Cost to Produce Season Sets

Question for all interested - how much is the average cost of a DVD Season Set for a studio? Remember, these shows have already been produced and filmed and sitting in a vault somewhere. I know there's a cost of producing the DVDs themselves and for extras, remastering and for licensing, etc. etc. What I really need to know is how many copies must a studio sell in order to break even on producing the DVDs on average? Is there a breakdown of the cost mentioned above?

I'm not convinced that studios actually lose any money on these sets since the high cost of producing a series is the cost of series itself (actors, directors, sets, promotion, etc). What I think is that the studios are not making as "much profit" as they want to and that's why they stop releasing season sets of shows.

Forgive the ignorance - I just don't have a clue how much DVDs cost to produce. I know how much I pay for them.

Thanks

Re: Cost to Produce Season Sets

There isn't a magic number of sets that need to be sold because there are many different variables that have to be considered. Some of those include:

-Music licensing
-Film transfers
-Film restoration
-Profit participation from producers/cast members
-Packaging costs
-Audio mastering & cleanup
-Number of projected units sold
-Authoring costs
-Bonus material

Gord

Re: Cost to Produce Season Sets

Indeed, Gord. Of course, the cost of producing a DVD set pales in comparison to the original production cost of a series. But the fact that it's "just lying around" (as I often see people saying here) doesn't mean that there aren't considerable costs getting that show on DVD to you. Music must be cleared (which can mean many man-hours for lawyers) or sometimes replaced (more clearance hours, or hiring a composer), and that music must be paid for. All actors, credited writers, and directors are paid residuals. (These residuals are actually quite low for DVD, but they do add up for a season, and require additional filing with each guild.) Most shows have profit participants -- actors, creators, etc. who are entitled to a percentage of all money earned from the show. All of this must be logged in detail for auditing.

Manufacture and design add to those costs (menus and navigation must be tested on multiple players, as DVD players remain fussy). Then the sets must be sold to stores, which requires sales staff. Add to that distribution and storage of unsold stock. In some cases, there are additional promotional costs. On top of all this is the considerable overhead of any studio spending man-hours putting these things out.

And yes, you know how much you pay for the DVDs. But realize, of course, that only a percentage of what you pay goes back to the studio. The biggest chunk of what doesn't goes to the store, of course. And then some goes to the profit participants, as above. In some cases, the studio and a distributor split profits in some percentage (for instance, Anchor Bay's arrangement with Carsey-Werner).

None of which means, of course, that DVD sets can't be profitable. Some are, very. But as you can see, it's not just "found money." Money can be lost on these, too. As with anything, the hits pay for the misses.

As for studios simply not making enough profit on a given release, well think of it this way (with obviously made-up numbers): If Paramount makes a $10 profit on "Taxi" and a $100 profit on "South Park," which one should be their priority? As we've seen recently, no show is definitely abandoned forever. But more profitable ones naturally come before less.

Re: Cost to Produce Season Sets

Mike, I wish you'd explain that to the folks in this thread, who seem to think that the main cost to the studios is the number of discs that go in a package, and that therefore HD-DVD and Blu-Ray eliminate the studios' last "excuse" for not producing full series releases of SD series. Disc replication is, of course, one of the least expensive parts of the process, but that's what everyone seems to fixate on.

Just digitizing and mastering the original film prints or videotapes - without extras, menus, audio remixes, chapter stops or anything else costs thousands of dollars per hour of finished materials. If you're Paramount, selling Star Trek, you have a 40 year marketing history that makes you pretty confident that you'll sell enough copies of each season of your shows to make a profit. So it makes sense for you to spend millions of dollars up front prepping ST:TNG and releasing the sets - if not exactly simultaneously - at least once a month. If you're Warner Bros. and you're skeptical about the marketability of Babylon 5, you don't spend millions of dollars up front to prepare all five seasons of the series and all the TV movies. You spend a 5th of that, release the first season and then decide what to do after you see the sales figures. Because if you're an executive who make decisions about these releases and you do pay to prep all five seaosns of a show that crashes and burns with season one, you're going to be looking for a job.

There's a reason it's called show business.

Regards,

Joe

Re: Cost to Produce Season Sets

Joseph, Mike, excellent posts/info. As a fellow TV/DVD collector of primarily "vintage" (my definition:50's-80's) series, it's a hobby that can frustrate us at times. ie "Where's my "Holy Grail" series on DVD?" As we've started to see momentum pick up in Jan-Mar for vintage series releases, patience is a good thing to have in this market I'm fortunate to have had most of the series on my list either released or announced during the past 2 years and in early '07.

Thanks for reviewing the many factors and parameters that have to be considered by studios and independents before releasing a TV/DVD set. As my "Millenium Kid " nephew likes to say to me, "Most of this stuff will be released in time." Maybe he'll turn out to be right after all That's why "Santa" has some things on his sled for him this year

Re: Cost to Produce Season Sets

I imagine the cost and reasons sets are discountinued is not monetary, but man hours - the number of staff/time needed to do the above clearance is probably best spent elsewhere.

So while the release may not be in the red, there is no doubt if they can assign staff to a different release which would make more money - they will.

If a show is being released once a year, its my understanding its more to do with an acceptable profit and putting the staff on shows that matter - they prioritize the return on DVDs.

Re: Cost to Produce Season Sets

Thanks for the responses guys. The reason for the thread was more to get the studio's perspective on DVD releases - the economics of the endevour. There must be a reason why series are dropped or delayed. I read a lot of speculative insight from the members at this forum but never really got a sense of the underlying factors. You guys have opened my eyes to more about releasing DVD sets other than "making money". Some of the "behind the scenes" to releasing DVDs is obvious, others are not. There's obviously a lot that goes behind releases DVDs and I think we all need a real understanding thereof.