Retailers warn studios to watch DVD pricing strategies with advent of movie downloads

Discussion in 'DVD' started by Mike Frezon, Oct 9, 2006.

  1. Mike Frezon

    Mike Frezon Moderator
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  2. Will_B

    Will_B Producer

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    And further, they demand that apples be sold at the price of oranges.

    They're bananas.
     
  3. Terry St

    Terry St Second Unit

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    If you could walk into a store and pay $17 for a normal DVD, why would you pay even $12 for a downloaded copy that costs you money to download (i.e. You pay for the bandwidth) and archive (i.e. Burn to DVD) and includes no attractive packaging to sit on your shelf? This is assuming that the downloaded copy is of the same quality as the store-bought DVD and isn't crippled by overly restrictive DRM. Movie downloads are going to have to be significantly cheaper than buying regular DVD's for the format to be even remotely attractive to consumers.

    The question is, are studios committed enough to the success of online downloads that they will price their movies in accordance with consumer perceived value? The studios definitely should have seen this coming. If they weren't willing to flip Brick&Mortar retailers the bird, why did they even waste the money developing online movie downloads? My prediction is that the studios will tell the B&M retailers to bend over and take it like men.
     
  4. JohnRice

    JohnRice Lead Actor

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    I disagree. Not significantly cheaper anyway. For collectors, sure, but most regular consumers aren't collectors and don't care all that much about the packaging. However, Target seems to be saying they want to cost to be the same, which is also not realistic. I suspect a difference of about 20-30% is realistic.

    Plus, who pays for bandwidth? You typically pay a certain amount each month to have a certain speed connection, regardless of how much bandwidth you actually use.
     
  5. Mark Oates

    Mark Oates Supporting Actor

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    We are talking about an industry that still regards theatres as its primary sales point to the public. If we're to believe the MPAA's numbers about lost revenue, isn't the Home Entertainment market potentially a lot larger than the theatrical market, and the potential download market even larger?

    I think the Studios will probably go along with the retailers' demands, not because of fears of losing support but because they see all the $ signs and if anybody complains they say "take it up with the stores, they forced us. :p"

    Going to a theatre, renting a title and downloading all share one inherent problem - lack of perceived value. You go to the theatre, at the end of the experience all you have is a ticket stub and a memory. You rent a video, all you have is a trudge back to the store and a memory. Unless you burn your downloaded file to DVD, all you have is a file rattling around inside your computer and for a lot of people that's a "so what?" call - most of the other files they acquired for free.

    The price point for downloads has to be sensible. On a par with rental, but with the option to keep. Price them too low and the Studios have little encouragement to support the technology. Price them too high and the public compares the lack of value with the perceived value of the disc-in-the-box and sticks with that.

    Speaking from a UK perspective (and cost of living), £5 would be a reasonable price point for downloads - not a sum to break the bank, maybe a whisker more than a standard Blockbuster rental. Perhaps for that you'd also get a JPEG of a box slick thrown in. Approached sensibly and not seen as a cash cow, downloading-to-keep would be a winner.

    A senior executive of HMV in the UK is on record as saying that DVDs are an aspirational commodity, and that prices should be kept high to reflect that. (He was arguing against free DVDs given out as promotional material with newspapers.) If the same model is applied to downloads, that could only slow the growth of the market or worse provide proof to the Studios that they can get away with inflated prices.
     
  6. Jason_V

    Jason_V Producer

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    It's funny: Target wants everything to be "equal". However, they have hopped on the exclusive disc/content bandwagon which is clearly NOT equal for the consumer. Sounds like they only care about equality going one way. They forget the idea that equality is for everybody, not just one group.
     
  7. Dave Scarpa

    Dave Scarpa Producer

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    Well Because it does'nt take up space is a pretty strong reason for me. At 1500DVD's I'm at my space limit. I could DL, keep a Backup copy on Disk, and Play from my 500GB Drive. But we're not there yet. The Price needs to be greatly reduced and the Resolution has to be the same as DVD.

    Then there's HD-DVD throwing a wrench into things, if we want a Hi Def format we're definately not there yet for DL.
     
  8. Russell G

    Russell G Fake Shemp

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    Is this actually their pricing stratagy?? Why would anyone pay $12 for something you can get of equal quality for free? Sure it's illegal downloading and it means that that stuntman guy and grip aren't getting paid ([​IMG]), but the studios are going to have to significantly lower their price if they expect people to consider downloading movies.

    I would rather buy a new dvd, but with the new single disc for $25, 2 disc set for $35Cdn strategy, most of my purchases has been buying the single disc for $6 previously viewed and ripping a copy of disc 2 from either netflix or a friend. The studios can't be that naive about this stuff. If I could get all the material for a decent price, I would. Those 2 disc sets are no different then what was sold for $20-$25 a couple of years ago. Same thing with downloading.
     

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