to join a losing team.

The only winning team right now is DVD and that's beginning to falter. BD fans hope that DVD's faltering will lead to BD success, but the economic reality is, the same forces that are causing DVD to falter will likely cause BD to falter as well--lack of high-demand content and increased rentals (especially given the high cost to own BD discs versus renting them).

I doubt you can put a per movie number on that. If anything its again, the BDA thats paying, not the studios.

Ah, so you agree the BDA is subsidizing the studios so they don't lose money. Glad to see you came around ;)

Actually this would be just the kind of incentives I was talking about--helping to offload the production, marketing and advertising costs--not cash payouts. Cash payouts look really bad on your books and might attract the interest of the Justice Department's anti-trust division (as it did in the early days of BD).

ssjLancer
03-31-2008, 01:20 PM
Exactly, I don't know why you interpreted what I said otherwise. Although it's not just yield, it's the actual cost per disc as well. There are more processing steps, more material used and longer cycles times (reducing output rate) in addition to higher scrap. The subsidies are to get the discs to a cost the studios are wiling to pay.Are you confused? The subsidies are there to match HDDVD's pricing. In case you didnt know, HDDVD is also a High Def format. Again, its there to stay competitive with HDDVD, not to protect the studios from poor sales performances.

Yep. it's a nearly $40 Million capital investment and won't be fully operational until the fall. Cinram's business has been hurting as DVD production has fallen and competition increasing (Cinram is not far from me):

http://ca.news.yahoo.com/s/capress/080306/business/cinram

Of course the fact that SONY made 90% of BD discs is relevant. They are inherently the lowest cost producer of BD since they make their own production equipment and they don't charge themselves licensing fees that other studios and replicators must indirectly pay SONY (that's why Cinram went with Singulus lines instead of SONY--the SONY equipment was too expensive). Its irrelevant because we arent talking about Singulus, we're talking about the studios, and unless you can give me a link stating that its costs more for studios to use Sony discs rather than Singulus discs then the whole point is useless.

No, not on an unproven format. "Potential is interesting, performance is everything". While studios like FOX and possibly Disney (although Disney continued to hedge their bets by supporting HD DVD's technical efforts in the DVD Forum) may have chosen to be Blu-Ray exclusive for reasons such as HD DVD's lack of region coding or other security concerns, it's highly unlikely the other studios committed to exclusivity without some sort of incentives. A company can always choose to only support the format that makes sense for their business, but they don't need to announce that they are exclusive, all that does is limit their potential market.Again, youre assuming 'committing' results in huge losses that needs to be offset with 'incentive' deals. You, lee, or anyone else in this thread hasnt been able to prove this. While Ive at least have made a pretty decent attempt at finding that studios should be able to break even at around 5000 copies sold.
Incentives were only used to sway the companies from one side to another, nothing else.

The only winning team right now is DVD and that's beginning to falter. BD fans hope that DVD's faltering will lead to BD success, but the economic reality is, the same forces that are causing DVD to falter will likely cause BD to falter as well--lack of high-demand content and increased rentals (especially given the high cost to own BD discs versus renting them).Selling 2 crappy cars will still get you more money than selling 1 crappy car.

Ah, so you agree the BDA is subsidizing the studios so they don't lose money. Glad to see you came around ;) Again, you cant put a per movie cost on it. Would you consider the HDDVD promo ads from Toshiba 'subsidizing studios?'

Actually this would be just the kind of incentives I was talking about--helping to offload the production, marketing and advertising costs--not cash payouts. Cash payouts look really bad on your books and might attract the interest of the Justice Department's anti-trust division (as it did in the early days of BD).You still havent proven anywhere that without these incentives, studios would be losing money.

If BD never existed. Do you think Toshiba would have given paramount the same kind of incentive, or even a quarter of what they gave?
Not even close. These incentives resulted from the format war, not cause HDM is this dangerous high risk market that only the bravest of studios can undertake.

Lee Stewart
03-31-2008, 01:32 PM
Lancer - we went through this already because your 5000 "breakeven" number is flawed. You did not address the authoring costs. You did not address the higher manufacturing costs.

All you did was throw out some numbers and said . . . Ta Da! Like this is fact . . . when it isn't.

Uh Oh . . .

Are you confused? The subsidies are there to match HDDVD's pricing. In case you didnt know, HDDVD is also a High Def format. Again, its there to stay competitive with HDDVD, not to protect the studios from poor sales performances

Well the war is over . . . bye bye subsidzing . . . according to you.;)

ssjLancer
03-31-2008, 01:40 PM
Lancer - we went through this already because your 5000 "breakeven" number is flawed. You did not address the authoring costs. You did not address the higher manufacturing costs. I addressed the authoring costs. Id say 8 times that of DVD gives me alot of leeway, the number probably isnt nearly that high. And manufacturing costs for a production run of 10000 discs comes out to a whopping $12000 dollars, and that includes the set-up costs. Not enough to skew numbers.

All you did was throw out some numbers and said . . . Ta Da! Like this is fact . . . when it isn't.

Uh Oh . . . Naw thats what you did. Remember this 'with durr extra authoring costs Ill put in an extra $4 per disc..'

Well the war is over . . . bye bye subsidzing . . . according to you.;)I dont expect them on DVDs, wouldnt expect them with BDs.

Lee Stewart
03-31-2008, 01:53 PM
You have no idea how complex and expensive it is to author in BD-Java. If you did, then you would understand why I said $4 a disc . . . . when the average BD title sells 20,000

ssjLancer
03-31-2008, 02:02 PM
You have no idea how complex and expensive it is to author in BD-Java. Would it be much much more than 8x the cost to author a movie in DVD?
If you did, then you would understand why I said $4 a disc . . . . when the average BD title sells 20,00020k? thats much more than my 5k number. I guess its almost certain that studios do make money on BD.

MikeRox
03-31-2008, 02:07 PM
Would it be much much more than 8x the cost to author a movie in DVD?

Could quite possibly be more, BD-Java required specialist high end programmers. Monkeys can cobble together DVD menus now.

Lee Stewart
03-31-2008, 02:11 PM
Would it be much much more than 8x the cost to author a movie in DVD?
20k? thats much more than my 5k number. I guess its almost certain that studios do make money on BD.

You can't prove a negative. But you just posted a positive . . .

PROVE IT!

LINK?

ssjLancer
03-31-2008, 02:25 PM
Could quite possibly be more, BD-Java required specialist high end programmers. Monkeys can cobble together DVD menus now.You guys are funny. A Java programmer is anything but a 'specialist high end programmer'
Think of it this way. They use javascript/HDi to make alot of webpages. Alot of times the same javascript programmers will also program the java aspect of the website. Java programming isnt a rare talent like some of you have been lead to believe.

A monkey can cobble up DVD menus. But I doubt in this case studios are using 'DVD maker magic' to make their movies.

MikeRox
03-31-2008, 02:36 PM
Take it up with the studios, they're the ones who said it's far more expensive to code BD-Java. Exponentially so even compared with HDi.

The Java and Javascript I studied at university certainly isn't the same stuff used to make BD-Java stuff.

Are you sure they're actually the same thing? I thought BD-Java was an evolution of Java but actually a completely new language overall. Certainly with performing the things it does. It's still going to cost loads more than what is used on standard DVDs though. I've also read articles about how special programmers were required for BD-Java menus. May well have been "Red Ant FUD" but it certainly wasn't refuted at the time.

ssjLancer
03-31-2008, 02:57 PM
Take it up with the studios, they're the ones who said it's far more expensive to code BD-Java. Exponentially so even compared with HDi.You are referring to the comments by that CEO. But he didnt give anything precise. To him 'far more expensive' may just mean 50k vs. 20k. 'Harder to find' may just mean 'dam I cant hire a monkey.'

The Java and Javascript I studied at university certainly isn't the same stuff used to make BD-Java stuff.

Are you sure they're actually the same thing? I thought BD-Java was an evolution of Java but actually a completely new language overallIt certainly wouldnt be a completely new language. Actually all/most programming languages are just an evolution of each other and BD-Java is no exception.
"BD-J is based on a packaged media profile of Globally Executable MHP, or GEM. GEM, in turn, forms the basis of most global digital television application standards, including Multimedia Home Platform ("DVB-MHP") for broadcast, satellite, and cable worldwide, OpenCable Application Platform ("OCAP") for North American cable, and Advanced Common Application Platform ("ACAP") for US broadcast. GEM is an ETSI standard; DVB-MHP is a DVB standard. All GEM-based standards are built on top of Java technology, invented by Sun Microsystems. Because BD-J, MHP, OCAP, and ACAP are all based on the Java platform, there is a high degree of content interoperability between these standards, making it easier, for example, for Blu-ray Disc content features to be made available on cable Video on Demand, or for interactive television content originally aired on broadcast television to be repackaged and made available on Blu-ray Disc."

Certainly with performing the things it does. It's still going to cost loads more than what is used on standard DVDs though.The comparison I gave, which I think was pretty forgiving, was 160k vs 20k.
Sorry but its pretty hard for me to believe that it costs much more than 160k to make a BD when it costs an 1/8 of that to make a DVD.

MikeRox
03-31-2008, 03:17 PM
Don't forget that cost is being recouped from far fewer units being sold though which again exponentially spikes the development costs (in comparison the the number of units that are going to be sold) though.

I'm not saying theres no way in hell that studios make a profit on HDM. But it seems very unlikely, especially given B&M retailer reluctance to currently throw their weight behind the format in any significant way.