Movie Studios think your not paying enough for DVDs.
11-21-03, 01:15 AM
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Movie Studios think your not paying enough for DVDs.
Yahoo News story: As loss leadering grows, studios and retailers fear the strategy will devalue DVDs in the eyes of consumers.
http://story.news.yahoo.com/news?tmp...nm/film_dvd_dc
Some Quotes:
"The risk is that consumers start to think that the opening price point for a DVD is $15," says Bob Chapek, president of Buena Vista Home Entertainment.
Consumers are not even demanding lower prices, says Kelly Sooter, head of domestic marketing for DreamWorks Home Entertainment.
Zane Plsek, director of video for the Torrance, Calif.-based Wherehouse chain. "Mass merchants' predatory $14.99 prices on new releases are three or four dollars below cost. We go out at MAP pricing, which is $19.99 in most cases. We have already adjusted how we purchase some major titles based on what we think the price on the street is going to be."
http://story.news.yahoo.com/news?tmp...nm/film_dvd_dc
Some Quotes:
"The risk is that consumers start to think that the opening price point for a DVD is $15," says Bob Chapek, president of Buena Vista Home Entertainment.
Consumers are not even demanding lower prices, says Kelly Sooter, head of domestic marketing for DreamWorks Home Entertainment.
Zane Plsek, director of video for the Torrance, Calif.-based Wherehouse chain. "Mass merchants' predatory $14.99 prices on new releases are three or four dollars below cost. We go out at MAP pricing, which is $19.99 in most cases. We have already adjusted how we purchase some major titles based on what we think the price on the street is going to be."
11-21-03, 01:22 AM
#2
DVD Talk Limited Edition
Figures the Wherehouse and Virgin Megastores are the ones complaining. They'd love it if all stores charged as much for DVDs as they do. I wouldn't love it. 
Rob
Rob
11-21-03, 01:39 AM
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Re: Movie Studios think your not paying enough for DVDs.
Originally posted by zoid
Consumers are not even demanding lower prices, says Kelly Sooter, head of domestic marketing for DreamWorks Home Entertainment.
Consumers are not even demanding lower prices, says Kelly Sooter, head of domestic marketing for DreamWorks Home Entertainment.
I can't believe they are even writing about this. They is no way they can mess with the prices now so why even bother wasting the time and energy on the article.
11-21-03, 01:44 AM
#4
DVD Talk Limited Edition
If I could not get good deals on DVDs, I would not buy them.
People are not screaming for lower price because the price are already low.
Even TTT is a great deal at 24.99, you get four disks and about 3 days of entertainment.
Raise price and kill the beast.
People are not screaming for lower price because the price are already low.
Even TTT is a great deal at 24.99, you get four disks and about 3 days of entertainment.
Raise price and kill the beast.
Last edited by Iron_Giant; 11-21-03 at 04:58 PM.
11-21-03, 01:50 AM
#5
DVD Talk Special Edition
What else is new, another way for studios to kill a golden goose. They did it emphasizing first week profits and blockbusters and killed off smaller films, and now they can kill their major revenue stream of DVD's. Look, I'll buy Catch Me if You Can for 16 bucks the first week, but I won't drop 25 on it. Maybe another guy would, but in the end, they're throwing away the extra 7 dollars on a product that costs less than a dollar to produce. I wish DVD handn't blown up like this, and I was late to the DVD party, but now these A-holes want to charge more money for less extras and full screen discs. What's wrong with making 15 bucks on a disc? It's clearly been a better business model than to sell thru to rental.
11-21-03, 01:53 AM
#6
DVD Talk Limited Edition
I HATE when new things I want come out and cost $20 or so, I'm much more likely to buy at that $15 price point (better yet, $10 since anything more ups my average price 
)
)
11-21-03, 01:59 AM
#7
DVD Talk Gold Edition
Originally posted by Iron_Giant
If I could not get good deals on DVDs, I would not buy them.
Peopel are not screaming for lower price because the price are already low.
Even TTT is a great deal at 24.99, you get for disks and about 3 days of entertainment.
Raise price and kill the beast.
If I could not get good deals on DVDs, I would not buy them.
Peopel are not screaming for lower price because the price are already low.
Even TTT is a great deal at 24.99, you get for disks and about 3 days of entertainment.
Raise price and kill the beast.
If I couldn't get dvd's for $10 I would rather rent all but a select few over the next several years 2-3 times rather than buy. Still save a lot of money over the long run and doesn't affect my viewing habits. I can only imagine that is magnified with the average consumer that doesn't count movies as a passion also.
Last edited by abintra; 11-21-03 at 02:02 AM.
11-21-03, 02:12 AM
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This is the kind of penny wise, pound foolish thinking that has driven the RIAA into the ditch, continuing to gouge people w/ overpriced CDs while downloading and rapidly advancing technology use them as a urinal cake.
11-21-03, 02:43 AM
#10
DVD Talk Limited Edition
These guys will bitch about the prices yet gloat when thier movies sell 10 trillion copies the first week. Indeed they need to shut thier holes.
$15 to 20 is an acceptable price to pay for a new movie, its a small amount and its inside that "impluse buy" range....$10 more and you fall into the "well, do i REALLY want that movie?" range.
$15 to 20 is an acceptable price to pay for a new movie, its a small amount and its inside that "impluse buy" range....$10 more and you fall into the "well, do i REALLY want that movie?" range.
11-21-03, 02:51 AM
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The cost of a DVD as it stands is already too much! Take the comparison of a game, which are mostly 39.99. Consider the playability of a game and a movie. Most cases people do not watch a movie over and over, at most, probably 2-3 times a month and that's pushing it! A game I can play for quite a long time.
Most movies make up what it costs to make in their theatrical release, so any profits in DVD sales is icing on the cake. Asking for more would be grand larceny, but then again I never expected any less from greedy faceless corps.
Most movies make up what it costs to make in their theatrical release, so any profits in DVD sales is icing on the cake. Asking for more would be grand larceny, but then again I never expected any less from greedy faceless corps.
11-21-03, 03:11 AM
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Originally posted by Buck Turgidson
This is the kind of penny wise, pound foolish thinking that has driven the RIAA into the ditch, continuing to gouge people w/ overpriced CDs while downloading and rapidly advancing technology use them as a urinal cake.
This is the kind of penny wise, pound foolish thinking that has driven the RIAA into the ditch, continuing to gouge people w/ overpriced CDs while downloading and rapidly advancing technology use them as a urinal cake.
Well, if they do decide to do it and their profits drop, they could always blame "the downloaders"..
11-21-03, 06:24 AM
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I noticed a few big errors in this article, the major one being that they say Fox released The Hulk. The price comparisons seem really off as well.
Seems like a big article about nothing. Customers want low prices, stores want to make the most money possible, this is new?
Seems like a big article about nothing. Customers want low prices, stores want to make the most money possible, this is new?
11-21-03, 10:12 AM
#14
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$15 is "three or four dollars below cost"?????? 
I call bullocks....this is just a couple of the big chains that like to charge MSRP bitching about stores who actually have competitive (and fair) prices...they can suck my balls. Perhaps the Wherehouse chain should stop trying to gouge its customers on everything...$17.99 for a cd? bite me...
I call bullocks....this is just a couple of the big chains that like to charge MSRP bitching about stores who actually have competitive (and fair) prices...they can suck my balls. Perhaps the Wherehouse chain should stop trying to gouge its customers on everything...$17.99 for a cd? bite me...
11-21-03, 10:21 AM
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$15 is "three or four dollars below cost"??????
I call bullocks....
I call bullocks....
A personal friend happens to run (formerly own) an internet DVD company. Yes, on average, wholesale price on the vast majority of DVDs runs $17 to $20.
The practice of selling below cost is not new to DVD. It is called (as was mentioned in the quoted article) "loss leadering". Walmart (for instance) advertises whatever hot new DVD for a super cheap price to get you into the store hoping you will buy enough other shit to make up for the couple of bucks they lost on the DVD.
That's one way to do business, but it isn't feasible for companies that might actually specialize in a specific product that gets loss leadered by mass market retailers. So, in the end, you lose the companies that can service a specialized product like DVD and you get left with scumbags like Walmart.
11-21-03, 10:26 AM
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I can't believe they are saying this. All of the studios are raking in major dinero from home video sales. You can't believe that profits that they are raking in. Stupid idiots.
11-21-03, 10:57 AM
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Originally posted by Robert George
Call bullocks all you want but unless you know what you are talking about (you don't), then it is just so much hot air.
A personal friend happens to run (formerly own) an internet DVD company. Yes, on average, wholesale price on the vast majority of DVDs runs $17 to $20.
The practice of selling below cost is not new to DVD. It is called (as was mentioned in the quoted article) "loss leadering". Walmart (for instance) advertises whatever hot new DVD for a super cheap price to get you into the store hoping you will buy enough other shit to make up for the couple of bucks they lost on the DVD.
That's one way to do business, but it isn't feasible for companies that might actually specialize in a specific product that gets loss leadered by mass market retailers. So, in the end, you lose the companies that can service a specialized product like DVD and you get left with scumbags like Walmart.
Call bullocks all you want but unless you know what you are talking about (you don't), then it is just so much hot air.
A personal friend happens to run (formerly own) an internet DVD company. Yes, on average, wholesale price on the vast majority of DVDs runs $17 to $20.
The practice of selling below cost is not new to DVD. It is called (as was mentioned in the quoted article) "loss leadering". Walmart (for instance) advertises whatever hot new DVD for a super cheap price to get you into the store hoping you will buy enough other shit to make up for the couple of bucks they lost on the DVD.
That's one way to do business, but it isn't feasible for companies that might actually specialize in a specific product that gets loss leadered by mass market retailers. So, in the end, you lose the companies that can service a specialized product like DVD and you get left with scumbags like Walmart.
11-21-03, 11:01 AM
#21
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Quantity over quality, kind of.
They can either [try to] sell one DVD, which costs, say, 14.00 to get to a store, for 1,000,000 dollars and make a bunch of money, or sell that same dvd for 14.99, sell a million of them, and still make money.
The article seems to be somewhat misleading--it discusses the DVD production companies, and the DVD sellers, who have two different agendas here.
The DVD production companies probably don't care about loss leadering--they want to sell the disk to the store itself. Once the store gets it, they may well sell it for less than they paid, precisely for the reason Robert George said. Very few people [other than those who are concerned about dvd's enough to post on a board like this] are going to go to WalMart and buy *just* a 12.99 DVD. If they buy one 20-oz Coke on the way out, WM netted a profit.
Now, I have no idea how places like Wherehouse, Turtles, Blockbuster Music, Sam Goody even stay in business--the last CD's I bought were: online, 12.99; B&M-21.99, but it was a 3 disk import box set. I cannot make myself pay 17.99 for a CD, especially when a DVD costs less than that [usually]. [Plus, I'm not at all impressed by most 'new music', so that's another issue.]
And again, psychologically, 14-19 bucks is a 'good' impulse price, 21-30 takes a little more thinking about whether to buy or not, usually.
And of course IANAL, but isn't the 'MAP' somewhat like price fixing or collusion? By putting 'Hot Price' on the ad rather than 14.99, Best Buy avoids that problem, and it's their problem whether or not everyone who comes to the store buys only the DVD, or that DVD and something else.
Can retailers return unsold DVD's to the vendor? I know in some industries that can occur, which provides the retailer a little more flexibility in price.
I don't understand why the DVD release companies are complaining. They make a DVD, they charge X for it. Everyone [except WM, who probably has sweetheart deals with every company] pays X for it. What business is it of the release company is BB sells it for X + 5 or X - 5?
Virgin, Wherehouse, etc, they're complaining because they either can't or won't compete with BB's loss leadering. Free market, deal with it. I'm surprised those places are still in business--the only advantage I can see in them, is if they had a greater selection, but I can never find anything I'm looking for in those stores [the few times I do go into them.] And if I order online, I'm not going to pay their mall prices.
They can either [try to] sell one DVD, which costs, say, 14.00 to get to a store, for 1,000,000 dollars and make a bunch of money, or sell that same dvd for 14.99, sell a million of them, and still make money.
The article seems to be somewhat misleading--it discusses the DVD production companies, and the DVD sellers, who have two different agendas here.
The DVD production companies probably don't care about loss leadering--they want to sell the disk to the store itself. Once the store gets it, they may well sell it for less than they paid, precisely for the reason Robert George said. Very few people [other than those who are concerned about dvd's enough to post on a board like this] are going to go to WalMart and buy *just* a 12.99 DVD. If they buy one 20-oz Coke on the way out, WM netted a profit.
Now, I have no idea how places like Wherehouse, Turtles, Blockbuster Music, Sam Goody even stay in business--the last CD's I bought were: online, 12.99; B&M-21.99, but it was a 3 disk import box set. I cannot make myself pay 17.99 for a CD, especially when a DVD costs less than that [usually]. [Plus, I'm not at all impressed by most 'new music', so that's another issue.]
And again, psychologically, 14-19 bucks is a 'good' impulse price, 21-30 takes a little more thinking about whether to buy or not, usually.
And of course IANAL, but isn't the 'MAP' somewhat like price fixing or collusion? By putting 'Hot Price' on the ad rather than 14.99, Best Buy avoids that problem, and it's their problem whether or not everyone who comes to the store buys only the DVD, or that DVD and something else.
Can retailers return unsold DVD's to the vendor? I know in some industries that can occur, which provides the retailer a little more flexibility in price.
I don't understand why the DVD release companies are complaining. They make a DVD, they charge X for it. Everyone [except WM, who probably has sweetheart deals with every company] pays X for it. What business is it of the release company is BB sells it for X + 5 or X - 5?
Virgin, Wherehouse, etc, they're complaining because they either can't or won't compete with BB's loss leadering. Free market, deal with it. I'm surprised those places are still in business--the only advantage I can see in them, is if they had a greater selection, but I can never find anything I'm looking for in those stores [the few times I do go into them.] And if I order online, I'm not going to pay their mall prices.
11-21-03, 11:32 AM
#22
DVD Talk Limited Edition
If Wherehouse goes down the drain, all the better. I'm going to buy a disc for the lowest price I can find period. Do Wherehouse and other specialty stores honestly think I'm going to pay a few extra dollars so they can have retail welfare? To hell with them...
11-21-03, 12:13 PM
#24
DVD Talk Gold Edition
I don't understand why the DVD release companies are complaining. They make a DVD, they charge X for it. Everyone [except WM, who probably has sweetheart deals with every company] pays X for it. What business is it of the release company is BB sells it for X + 5 or X - 5?
11-21-03, 02:09 PM
#25
DVD Talk Legend
Re: Movie Studios think your not paying enough for DVDs.
Originally posted by zoid
Consumers are not even demanding lower prices, says Kelly Sooter, head of domestic marketing for DreamWorks Home Entertainment.
Consumers are not even demanding lower prices, says Kelly Sooter, head of domestic marketing for DreamWorks Home Entertainment.