The article you requested is available only to registered members. Registration is FREE.
I'm not signing up just to read 1 article.
pseudonym
11-27-05, 12:55 PM
I'm not signing up just to read 1 article.
This site (http://bugmenot.com) exists for just this kind of situation.
But for those who don't want to bother.....
DVDs in bargain bin: Good for sales?
By Elaine Dutka
Originally published November 27, 2005
Hollywood // Oh, the indignity of it all. Jimmy Stewart, despite his ties to Clarence the angel, has landed in the bargain bin for the holiday season. He's not alone. When it comes to DVD sales, Stewart and other stars of the Golden Age of Hollywood are leading the way in the race to the bottom.
This year, DVD sales, which studios count on to turn costly movies into mega-moneymakers, are experiencing a precipitous decline in growth. To counteract the plunge, home video executives are slashing prices.
Although new DVD releases have been relatively stable, hovering in the $15 to $25 range, other titles have dropped sharply. Austin Powers in Goldmember and the Lethal Weapon sequels can be picked up for just under $5 at Best Buy, and Wal-Mart is pricing Trading Places and Fatal Attraction among others at $5.50. Meanwhile, DVDs of primarily public domain movies, including some starring Stewart, Danny Kaye, Shirley Temple and the Three Stooges, are being marketed as affordable stocking stuffers in Target's $1 racks.
Not everyone agrees with the pricing strategy. Consumers become reluctant to fork out $25 for A-list titles when they're accustomed to paying a fraction of that, critics say. Dumping movies into bargain bins robs them of their identity and turns them into "commodities," said Barry Gordon, senior vice president of worldwide programming for Image Entertainment, a leading producer and distributor of independent fare.
The industry might be shooting itself in the foot, agreed Steve Beeks, president of Lions Gate Entertainment. "Price reduction is a sound part of any marketing strategy," he said, "but it's a matter of balance. You don't want to drop prices to maintain sales level - we're in it for the long run."
Part of the slowdown can be blamed on rising gas prices that cut into entertainment spending - and hurricanes Katrina, Rita and Wilma didn't help. But part can be attributed to weak theatrical releases and fewer hits and family-friendly blockbuster sequels that drive DVD sales.
According to the trade association DEG, DVD revenue that increased by 39 percent in 2003 and 32 percent in 2004 will expand by only about 8 percent this year. And with 52,000 titles on the market (11,500 released in 2005 alone), shoppers are more selective. Studios no longer can toss out a DVD and count on it striking gold.
"The challenges Hollywood faced attracting people to the box office have transferred to the DVD world," said Gary Arnold, senior vice president of entertainment at the Best Buy retail chain. "We've been less successful with consumers than we have been in years past."
At $25 billion annually, home video revenue is more than twice that of the box office, so double-digit growth is more elusive - particularly now that saturation has set in.
DVD players have become fixtures in 75 million of the nation's 110 million households as prices for the machines dropped to less than $50. Although consumers who have only recently switched to the DVD format bought more than expected, they are typically less affluent and less enthusiastic buyers. In an effort to step out from the rest of the pack, some studios - including Disney, Universal, Lions Gate and Fox - are releasing titles the Monday after Christmas, instead of the typical Tuesday release. Gaining an edge is a challenge in the fourth quarter, when more than a third of all software transactions occur.
Adding to the pressure, 50 percent of a DVD's sales takes place during its first week on the market - up from 40 percent two years ago. "Opening on DVD has become as cutthroat as opening in theaters," said Kevin Kasha, senior vice president of acquisitions and programming for New Line Home Entertainment. "If your product doesn't sell big in the first 30 days, you're often off the shelves."
Red-hot TV-on-DVDs, however, are a bright spot for the industry, now responsible for 25 percent of all home entertainment spending. And sales, according to Nielsen VideoScan, are expected to increase by 28 percent this year.
But there's a flip side, Best Buy's Arnold said. Watching a season's worth of Lost or Desperate Housewives is time-consuming, taking people out of the purchasing cycle.
Elaine Dutka writes for the Los Angeles Times.
Chris Tribbey
11-27-05, 01:31 PM
Here's the original, unedited version from Nov. 22 in the L.A. Times ...
Some big titles come with small price tags
By Elaine Dutka, Times Staff Writer
Oh, the indignity of it all. Jimmy Stewart, despite his ties to Clarence the angel, has landed in the bargain bin for the holiday season. He's not alone. When it comes to DVD sales, Stewart and other stars of the Golden Age of Hollywood are leading the way in the race to the bottom.
This year, DVD sales, which studios count on to turn costly movies into mega-moneymakers, are experiencing a precipitous decline in growth. To counteract the plunge, home video executives are slashing prices.
Though new DVD releases have been relatively stable, hovering in the $15 to $25 range, other titles have dropped sharply. "Austin Powers in Goldmember" and the "Lethal Weapon" sequels can be picked up for just under $5 at Best Buy, and Wal-Mart is pricing "Trading Places" and "Fatal Attraction" among others at $5.50. Meanwhile, DVDs of primarily public domain movies, including some starring Stewart, Danny Kaye, Shirley Temple and the Three Stooges, are being marketed as affordable stocking stuffers in Target's $1 racks.
The bargain-basement prices are a boon to many consumers. On a recent Tuesday at the Target store in Culver City, retired artist Charlene Tobias came in to buy the newly released "Madagascar" for her grandchild. Noticing the section of $1 titles, she spontaneously picked up three for herself.
Tobias said her kids gave her her first DVD player a few months ago, and she now has about 50 films in her collection.
"I'm a late arrival to DVDs but making up for lost time," she said. "Price is a consideration because I'm retired, but I don't just go for bargains. The title counts."
Not everyone agrees with the pricing strategy. Consumers become reluctant to fork out $25 for A-list titles when they're accustomed to paying a fraction of that, critics say. Dumping movies into bargain bins robs them of their identity and turns them into "commodities," said Barry Gordon, senior vice president of worldwide programming for Image Entertainment, a leading producer and distributor of independent fare.
The industry might be shooting itself in the foot, agreed Steve Beeks, president of Lions Gate Entertainment. "Price reduction is a sound part of any marketing strategy," he said, "but it's a matter of balance. You don't want to drop prices to maintain sales level — we're in it for the long run."
Part of the slowdown can be blamed on rising gas prices that cut into entertainment spending — and hurricanes Katrina, Rita and Wilma didn't help. But part can be attributed to weak theatrical releases and fewer hits and family-friendly blockbuster sequels that drive DVD sales.
According to the trade association DEG, DVD revenue that increased by 39% in 2003 and 32% in 2004 will expand by only about 8% this year. And with 52,000 titles on the market (11,500 released in 2005 alone), shoppers are more selective. Studios no longer can toss out a DVD and count on it striking gold.
"The challenges Hollywood faced attracting people to the box office have transferred to the DVD world," said Gary Arnold, senior vice president of entertainment at the Best Buy retail chain. "We've been less successful with consumers than we have been in years past."
Of more lasting concern are changes in a maturing business confronted with runaway success. At $25 billion annually, home video revenue is more than twice that of box office, so double-digit growth is more elusive — particularly now that saturation has set in.
DVD players have become fixtures in 75 million of the nation's 110 million households as prices for the machines dropped to less than $50. Although consumers who have only recently switched to the DVD format bought more than expected, they are typically less affluent and less enthusiastic buyers. And many of those who bought in early have begun tightening their belts as they watch their discs pile up.
"This is a natural progression," said DEG Executive Director Amy Jo Smith. The only surprise, she said, was how quickly the market saturation came.
Black Friday — retail speak for the day after Thanksgiving, the busiest shopping day of the year — is a chance to reverse some of that downturn, reaching a consumer who departs from the norm, said Mike Dunn, president of Fox Home Entertainment. Someone who gets up at 5:30 a.m. looking for a bargain gift isn't your typical home video consumer, he said. Because that shopper cares more about price than about a particular title, you're competing less with another DVD than with a Cuisinart or a sweater, he said.
Aggressive marketing increases the likelihood that the DVD will come out the winner. And, from a retail perspective, DVDs are perfect for Black Friday promotions, Best Buy's Arnold pointed out. Unlike computers, televisions and other big-ticket items, they're usually impulse buys. And, as loss leaders, they lure in customers who might then spring for a pricier purchase.
In an effort to step out from the rest of the pack, some studios — including Disney, Universal, Lions Gate and Fox — are releasing titles the Monday after Christmas, instead of the typical Tuesday release. Gaining an edge is a challenge in the fourth quarter, when more than a third of all software transactions occur. This season, heavy-hitters such as "Star Wars: Episode III Revenge of the Sith," "War of the Worlds," "Fantastic Four" and "March of the Penguins," just for starters, will compete for the consumer dollar.
Adding to the pressure, 50% of all of a DVD's sales takes place during its first week on the market — up from 40% two years ago. "Opening on DVD has become as cutthroat as opening in theaters," said Kevin Kasha, senior vice president of acquisitions and programming for New Line Home Entertainment. "Everything is fast and furious — perform or die. If your product doesn't sell big in the first 30 days, you're often off the shelves."
Past Black Friday promotions focused almost exclusively on catalog — or "library" titles. Not this year. Movies less than 12 months old are being discounted, including some of the biggest titles of the last five years. A spokesman for Warner Bros. noted that all "Harry Potter" DVDs will be available for $7 for a time at selected stores.
Red-hot TV-on-DVDs, however, are a bright spot for the industry, now responsible for 25% of all home entertainment spending. And sales, according to Nielsen VideoScan, are expected to increase by 28% this year. But there's a flip side, Best Buy's Arnold said. Watching a season's worth of "Lost" or "Desperate Housewives" is time-consuming, taking people out of the purchasing cycle.
Something to keep in mind, said Ralph Tribbey, editor of the newsletter DVD Release Report, is that even at 8% growth, the pie is $2 billion richer than last year. The industry is still the largest in the entertainment world, he said — and you can't take percentages to the bank.
But, no doubt, the rules have changed. "This has been a watershed year," he said. "We no longer have double digits to cover up our mistakes."
resinrats
11-27-05, 02:35 PM
Guess I'm just missing the point of the articles. So what if some movies get marked down? They probably have sold all they can at higher prices so the studios/stores mark these down to get a whole new set of people to buy them who wouldn't buy them at the higher price. So now studios will get money they wouldn't get otherwise. Seems like simple business to me.
Why is it such a shock that stars of the 30's-50's have their movies in the bargin bin? Most people today aren't fans of their movies since they are so old. The fans of these actores are few and far between so in order to get some money out of those moveis they have to be at a low price for people to consider blind buys. The famous movies are still priced normally. Wizard of Oz is still $15-$20 since it is famous. Judy Garland doesn't have other hits so her other movies will be bargin bin fodder. I'm sure in 40-50 years famous stars of today will be in bargin bins since they won't be famous anymore.
nightmaster
11-27-05, 02:48 PM
The industry might be shooting itself in the foot, agreed Steve Beeks, president of Lions Gate Entertainment. "Price reduction is a sound part of any marketing strategy," he said, "but it's a matter of balance. You don't want to drop prices to maintain sales level — we're in it for the long run."
Now there's a bureaucratic statement. "we're in it for the long run......that is, until we get those HD discs on the market and try to convince you to not buy cheap DVDs at all".......
Altimus Prime
11-27-05, 03:11 PM
Trading Places is only $5.50 at WalMart? Oh, the humanity! The indignity! The aromatherapy of it all! It's the END OF THE WORLD when such a fine, fine flick of the caliber of Trading Places - the kind of high concept art we don't see much anymore - can't command at least $30 for the mere priviledge of owning it!
I can't take it any more. I'm going back to bed and hope it was all a bad dream.
GuessWho
11-27-05, 03:34 PM
Guess I'm just missing the point of the articles.
If people get too used to buying movies for $5, then they'll theoretically balk at the idea of paying $15-20 for new releases and adopt a "I'll wait till it goes in the bin" metality.
Chris Tribbey
11-27-05, 04:48 PM
If people get too used to buying movies for $5, then they'll theoretically balk at the idea of paying $15-20 for new releases and adopt a "I'll wait till it goes in the bin" metality.
I think that all depends on what you're buying. Most still expect to shell out the $15-$30 for a new release of a popular movie with decent extras. But many of the REAL cheap titles are impulse buys near cash registers. You'll find Charlie and the Chocolate Factory marked down at some point, but you'll never find it in "the bin" with episodes of Green Acres.
eXcentris
11-27-05, 05:13 PM
If people get too used to buying movies for $5, then they'll theoretically balk at the idea of paying $15-20 for new releases and adopt a "I'll wait till it goes in the bin" metality.
Except that the prevailing mentality is "I can't wait and I must have this NOW!". At least for the more popular new releases.
Down
11-27-05, 06:09 PM
This site (http://bugmenot.com) exists for just this kind of situation.
Thanks for that link, should come in mighty handy.
NitroJMS
11-27-05, 06:10 PM
I think that all depends on what you're buying. Most still expect to shell out the $15-$30 for a new release of a popular movie with decent extras. But many of the REAL cheap titles are impulse buys near cash registers. You'll find Charlie and the Chocolate Factory marked down at some point, but you'll never find it in "the bin" with episodes of Green Acres.
Charlie will be in the bargain bin someday. I never expected to see A-list titles like Apollo 13, Austin Powers, Harry Potter, Lord of the Rings, Catch Me If You Can, and Minority Report in bargain bins, but all have had their place their in just the past few weeks.
I've basically given up buying new releases right off the bat unless they are something along the lines of Star Wars, where I absolutely want it immediately. I've learned if you wait 6 months, most titles will get a price drop down to $14.99, which means Circuit City or Best Buy will have them as part of a 2 for $20 almost immediately after their drop. It used to be that titles would stay in the $20 dollar range for years after release, and finally drop down to $15 after a long period, but those days are gone. There's just no reason to buy a new release anymore when you can get it for 10 dollars or less if you wait 6-12 months after release.
shacmasta
11-27-05, 06:26 PM
If people get too used to buying movies for $5, then they'll theoretically balk at the idea of paying $15-20 for new releases and adopt a "I'll wait till it goes in the bin" metality.
I actually have already adopted that mentality. I think it all started when i got a fresh order from amazon, only to see 6 of the titles in my order in the best buy 2 for 20 sale in the following weeks ad. :hairpull:
Eddie W
11-27-05, 06:27 PM
Typical glass-half-empty mentality of the entertainment industry. Although there's a 25 billion dollar a year sell-through market that practically didn't exist 8 years ago, they're focused on how much money they're not going to make.
Qui Gon Jim
11-27-05, 07:05 PM
I won't pay more than $8 for a DVD aside from a deluxe set, box set or something I really can't wait for like SW or LotR.
Between CH and PV sales there is no reason to pay more. I always wrinkle my brow when people proclaim that excellent deal at BB for $15 on this weeks new DVD. I'll wait a month and get it for far less. I look for deals on EVERYTHING.
illennium
11-27-05, 08:24 PM
GameStop has devalued DVDs for me. Now it's hard for me to pay more than $6 for a new release film or $18 for a box set. I pretty much only buy Criterions new.
mifuneral
11-27-05, 09:01 PM
GameStop has devalued DVDs for me. Now it's hard for me to pay more than $6 for a new release film or $18 for a box set. I pretty much only buy Criterions new.
In what way has Gamestop affected your purchasing habits? Is it because you sell dvds to them, or buy movies from them (ie- b2g1)? I've seen the movies they sell, and none of them look even remotely interesting to me. I'll gladly pay $17 for a movie I know I love as opposed to three $6 shitty movies sold at Gamestop "just because they're cheap."
Ravid
11-27-05, 11:29 PM
Charlie will be in the bargain bin someday. I never expected to see A-list titles like Apollo 13, Austin Powers, Harry Potter, Lord of the Rings, Catch Me If You Can, and Minority Report in bargain bins, but all have had their place their in just the past few weeks.
Black Friday sales don't count :)
No GameStop I've been to has had anything that was remotely interesting to me. They mostly had stuff that you can buy at any Blockbuster, and the GS prices weren't particulary good either.
I bought quite a few DVDs on Black Friday, so I won't be buying any DVDs for a while. The TV sets I got were ones that I wanted but wouldn't have bought at regular price since I'm cheap.
pro-bassoonist
11-28-05, 12:13 AM
If people get too used to buying movies for $5, then they'll theoretically balk at the idea of paying $15-20 for new releases and adopt a "I'll wait till it goes in the bin" metality.
Not to sound like a snob but 99.99% of the titles the article claims are too cheap hold no interest for me whatsoever. Quite frankly even if they were 1.99$ I would still not buy them. With this said, I am willing to pay "regular" prices, whatever that is supposed to mean, if restoration, proper presentation, and valuable extras are being offered. With other words, I have no problem paying 20-25$ for a quality release, hence my addiction of importing, but let it be a film that holds my interest presented properly...something the R1 market with the exception of Criterion and mostly WB (give or take a few indies) lacks more and more as far as I am concerned. It is mostly mainstream Hollywood productions the stores are marking down...sounds about right to me :up:
Ciao,
Pro-B
mndtrp
11-28-05, 02:17 AM
If a new release has good extras, I'll pick it up for the first-week-release price. Otherwise, I'll wait and get it in a deal. I'll use the bargain bin for Godzilla movies, or other such fare, as those aren't really worth anything over $5.
For instance, I'll wait for Charlie and the Chocolate Factory to drop in price, simply because there isn't a commentary track on it. That is what I was most interested in, at this point. I can wait to buy it now, since I've already seen the movie recently.
There is always a plateau, and most businesses can't seem to realize that. Once the HD-DVD or whatever comes out, there will be a slow buildup, and then a burst of buying. After a while, that will slow down as well. It happens with everything, everytime.
fryinpan1
11-28-05, 06:47 AM
If people get too used to buying movies for $5, then they'll theoretically balk at the idea of paying $15-20 for new releases and adopt a "I'll wait till it goes in the bin" metality.
DVDs are completely devalued to me and not worth $15-20 thanks to Columbia House and other online deals:). Including new releases, I do not expect to pay more than $5 to $8 per DVD on average. I expect to pay a little more for gift sets, tv sets, and non-CH titles like Fox, Miramax, etc.
Fincher Fan
11-28-05, 06:58 AM
I remember when $10-$15 was a bargain and now I hesitate at anything over $10.
The Bus
11-28-05, 07:16 AM
It's the END OF THE WORLD when such a fine, fine flick of the caliber of Trading Places - the kind of high concept art we don't see much anymore - can't command at least $30 for the mere priviledge of owning it!
:lol: 5/5 :up: :up:
DVD Josh
11-28-05, 07:58 AM
Trading Places is only $5.50 at WalMart? Oh, the humanity! The indignity! The aromatherapy of it all! It's the END OF THE WORLD when such a fine, fine flick of the caliber of Trading Places - the kind of high concept art we don't see much anymore - can't command at least $30 for the mere priviledge of owning it!
I can't take it any more. I'm going back to bed and hope it was all a bad dream.
I like Trading Places :(
nightmaster
11-28-05, 08:21 AM
I've been doing the pawn shops for DVDs for years. As the retail prices drop so do the used prices. If it's something I want right now I'll spend the money on release week, otherwise I can wait till I find a deal. My local pawn has already stuck 2 copies of Batman Begins on the shelves, so why not wait and save $10?
jrsl76
11-28-05, 08:45 AM
I like how the gentleman from Best Buy indicates that they have noticed less sales than in previous years. My guess is that's because they have started to charge more than they used to. Titles that used to be $19.99 are now $21.99, discount titles available elsewhere for $5.99 or $9.99 are sold there for $6.99 and $10.99/$11.99. They keep trying to squeeze a little more from consumers, not discounting quite as much on release week, and so I'm glad they are feeling to crunch. I hope it shows them what some of that extra greed lends itself to.
boredsilly
11-28-05, 08:55 AM
Gamestop has some decent prices, but the cases are usually so jacked up that I can't help but wonder what type of condition the dvd is in, so I've never bought any dvds from them.
Hollywood needs to calm down. Turns out dvds aren't a bottomless pit of money? The horror.
Altimus Prime
11-28-05, 11:04 AM
I like Trading Places :(
Well, I like it too.
But... for an old, bare bones release of an old comedy like that, is it really any surprise that it can be had for $5.50? Of all the examples to point out, why that one? I've seen Trading Places in the "bargain bins" for years now.
illennium
11-28-05, 09:29 PM
In what way has Gamestop affected your purchasing habits? Is it because you sell dvds to them, or buy movies from them (ie- b2g1)? I've seen the movies they sell, and none of them look even remotely interesting to me. I'll gladly pay $17 for a movie I know I love as opposed to three $6 shitty movies sold at Gamestop "just because they're cheap."
Then the GameStops in your area just aren't very good. I looked through your collection, which is pretty mainstream, and most of what you have is available at the GameStops in my area. In fact, my collection is fairly similar to yours (although I have more European and less Asian cinema, and virtually no anime) and I've built it up in large part thanks to GameStop.
Eve Brown
11-28-05, 11:27 PM
Unless its a tv or movie set, I will wait to get it for $10 or less. The prices drop so fast i see no need to rush out and buy a movie right away that will probably sit in my cases waiting to be watched.
nightmaster
11-29-05, 01:00 AM
I like how the gentleman from Best Buy indicates that they have noticed less sales than in previous years. My guess is that's because they have started to charge more than they used to. Titles that used to be $19.99 are now $21.99, discount titles available elsewhere for $5.99 or $9.99 are sold there for $6.99 and $10.99/$11.99. They keep trying to squeeze a little more from consumers, not discounting quite as much on release week, and so I'm glad they are feeling to crunch. I hope it shows them what some of that extra greed lends itself to.
I agree with your post, but my guess is they aren't feeling a crunch- they just want more of the banner type profits they were seeing a year or two ago, and again, with the boom of TV on DVD sales, I'm not sure they aren't seeing those numbers anyway.
Pretty soon the bottom is going to fall out, hence I think they're rushing to get as much product on the shelves as they can before the advent of an HD disc format, where they hope they'll get people to double dip all over again.
Buy: