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

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Old 03-11-2012, 05:30 PM   #1921
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Originally Posted by Kosty View Post
First off you once again have to ignore the effect of releases which everyone in the industry understands affected the statistics last year.
That doesn't make that cold hard stats any less a fact. Yes, box office power was down 8.2%, so undoubtedly that had some effect. On the other hand though Blu-ray catalog output was way up and then there was Star Wars. There are many other factors as well, such as people just aren't interested in upgrading from DVD to Blu-ray. 24% market share after 5 1/2 years is just sad.


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But the more important issue is that not all sales have the same significance. Even though they count the same as revenues or unit sales, lower priced DVD catalog sales are far lower margin and generate less profit to the studios and retailers than new release DVD sales, new to Blu-ray sales and new release and premium sku Blu-ray units.
How much more margin can there be in Blu-ray new release over DVD new release? The Blu-ray combo costs about $5 more and they have to pack in a DVD and UV/DC as well. The DVD is bare bones. Most of the DVD catalog selling are SKU issued years ago. I don't think they were printing up many last year.

Also remember DVD sells a ton more new release TV shows than Blu-ray, and those have much higher margins than new theatrical releases.

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If most of the OD revenue decline is in low margin catalog DVD sales because those units are commanding a lower price at retail and almost all of the gain is in higher margin Blu-ray sku sales then that's a different dynamic to consider.
Not true. DVD catalog has been declining for years and very little comes out anymore. Most of that decline had already occurred. I think more of the decline is in TV shows, as people are taking to watching those more on Netflix or other means more convenient. There is still plenty of margin in TV shows obviously.

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Blu-ray is doing much better to cover DVD attrition since 1997 in the most important and profitable higher margin segment of new release sales than for the less important and less profitable catalog DVD sale segment. At this point also any Blu-ray catalog sales that are occurring are pure extra found revenue to the studios harvested from their libraries.
Where did you get 1997 from? the DVD Release Report? So you still think new releases start in 1997 and everything before is catalog? Please.

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The overall decline in OD revenues of course is a concern but Blu-ray is doing best in the new release segment where the margins are best and volumes per title are highest. So its not like all revenues for OD sales are equally important.
That's always been true. Unless you have some proof though that new release sales are falling at a slower rate then overall sales, then that's like saying Q4 has more sales than any other quarter of the year. It doesn't mean anything here.

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DVD revenues from catalog sales were destined to decline anyway as the studios ran out of older titles to release and those titles were exposed for longer periods of time in release at retail. With DVD at full household penetration for many years now it was inevitable that price points would decline at retail and less revenues generated for catalog sales. That would have happened with or without Blu-ray.
Yes of course, but Blu-ray catalog sales were not destined to be so poor as they have been. More was expected.

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Blu-ray is increasing in sales while DVD is in decline. Combining the two is misleading in many ways. As long as higher margin Blu-ray sales continue to increase and have volumes better than EST the studios and retailers will continue to see Blu-ray as an important and successful new revenue stream that along with other new digital revenue streams will together be modern alternatives to offset the decline of DVD. No one revenue stream, or Blu-ray alone will replace DVD and everyone knows that.
Combining the two is misleading only if you want to hide from the truth that OD is declining. As for margins, as Blu-ray gains marketshare, margins on the format decrease as well as price erosion affects the format over time. DVD doesn't have a monopoly in price erosion. In fact, I would say that Blu-ray is suffering greater price erosion than DVD is, as the prices have further to fall since they are higher to begin with. So in effect, the two formats in concert are seeing serious price erosion, mainly on catalog, new releases that are over 6 months old.
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Old 03-11-2012, 08:21 PM   #1922
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Originally Posted by Kosty
Blu-ray is doing much better to cover DVD attrition since 2007 in the most important and profitable higher margin segment of new release sales than for the less important and less profitable catalog DVD sale segment. At this point also any Blu-ray catalog sales that are occurring are pure extra found revenue to the studios harvested from their libraries.
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Where did you get 1997 from? the DVD Release Report? So you still think new releases start in 1997 and everything before is catalog? Please.
I meant 2007, not 1997 my bad.

But 1997 is still the break that the industry uses but obviously it makes sense for us to trak anything between 1997 and up to now that was not released day and date with the DVD on Blu-ray as a Blu-ray catalog release.
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Old 03-11-2012, 08:30 PM   #1923
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Originally Posted by Kosty
But the more important issue is that not all sales have the same significance. Even though they count the same as revenues or unit sales, lower priced DVD catalog sales are far lower margin and generate less profit to the studios and retailers than new release DVD sales, new to Blu-ray sales and new release and premium sku Blu-ray units.
Quote:
How much more margin can there be in Blu-ray new release over DVD new release? The Blu-ray combo costs about $5 more and they have to pack in a DVD and UV/DC as well. The DVD is bare bones. Most of the DVD catalog selling are SKU issued years ago. I don't think they were printing up many last year.
Order of magnitude is around $0.50 cents or less to add the extra DVDs in a combo pack and it sells for $5 or more at retail on average. Its higher margin and more profitable than a regular DVD unit sale.

DVDs are still being replicated for some evergreen titles and for new release packaging in multu movie packs etc. Also the new to Blu-ray release of a title is also now an occasion to re release a new version of the DVD version as well in a new sku.

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Also remember DVD sells a ton more new release TV shows than Blu-ray, and those have much higher margins than new theatrical releases.
Agreed. TV on DVD is also high margin. Special edition DVD and Blu-ray collectors editions are highest margins of all. Basically the higher the price the higher the margin as plastic and paper does not cost that much to create.
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Old 03-11-2012, 08:36 PM   #1924
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Not true. DVD catalog has been declining for years and very little comes out anymore. Most of that decline had already occurred.
The revenues from old DVD catalog sales continues to decline as their price points drop and lesser volumes are sold of those old releases. But that's a lot of the decline since 2007 as lower prices for DVD catalog per unit sale generate less revenues for the DVD format.


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I think more of the decline is in TV shows, as people are taking to watching those more on Netflix or other means more convenient. There is still plenty of margin in TV shows obviously.
I agree that's a hige part of the DVD revenue decline. TV on DVD revenues have dropped off a cliff in the past few years with mostly only new releases having any traction. Older TV on DVD box sets have also slowed in volume and command lower prices. Netflix and Hulu and other cloud based options are most of the reason besides the studios running out of good old stuff to release. Many consumers including myself find TV on Netflix to jest be an superior option to TV on DVD.
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Old 03-11-2012, 08:42 PM   #1925
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Originally Posted by Kosty View Post
Order of magnitude is around $0.50 cents or less to add the extra DVDs in a combo pack and it sells for $5 or more at retail on average. Its higher margin and more profitable than a regular DVD unit sale.
.
Woah, woah, woah. You've been quoted many times stating it costs merely "pennies" to add DVDs to Blu-ray cases. Now it's "$0.50" ? Wow! You gotta keep your lies intact sir.
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Old 03-11-2012, 08:47 PM   #1926
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Quote:
Originally Posted by Kosty
Blu-ray is increasing in sales while DVD is in decline. Combining the two is misleading in many ways. As long as higher margin Blu-ray sales continue to increase and have volumes better than EST the studios and retailers will continue to see Blu-ray as an important and successful new revenue stream that along with other new digital revenue streams will together be modern alternatives to offset the decline of DVD. No one revenue stream, or Blu-ray alone will replace DVD and everyone knows that.
Quote:
Combining the two is misleading only if you want to hide from the truth that OD is declining. As for margins, as Blu-ray gains marketshare, margins on the format decrease as well as price erosion affects the format over time. DVD doesn't have a monopoly in price erosion. In fact, I would say that Blu-ray is suffering greater price erosion than DVD is, as the prices have further to fall since they are higher to begin with. So in effect, the two formats in concert are seeing serious price erosion, mainly on catalog, new releases that are over 6 months old.
Overall price declines for Blu-ray have stabilized a lot since 4Q 2010 where the largest price decreases occurred.

2012 price levels continue to be much closer to 2011 Blu-ray average unit sold price levels than they were in the 2011 vs 2010 comparisons.

Retailers have now pretty much shifted to a full mass market pricing strategy for Blu-ray titles both for catalog and new releases as those prices should now be pretty stable for a few years. New release DVD prices have been more stable as well recently and its only older DVD titles price points that continue to decline but they probably cannot go that much lower than waht we see now.

Blu-ray prices for older catalog releases will continue to be in tiers with higher initial release and routine price points with lower discounted sale prices or value priced skus being in the mix on the shelves along with full MSRP titles. That way the perceived value of a Blu-ray movie to a consumer stays high anf the lower priced skus seem to be a greater value.

I'm sure retailers and the studios had hoped that Blu-ray catalog would have commanded a higher price once upon a time but prices are more stable now at market pricing and it is what it is.
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Old 03-11-2012, 08:51 PM   #1927
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Woah, woah, woah. You've been quoted many times stating it costs merely "pennies" to add DVDs to Blu-ray cases. Now it's "$0.50" ? Wow! You gotta keep your lies intact sir.
or less.

In general terms its pennies to add a extra DVD to a set as opposed to dollars. It only costs under $0.15 cents for a 3rd party replicator to add a second dual layer DVD9 to a 10,000 unit production run and it costs the studios less than that.

Why do you have to use the phrase "lies" again and again as its rude and baiting as well?

Why make a personally directed comment like that and start a confrontation out of the blue?

How about instead talk more about the actual issues being discussed?

Last edited by Kosty; 03-11-2012 at 08:55 PM..
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Old 03-11-2012, 09:14 PM   #1928
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or less.

In general terms its pennies to add a extra DVD to a set as opposed to dollars. It only costs under $0.15 cents for a 3rd party replicator to add a second dual layer DVD9 to a 10,000 unit production run and it costs the studios less than that.

Why do you have to use the phrase "lies" again and again as its rude and baiting as well?

Why make a personally directed comment like that and start a confrontation out of the blue?

How about instead talk more about the actual issues being discussed?
Oh, so now it;s only .15? You need to make your mind up on what it's going to be. That's what happens when you fib.

Now, that magical 0.15 covers creating a new menu for the featureless DVD right? And Artwork? And possibly a smaller encode?

Man, with prices that low it's amazing that studios are in such bad shape when they sell DVDs for $15!

Man, you are just out of this world. Please - stop trying to cry wolf. You've called me a liar many times even when I have facts to prove it. You, on the other hand, don't.
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Old 03-11-2012, 09:33 PM   #1929
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Oh, so now it;s only .15? You need to make your mind up on what it's going to be. That's what happens when you fib.

Now, that magical 0.15 covers creating a new menu for the featureless DVD right? And Artwork? And possibly a smaller encode?

Man, with prices that low it's amazing that studios are in such bad shape when they sell DVDs for $15!

Man, you are just out of this world. Please - stop trying to cry wolf. You've called me a liar many times even when I have facts to prove it. You, on the other hand, don't.
Its you that started a confrontation out of the air.

It obviously costs more to produce a DVD package than it does to add an extra replicated DVD disc into a combo package especially when all of the authoring and menuing is already paid for by the production of a DVD version sku.

The studios are doing volumes of 100,000s or millions of units so the cost to include a dual layer DVD9 is a fraction of these posted replication prices that anyone can get.

http://www.newcyberian.com/dvd9-replication.html

Quote:
DVD

10,000 $ 0.55 $ 5,500.00
Just here the Blu-ray prices drop substantially from 10,000 unit pricing to volumes of 100,000 unit pricing where the price drops an entire %0.40 cents in the quote. The studios are pressing millions of units or 10 times that volume.


Quote:
Blu-ray

10,000 $ 1.50 $ 15,000.00
25,000 $ 1.30 $ 32,500.00
50,000 $ 1.20 $ 60,000.00
100,000 $ 1.10 $ 110,000.00

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Old 03-11-2012, 09:44 PM   #1930
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Notice how rapidly the price drops with volume?

This is off the street pricing anyone can get without negotiation.

I can get much cheaper pricing from them.

I've seen pricing for smaller runs than the studios use in the twenty cents range for larger replication runs for corporate DVD production runs for mailing campaigns.

The studios with routine production of millions of units with dedicated relations pay a small fraction of those prices.



http://www.pacificdisc.com/PricingBulkDiscs.html

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Old 03-11-2012, 09:49 PM   #1931
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Now, that magical 0.15 covers creating a new menu for the featureless DVD right? And Artwork? And possibly a smaller encode?
Those are fized costs spread over hundreds of thousands or millions of discs.

It does not cost that much for those items for a DVD even if you allocate the total cost against the combo. That's order of magnitude of $10,000 of costs spread over 100,000s or 1,000,000s of discs. Those are fixed not variable costs in any case.

When a studio can get $5-$10 more per unit sold (shared with the retailer) and it cost less than a buck no matter how you figure it and the extra replication cost to insert a couple extra DVD discs in the package is dimes not dollars then heck yes a multiple disc combo is more profitable than a single disc DVD version.

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Old 03-11-2012, 10:33 PM   #1932
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In honor of Puss in Boots continuing to do well I came across this Old Spice Guy Spoof TV video spot:


http://www.youtube.com/watch?v=KivcTnThCBw
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Old 03-11-2012, 10:52 PM   #1933
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In honor of Puss in Boots continuing to do well I came across this Old Spice Guy Spoof TV video spot:
Nothing unusual about a Friday release being #1 two weeks in row.
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Old 03-11-2012, 11:33 PM   #1934
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Nothing unusual about a Friday release being #1 two weeks in row.
Exactly. Especially when there isn't much competition.
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Old 03-12-2012, 01:11 AM   #1935
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Nothing unusual about a Friday release being #1 two weeks in row.
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Exactly. Especially when there isn't much competition.
I didn't say Puss in Boots doing well was unusual or unexpected at all.

It did get some competition though from the Oscar winning Hugo though last week.

I just thought the Old Spice Man spoof was funny and you all might appreciate it.
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