We knew it was coming: A new trend in standard vs SE pricing? (1 Viewer)

[MarkHarrison]

What's really frustrating is when your B&M of choice doesn't stock the better edition to save shelf space. I live just about 2 miles from a Best Buy and can order things online, but I prefer to do my shopping at another location. And it really sucks when they don't carry the better edition.

 

[Yumbo]

Now if I can't afford the 2 disc, fine.

I buy the 1 disc or wait for price drop.

But when you're Disney/Miramax, and give us:

1 disc FULLSCREEN $30
2 disc WIDESCREEN $40

THAT is ROBBERY.

The Great Raid - guess they took the title literally.

 

[Andrew Bunk]

Wow I didn't knwo about that one Chris. I wasn't interested in this film. That really sucks that you can only get the OAR by buying the more expensive one. But then again, the film tanked, so I guess they need to recoup the production costs somehow.

 

[Yumbo]

What was poor was the lack of LABELLING title-wise.
It didn't say FullScreen/Widescreen.

Just 1 disc, and 2 disc Director's Cut.

That's snakey as one can get.

 

[Chris Farmer]

No offense to you personally Andrew, but it's this kind of reasoning in general that lets the studios get away with it. Think of what you're saying: "As the market reaches saturation." that means the market has undergone explosive growth. Meaning, they're selling a hell of a lot more DVDs than they used to. It's obvious that the lack of a rental window and low pricing was a huge part of what helped the DVD market hit the levels of growth it did. VHS at its peak never hit the levels of market penetration that DVD now has, and yet the response to ever increasing sales is to RAISE prices? So when DVDs were selling well but not hugely, cheap prices made them a good investment and made them enough money. But now that the market has exploded and DVDs are selling hand over fist, they're not making enough? What kind of idiotic reasoning is that? I mean, come on people.

To put it another way, the manufacturing cost of a DVD is just about nil, for packaging, the discs, and everything else. The cost of a DVD comes from the content, not the physical objects themselves. But here's the trick. That money has already been spent, and was spent long before the first disc was even authored, much less pressed. Those documentaries on the two disc edition of [insert movie with two different editions here]? They're already long since paid for. It doesn't save [insert studio here] a dime not to put those documentaries on every copy they sell. Hell, for ones that strip features off the first disc, it COSTS them money, because they have to print two different runs, as opposed to just printing 1/3 as many disc 2s and disc 1s. The only money that is saved is in the manufacturing cost of a two disc edition vs. a one disc, and that's probably about a buck, give or take. Factor in different packaging that has to be designed, the smaller runs of each increasing your productions costs for each one (8 million of one thing is cheaper than 5 million of one and 3 million of another), and up front, this practice is costing the studios money to implement.

Look at the difference in wholesale pricing. Warner Brothers is charging a difference of one dollar for the one disc edition vs. the two disc edition. That comment about allowing stores to protect their margins? That said it all. Before, every copy of the movie got marked down to the loss leader price. It didn't matter how elaborate the edition was, if it was a big name movie, you could walk out of Best Buy or Circuit City with it for $15 or $16, without fail. Now, you can still walk out of the store with the movie for the same price, but only if you just want the movie. The special features have now been priced EXTRA. This isn't saving Joe Consumer who only wants the movie anything. This practice is aimed specifically at bilking a few more dollars out of the enthusiasts who want special features. This is about allowing the stores to have SOMETHING to sell at the loss leader prices that they themselves standardized on, but still making money on the people who want more.

The only people that come out ahead in this game are the studios and the retailers. Consumers who don't care about special features see no change for the most part, and lose the chance to ever change their mind and watch the features at a later date. Enthusiasts who do want the features are stuck holding the check, now having to pay for things that were once standard. It's the classic bait and switch, only instead of condemning this practice, we have members here actually praising the decision. And that's a disappointment to me.

 

[Porfirio]

Well said Mr. Farmer, well said.

 

[MattHR]

I'm not defending the studios or retailers, but it is their decision to market the product how they wish. It is your decision to purchase that product, or not. It seems that many of the complaints in this thread come from some sense of entitlement.


Not really. The dictionary definition of bait and switch:"A deceptive commercial practice in which customers are induced to visit a store by an advertised sale item and then are told that it is out of stock or that it is far inferior to some more expensive item." For the cases when a movie is offered in two versions, advertised or not, all the consumer has to do is decide which version he wishes to spend his money on. While he may not appreciate the additional purchase options this presents him, they are, afterall, options.

 

[Andrew Bunk]

You'll notice of course I never said I condone it. I merely understand why it's happening.

Also, Chris, you make it sound like the studios should make just enough to stay profitable. If you ran a business, I think you'd try to maximize profits. Again, I dont condone and of course I am not happy to pay more for what I used to get for less. But such is capitalism.

You're right, they hooked us, and are now charging more. We can always quit. Just like smokers.

 

[MattHR]

Another point that needs reiterating is that this dual-release trend was imposed on the studios by the mass-merchants. As sad is sounds, the studios are in fact controlled by the mass-merchants; Wal-mart in particular.

The standard discount pricing referred to in this thread, for the most part, applies to the major "A" titles; of which there are usually one or two released per week. It's unfortunate, but these type of films have basically become the main "traffic" drivers for the mass-merchants. They advertise and sell these titles well below their wholesale cost--a loss considered a marketing expense. These stores are able to sell volumes of other items, with large profits, to help make up the losses.

The studios pay for their titles to be featured in these stores' Sunday circulars. Some studios have a "minimum advertised price" policy for these ads, which is why many stores advertise the titles as "low price", rather than actually indicate the actual selling price. This MAP policy was put in place to "level" the playing field, by disallowing the actual quoting of low prices. Many small retailers sued because the studios were only supporting the large chains with their promotional support. In other words, Best Buy may advertise a title on sale for less than what other stores would pay for the same item at wholesale. It is also complicated because many states have laws against stores advertising and selling items for less than their cost.

When you look at an average Best Buy, Circuit City, etc. Sunday circular, notice that the week's major DVD release is not just featured in the movie pages -- it's featured throughout the pages -- pictured on the screen of every TV in the ad. The studios pay for this exposure.

The dual-release strategy simply allows the stores to sell the title for the same, competetive, below-cost price the market has become accustomed to. Only now, they can also sell that same title, albeit with more features, and actually make a few bucks for a change. The difference in wholesale cost between the two versions is about $1.50, while the difference in actual selling price can be almost $10. For the store, it's the difference of losing about $4, or making about $4. That's an $8 difference, a difference that is probably worth alienating a small percentage of consumers.

 

[Terry H]

And I pretty much have, my rental account is never idle. Personally, I think the studios have brass balls milking the public for every last cent when HD is just around the corner and dvd is approaching the end of it's life. They are certainly not making their nearly dead product more attractive.

 

[Andrew Bunk]

Terry, that's cool that you have weened yourself off purchasing. Wish I could.

But DVD is far from dead. Take the WB chat for instance. Titles being discussed for DVD release well into 2007. Only a few times was HD mentioned. I predict DVD is still going to be the loss leader for at least the next 18-24 months.

Also, my question stands, and again I pose it as a hypothetical rather than a defense of studios: what should the studios do? Try not make as much money as they can?

Frankly I'd be surprised if the studios weren't trying to milk every last cent. They are in the business of making money. While I'm sure some studios would like the customer to be happy, at the end of the day they'd rather be in the black.

And the way I see it, once the studios figured out 4-5 years ago how much money they could make on DVD, they opened the floodgates for titles. This was a huge benefit for film fans, as we could finally get a lot, if not all of those titles we had been dreaming of getting on DVD. So in a sense, you could say the studios' desire to maximize profits helped us get the great films we have on DVD.

Remember, once it stops being profitable for studios to release certain types of release, they will stop. They aren't out to provide a public service. They have to make money.

If you are angry with their current policies, do what Terry does. Rent. Or buy used. Maybe they will get the message.

 

[Terry H]

Oh, please... studios made rivers of money off DVD. They still do. I would think they would want to keep my goodwill to induce me into HD purchases rather than make a few extra bucks by inflating prices on a faltering product. Apparently not. I guess they assume we won't see what they are doing, or don't care.

 

[Andrew Bunk]

This would be nice. But think about this. The studios used to be very attuned to places like HTF. It hasn't been that way for quite some time though. It would appear they are more concerned with selling the 1-disc release to the growing number of impulse buyers each week than they are keeping enthusiasts like you or me happy.

I have a sneaking suspicion they aren't going to bother catering to people like us with HD either, even though it is in their best interests for a strong launch.

Correct me if I'm wrong Terry, but it sounds like you're asking studios to "leave money on the table". I honestly don't think they are capable of that. If it's there for the taking, they will take it.

 

[Yumbo]

Blame the pirates?

 

[Bob Pierce]

I have to say, I'm totally with Chris F. and Nathan on this one. This is one of the most annoying and frustrating trends I've seen from studios. It's a blatant attempt at a cash-grab, cutting SE margins and thereby raising SE retail prices from $15-16 to $20-24. It's the reason I still don't own Mystic River SE and Master & Commander SE, two titles that I've wanted for a while.

And you know what really worries me? No matter which way sales figures trend as a result of the change, consumers could lose! If SE sales drop significantly, someone could make an argument that people really aren't interested in the extras in SEs an standard editions are "good enough". If enough people keep buying SEs at the higher prices, then this two-track pricing is likely to continue.

I hope that studios do enough market research to be persuaded that this latest pricing scheme isn't working, and that they go back to the old way of doing things.

$0.02 (more than a little venting...),

Bob