DVD Talk Talk about DVDs and Movies on DVD including Covers and Cases

Doubting DVD disc sales decline...

Old 07-27-05, 10:41 AM
  #1  
DVD Talk Special Edition
Thread Starter
 
Join Date: Feb 1999
Location: North America
Posts: 1,296
Doubting DVD disc sales decline...

Yesterday, Release Day, I went to a "mega" Best Buy in my area after work. Now it was about 6-6:30 p.m. and they had sold-out of ST: Enterprise, they had one copy of the second season of The Brady Bunch and only two copies of the second season of Mary Tyler Moore. If sales are declining so much why are $100 TV shows flying off the shelves? Why is a so-so kid’s show from the 70s, now thanks to my purchase, sold-out? Why after MTM season one sold so poorly is it probably sold-out today? OK, the price reduction on MTM is one factor, but these sets appeal to vastly different audiences. I'm not buying the studio complaints of declining DVD revenue. People are simply shifting to TV shows.

Any other ideas out there?

Last edited by Duality; 07-27-05 at 10:45 AM.
Duality is offline  
Old 07-27-05, 11:00 AM
  #2  
DVD Talk Ultimate Edition
 
Join Date: Jan 2000
Location: South Central PA
Posts: 4,241
Well how many of each did they stock to begin the day? If they only had a few of each on hand, then it's really not a big deal to sell out.
jiggyblau is offline  
Old 07-27-05, 11:00 AM
  #3  
DVD Talk Ultimate Edition
 
Join Date: May 2004
Location: Dallas, TX
Posts: 4,582
Originally Posted by Duality
I'm not buying the studio complaints of declining DVD revenue.

Any other ideas out there?
I havent read much about this, but Ive read some. I think maybe they are complaining of a decline in the increase of sales. It is leveling out finally.

Companies always shoot for increases. Like having better sales numbers than last year. In this case, most people have DVD players already. The DVD boom has come to an end. It is now an accepted, widespread format.

Just my thoughts.
RockStrongo is offline  
Old 07-27-05, 11:02 AM
  #4  
Suspended
 
Join Date: Jan 2003
Location: Florida
Posts: 4,790
The DVD market has leveled off. Now, all the established DVD homes have more product to choose from, and sales are diluted as a result. Simple. It's no catastrophe like Hollywood wants us to think.
lotsofdvds is offline  
Old 07-27-05, 11:03 AM
  #5  
DVD Talk Hall of Fame
 
Join Date: Dec 2002
Location: Oklahoma, USA
Posts: 8,494
Sales aren't declining, they're just increasing at a decreasing rate.
Joe Molotov is offline  
Old 07-27-05, 11:08 AM
  #6  
DVD Talk Ultimate Edition
 
Join Date: May 2004
Location: Dallas, TX
Posts: 4,582
Originally Posted by Joe Molotov
Sales aren't declining, they're just increasing at a decreasing rate.
It reminds me of when politicians say that the other party is cutting a program (like school lunches for kids in the 90s!).

When in truth, they wanted to cut the percentage of the increase in spending for such programs.
RockStrongo is offline  
Old 07-27-05, 11:14 AM
  #7  
DVD Talk Special Edition
Thread Starter
 
Join Date: Feb 1999
Location: North America
Posts: 1,296
Originally Posted by jiggyblau
Well how many of each did they stock to begin the day? If they only had a few of each on hand, then it's really not a big deal to sell out.
This store usually stocks ten or twelve Star Trek units. Since they had eight of the first season Brady Bunch, I'm guessing they stocked at least that many of the second season. MTM initially had six copies from what I could tell. So, the product was there. This is why I'm curious.
Duality is offline  
Old 07-27-05, 11:20 AM
  #8  
DVD Talk Platinum Edition
 
Join Date: Mar 2003
Location: NYC
Posts: 3,192
Originally Posted by Duality
Since they had eight of the first season Brady Bunch, I'm guessing they stocked at least that many of the second season.
Not that this is material in any way, but what is the reasoning behind that assumption?
illennium is offline  
Old 07-27-05, 11:40 AM
  #9  
DVD Talk Special Edition
Thread Starter
 
Join Date: Feb 1999
Location: North America
Posts: 1,296
Originally Posted by illennium
Not that this is material in any way, but what is the reasoning behind that assumption?
Well the following is why: Shelf space - huge empty space next to season one, a deal on buying both that they are running and I spoke with a not-too-knowledgeable, but nice clerk.
Duality is offline  
Old 07-27-05, 12:42 PM
  #10  
DVD Talk Limited Edition
 
Join Date: Mar 2002
Location: Mpls, MN
Posts: 6,831
You can't base ANY conclusions about sales on a glance at the shelf.
Spiky is offline  
Old 07-27-05, 01:33 PM
  #11  
DVD Talk Legend
 
Join Date: Apr 1999
Location: Docking Bay 94
Posts: 14,259
A few comments:

1. Looking at a single Best Buy store isn't going to tell you *anything* about general sales trends. Maybe the demographic in that particular neighborhood just lends itself more to DVD purchases than the nation as a whole.

2. TV-on-DVD is one of the areas of home video sales that has seen radical INCREASES in the past couple of years, not decreases. That's why we've seen such a flood of TV titles recently... it's helping to prop up slumping sales for studios. Every title you mention is a TV title.

3. You have to put the "DVD disc sales decline" in perspective. All that is happening is that there is little growth in the market (everyone has a DVD player now) and the vast majority of "must have" catalog titles are released. Sales are now based on new release titles and major re-releases (Wizard of Oz, Titanic, etc.) Studios aren't crying poverty, they are just looking for ways to continue the revenue stream given the reduced sales due to the facts above.
bboisvert is offline  
Old 07-27-05, 01:42 PM
  #12  
DVD Talk Ultimate Edition
 
Join Date: May 2004
Location: Dallas, TX
Posts: 4,582
Originally Posted by bboisvert
3. You have to put the "DVD disc sales decline" in perspective. All that is happening is that there is little growth in the market (everyone has a DVD player now) and the vast majority of "must have" catalog titles are released. Sales are now based on new release titles and major re-releases (Wizard of Oz, Titanic, etc.) Studios aren't crying poverty, they are just looking for ways to continue the revenue stream given the reduced sales due to the facts above.
Oh so right....and their double dipping is not garnering the same percentage as an initial release does.

No matter how many times they market and sell Predator
RockStrongo is offline  
Old 07-27-05, 01:47 PM
  #13  
DVD Talk Platinum Edition
 
Join Date: Mar 2000
Location: Astoria, NY, USA
Posts: 3,333
The vast majority of people I spoke to here in New York City voted for John Kerry. I doubt that George W. Bush won the election.

DJ
djtoell is offline  
Old 07-27-05, 05:13 PM
  #14  
DVD Talk Legend
 
calhoun07's Avatar
 
Join Date: Oct 2001
Posts: 14,402
Originally Posted by Duality
Yesterday, Release Day, I went to a "mega" Best Buy in my area after work. Now it was about 6-6:30 p.m. and they had sold-out of ST: Enterprise, they had one copy of the second season of The Brady Bunch and only two copies of the second season of Mary Tyler Moore. If sales are declining so much why are $100 TV shows flying off the shelves? Why is a so-so kid’s show from the 70s, now thanks to my purchase, sold-out? Why after MTM season one sold so poorly is it probably sold-out today? OK, the price reduction on MTM is one factor, but these sets appeal to vastly different audiences. I'm not buying the studio complaints of declining DVD revenue. People are simply shifting to TV shows.

Any other ideas out there?
You say those appeal to vastly different audiences, but yet I would buy all three of those, and you bought all three of those. Maybe it's not so vastly different as you thought?
calhoun07 is offline  
Old 07-27-05, 05:29 PM
  #15  
DVD Talk Special Edition
Thread Starter
 
Join Date: Feb 1999
Location: North America
Posts: 1,296
Originally Posted by calhoun07
You say those appeal to vastly different audiences, but yet I would buy all three of those, and you bought all three of those. Maybe it's not so vastly different as you thought?
That's a great point. I guess I think of myself as a truly unique, eclectic person.
Duality is offline  
Old 07-27-05, 06:06 PM
  #16  
DVD Talk Hall of Fame
 
Join Date: Nov 1999
Location: Vermont
Posts: 9,774
Reports of declining DVD sales figures would seem to be complete crap.

http://slate.msn.com/id/2123286

Hollywood's Death Spiral
The secret numbers tell the story.
By Edward Jay Epstein
Posted Monday, July 25, 2005, at 11:48 AM PT



The screenwriter William Goldman famously explained Hollywood this way: "Nobody knows anything." He is right—up to a point. The six giants that dominate the industry (Fox, Time Warner, Sony, NBC-Universal, Paramount, and Disney) do not break down the sources of their revenues—even in their annual reports—into clear-cut categories such as theatrical release or DVD sales. Instead, they lump their revenues into vague, larger categories such as "entertainment." In the case of Paramount, this category includes earnings not only from a movie's theatrical run and DVDs, but also from theme parks, foreign movie theaters, music publishing, and library sales to television.

Even though the studios do not provide a road map for outsiders to the precise sources of their wealth, the real numbers are available in Hollywood. Indeed, every 90 days, each major studio sends a precise breakdown of all its revenue from all its worldwide sources, including movie theaters, video distributors, and television stations, to a secretive unit of the Motion Picture Association called Worldwide Market Research, located in Encino, Calif. The unit combines the data into an All Media Revenue Report and sends it to a limited number of top executives. As the studios' trade organization, the MPA presumably can circulate such secret data without running afoul of antitrust laws. With this report, the studio executives have a benchmark with which they can compare their performance to that of other studios in the various markets. For example, Fox executives can see how Fox DVD sales in Finland stack up against their competitors. Studios go to some lengths to keep this data discreet—each page is stamped "Strictly Confidential—Not For Further Distribution"—and, in the best Hollywood tradition of keeping audiences in the dark, the report is not made available to newspapers, industry newsletters, or Wall Street analysts.

Without such information, however, it is impossible to render an accurate picture of Hollywood. Consider how earlier this year entertainment journalists rattled on for months about a slump in the American box office—"Box Office Slump In Its 19th Week"—as if it were a sporting event in which the Hollywood studios couldn't get winning hits. The story would have been different if they had seen the data on Page 16 in the 2005 Three Month Revenue Report. (Click here for that page.) Instead of a box-office decline, the studios actually took in more from the U.S. box office in the first quarter of 2005 ($870.2 million) than they did in the similar period of 2004 ($797.1 million). So even though the total audience at movie theaters declined during this period, this came mainly at the expense of independent, foreign, and documentary movies. For the Hollywood studios (and their subsidaries), in fact, there was no slump at all.

Without access to the studios' revenue numbers, prognostications about Hollywood become little more than the blind leading the blind. While the media would be very cautious about projecting automobile sales trends without industrywide data (which Detroit provides), it is a different story when it comes to Hollywood. For example, following a DreamWorks Animation announcement that Shrek 2 DVD returns wiped out much of its first-quarter earnings in 2005, the Wall Street Journal ran the headline: "In DreamWorks Earnings Woes, A Bigger Problem: Sales of 'Shrek 2' DVD Suggest Format Is Peaking As Hollywood Profit Center." The story speculated that the Shrek 2 DVD returns (as well of those of The Incredibles DVD) "may be the front-end of an even bigger problem: a general slowdown in DVD sales growth."

One problem with that theory is that returns are not necessarily a measure of the public's appetite for DVDs. Even many of the biggest-selling DVDs have substantial returns. Indeed, it is built into the business model. Since the manufacturing cost of a DVD is relatively low ($1.85), studios often "channel-stuff" by shipping as many DVDs to retailers as they can while setting up reserves in their accounting—usually between 20 percent and 30 percent of sales—for returns. As it turns out, even with some 7 million returns (which was 20 percent of the total sale), Shrek 2 actually outsold the original Shrek in similar time periods. The Incredibles was also one of the biggest titles in history, selling (after returns) 17.7 million DVDs. In any case, the attempt to divine an overall "slowdown" in DVDs from the sales of any particular title is dubious: No one knows whether consumers who elected not to buy the title in question bought another title instead (in which case overall sales would be unaffected). To assess a "slowdown" or "peaking," one would need the results of all the studios' sales over a comparable time period. Fortunately, this information is available in the 2005 Three Month Revenue Report.

The numbers tell the story. In the first three months of 2005, the studios earned $5.67 billion dollars from DVD sales, compared to $4.375 billion in the same period in 2004. DVD sales were up $1.29 billion, an incredible rise of 28 percent, which exceeded last year's increase. So there was hardly a slowdown in DVD sales. (Click here for the numbers behind the rise of the DVD.) Indeed, DVDs alone now provide 59 percent of the feature film revenues of the studios, as opposed to 48 percent in 2004.

The real issue that emerges in these secret industry numbers is not the rise of a new format. Just as the DVD replaced VHS, a more efficient digital format will eventually replace the DVD. (A high-definition digital recorder with massive storage is already available in the United States and Japan.) What has inexorably changed is the location of the studios' crucial audience. In 1948, with studios earning all their revenues from the box office, that audience was moviegoers. Even as late as 1980, when the audience had television sets and video players, studios still earned 55 percent of their money from people who actually went to movie theaters. In 2005, however, those moviegoers provided the studios with less than 15 percent of their worldwide revenues, while couch potatoes provided it with 85.8 percent. (Click here to see the numbers behind the rise of the home entertainment economy.)

This change in audience location altered the balance of power inside the studios. It reduced the once-almighty movie distribution arms to minor players while awarding star status to the home entertainment divisions that produced well over three times as much revenue. Through this reversal of fortunes, the stage has been set for what a top studio executive warned could be "Hollywood's death spiral."

The spiral begins with a shortening of the delay, or "window," that separates a movie's theatrical release from its video release. In the early 1980s, in order to avoid having new movies in theaters compete against themselves in video, pay-per-view, pay TV, or free television, the studios set up a series of insulated windows for each format. The video window opened six months after the theatrical release and four months before the pay-per-view window. With Warner Bros. leading the charge, DVD cracked the video window. Since Warner Bros.' strategy involved selling massive amounts of DVDs on the first day of its release, by 2001 they had effectively shortened the window to five months so they could market the DVDs of summer blockbusters at Christmas time.

Other studios followed suit with a vengeance, shortening the window to four months—or, in a few cases, three months—in order to sell Thanksgiving-released children's movies at Christmas. Even worse, the home entertainment divisions began to announce an upcoming DVD while the movie was still playing in theaters. For example, this July, only four weeks after opening The Adventures of Sharkboy and Lavagirl in 3-D, Buena Vista trumpeted the coming release of the extras-loaded DVD. Even if only a small percentage of moviegoers decide to wait for the announced DVD, it leads multiplex chains, which need to maximize their popcorn sales to stay in business, to cut the run of the movie in their premium theaters. The shorter the run, the less money the title takes in at the box office. As this spiral accelerates and studios earn a larger and larger share of their money from home entertainment, it adds to the pressure on studios to further reduce the video window. How far can this cycle go? After Hong Kong collapsed its video window in 2002, there was a 70 percent reduction in theater attendance. And, as a top studio executive pointed out after studying the problem, "A 6% reduction in attendance in 2000-2001 led to half the movie theaters in the world going bankrupt." How will Hollywood get out of the death spiral? "That is the $64 billion dollar question," he replied. (Stay tuned for the answer next week.)

Edward Jay Epstein is the author of The Big Picture: The New Logic of Money and Power in Hollywood.
stevevt is offline  
Old 07-27-05, 08:23 PM
  #17  
Needs to contact an admin about multiple accounts
 
Join Date: Jan 2003
Location: Cincinnati, Ohio
Posts: 475
Originally Posted by Joe Molotov
Sales aren't declining, they're just increasing at a decreasing rate.
Joe is absolutely correct. Plus I think some of us hold off buying some releases in anticipation of the upcoming next generation of discs.
Kimiakane is offline  
Old 07-15-06, 10:33 PM
  #18  
DVD Talk Platinum Edition
 
Join Date: Jul 2005
Location: Sunny California
Posts: 3,109
Its more than a year now since this thread started.. The only changes I saw was the addition of UMD, HD/BR Disc in the Movies section.
xage is offline  
Old 07-16-06, 03:05 AM
  #19  
DVD Talk Hero
 
slop101's Avatar
 
Join Date: Mar 2001
Location: So. Cal.
Posts: 40,055
DVDs are still selling more than ever, but still at a decreasing rate.

Pretend that three years ago they sold 2 dvds, and a year after that, they sold 5 dvds, and this year, they sold 10... now, even though this year your sales have doubled, and are higher than ever, the previous year's 5 dvds were more than double the first year's 2 dvds. Get it? Therefore, decreasing rate, and therefore, how you can use numbers to make things seem however you want.
slop101 is offline  
Old 07-16-06, 03:32 AM
  #20  
DVD Talk Legend
 
Join Date: Apr 2002
Location: Formerly known as Groucho AND Bandoman/Death Moans, Iowa
Posts: 16,985
Originally Posted by Duality
This store usually stocks ten or twelve Star Trek units. Since they had eight of the first season Brady Bunch, I'm guessing they stocked at least that many of the second season.
That's a bad assumption. Lots of people buy the first season of a show, but fewer people buy the second, even fewer buy the third and so on. Stores take this into account when ordering. If a store sold 100 copies of the first season, they're probably only going to order 80 of the second season.

Diminishing returns are the norm.
majorjoe23 is offline  
Old 07-17-06, 10:36 AM
  #21  
DVD Talk Special Edition
 
Join Date: Oct 2005
Location: Out of the sandbox!
Posts: 1,609
I also think that a lot of people caught on to the whole we-will-release-a-crappy-DVD now-but-give-you-a-nicer-one-later scheme they have now fallen into, and are waiting for that nicer release. Case in point, The Chronicles of Narnia. Just 4 months after their first 2 releases, another one is coming out. This is obviously a way to make more money off what they perceive to be a floundering business. Well, now I wait to buy a DVD I want until the second souped-up version comes out later that year. So, instead of paying those few dollars extra when it first comes out, I wait for the 2nd release, which is normally cheaper, and buy that. I don't know how many people follow a similar way of purchasing DVD's, but it seems to me that Hollywood is actually loosing money because of their current releasing schedule, at least from me.
GIjon213 is offline  
Old 07-17-06, 12:05 PM
  #22  
DVD Talk Limited Edition
 
Chrisedge's Avatar
 
Join Date: Jun 1999
Location: Part of the Left-Wing Conspiracy
Posts: 6,910
I was reading that most sales are in the first week, then rapidly decline, with many folks waiting for the often quick price reductions.

As far as T.O.D, many shows aren't selling as well for the later seasons, so they are not finishing up some shows that get released.
Chrisedge is offline  
Old 07-17-06, 12:31 PM
  #23  
Banned
 
Join Date: Feb 2001
Location: NYC
Posts: 15,957
Yes, they are declining.

EVERYONE should buy an HD DVD player and start over.
digitalfreaknyc is offline  
Old 07-17-06, 02:38 PM
  #24  
Member
 
Join Date: Jan 2006
Posts: 203
I do not understand how this is a "Hollywood Death Spiral" as the article suggests. It seems to me that if theaters disappeared all together and movies went straight to DVD, the studios would still be making a profit. So, if anything it is a "Theater Death Spiral". What am I missing?
Greg613 is offline  
Old 07-18-06, 07:00 AM
  #25  
DVD Talk Platinum Edition
 
Join Date: Nov 2003
Location: WV
Posts: 3,178
I think one of the main reasons for the decline of DVD sales is based on the crappy films that are getting released theatrically. There are very few new release films that people must own on DVD. Instead of releasing new, quality movies, the studios seem more than content to re-release their entire catalog on DVD, and then again with HD.
fryinpan1 is offline  

Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.