Warner Bros./Blockbuster Article (1 Viewer)

[Matthew Brown]

I just caught this article and thought I would post a link.
http://www.msnbc.com/news/699928.asp
It mentions DVD pricing, rentals, sales, and is pretty interesting. Probably nothing new to many here, but I always find these articles interesting when mentioned on news sites.
I apologize if this has been posted already.
Matt

 

[Marc Colella]

"One studio, Warner Bros., is crusading to drive down the prices of all DVDs, preferably so low they’ll become an impulse purchase like magazines. Most of its rival studios are aghast."

And all this time people were blasting Warners for a few P&S titles and snapper cases.

 

[SteveA]

The article states that Blockbuster's CEO is happy with the status quo, because low DVD prices (and no revenue sharing with the studios) are sending their profits through the roof.

So what in the hell do they have to complain about? Why would they want to return to rental pricing and make LESS money?

 

[Allen Hirsch]

I did learn something interesting from the article.

I knew Warner had some DVD patents, and were among the biggest promoters of the format as a result. But this article makes clear that Lieberfarb is on a crusade against Blockbuster, and THAT is why he's a proponent of such low DVD prices. He's trying to break Blockbuster's near-monopoly on rentals, so he wants to make DVD impulse purchases the "replacement" for renting, at least until video-on-demand can bypass Blockbuster (who tried to start up their own on-demand service in a joint venture with none other than Enron, who had abunch of excess broadband capacity before they tanked).

 

[Mike_Ped]

It doesn't matter how low Warner Bros drives down the prices, if they keep making titles available ONLY in P&S, I ain't gonna buy. But thats just me...

Mike

PS - The snapper cases don't help sell their DVD's either!!

 

[Peter Chan]

Blockbuster Video in Sydney Australia are already doing this.

Pearl Harbor & Jurassic Park 3 are only available as rentals through Blockbuster Video rental outlets.

These 2 titles were released same day as VHS Video for rental. Note no special features are available on the DVD.

Only widescreen movie available.

Pearl Harbor DVD won't be available for purchase til April 2002, Jurassic Park 3 will be not be available for purchase til March 27th 2002.

So what gives....the distributors obviously want DVD to have a rental window before going sell through just like the VHS video market.

Which sux...prior to DVD i didn't buy any VHS movies.

But once DVD came along i've been buying 1 title a month on average....

 

[Matt Everett]

thanks for the link!!

 

[AaronMK]

You know, I would not be surprised if the P&S only attempts were aimed at winning over the Blockbuster consumer.

 

[Sam_K]

at least until video-on-demand can bypass Blockbuster (who tried to start up their own on-demand service in a joint venture with none other than Enron, who had abunch of excess broadband capacity before they tanked).

According to financial report, the joint venture was setup as one of those 3,500 partnerships to generate fictitious accounting profit/loss. Enron never intended to go into that business. In fact, whether Enron had excess broadband capacity or not is very much questionable. The joint venture was eventually dissolved.... I guess after it served its accounting purposes.

 

[Allen Hirsch]

Aaron-

that's an excellent point.

I hadn't quite realized before what a "break the Blockbuster near-monopoly" crusade at least certain studios were on.

Cheap prices and no black bars would certainly put Blockbuster in their crosshairs - at the expense of their early-adopter OAR customer base. (But, as the article points out, we're no longer the numbers that matter - it's the mass market they're fighting over now.)

 

[Gui A]

That's weird. I always find MGM titles to be far cheaper than Warner titles. The last three titles I've bought from them were impulse purchases - Mad Max SE and the Bill & Ted Duology (is that even a word?).

 

[Seth Paxton]

Not to knock this latest article on the subject, but this battle between WB and Blockbuster has being going on for some time now and is often reported and discussed here.

It's nothing new to say that Warren wants to wipe out Blockbuster. I think he said those exact words at the 2001 CEA conference (or someplace like that).

The bottom line is that there are studios aligned with each camp, and the studios take pot shots at each other.

A follow up to this is the new Digital VHS. A big push for this technology is coming from the "other" side (anti-WB and their DVD patents) who would love to see something removed DVD sales and the money that goes to Warner with each purchase.

Rental pricing, D-VHS, just some of the pawns in this major battle.

WB has done a lot of dumb shit yet at the same time they are fighting the good fight on the highest level. Go figure.

 

[Seth Paxton]

Also, remember the Swordfish VHS priced to sell-through? A direct effort to undermine the rental income on the same title by shifting rentals to purchases and taking Blockbuster out of the income loop.
Blockbuster's response to this price point? They stuck the title behind the counter to hurt rentals and sales.
Again more tit for tat leveraging.
Look for WB to probably not renew their VHS rental agreement (kickbacks basically) with Blockbuster.
And watch for Viacom/Blockbuster owned studios (i don't remember the lists of which studio is with which side) to push for higher prices on DVDs to generate more rentals. These are the studios that would first shift to rental windows if it happens.

 

[Kimmo Jaskari]

Well, it's not enough yet to earn Warner a gold star, but at least they have a sensible approach to DVD's.

Get them out fast, in OAR, at low-low prices and people won't bother with piracy much either. And it lets us collectors build our collections without mortgaging the house.

 

[Shane D]

what i thought was kinda funny, (i think it was in that article, it was last night when i read it and i've slept since then) is they said these new 'converts' buy up to 16 titles a year, and i was thinking, i average that in 2 months. and they made 16 sound like some huge number when im sure everyone who posts on here more than double those purchases in a year.

 

[Chad Ferguson]

It shows that Warner is one of the few studios that realzie and will stand up against Blockbusters power! Really, Warner should be getting more respect for this! They put a very high quality product and if a few films were released in Pan and Scan, well, that happens. Plus they fixed it for some titles cause they listened to the people. If Blockbuster has there way, we would pay a lot of movie for SE's that would come out 4-6 months after they come out for rent. Really, this is a huge step and we should be backing them up. Plus, making DVD's cheaper, sounds great too me.

 

[Scott Leopold]

The thought of making DVD's cheaper actually frightens me a bit. A decent portion of my collection right now is impulse purchases, and if they got even cheaper I'd probably be buying more. Not that that's such a bad thing, especially if all the studios finally start digging into their catalogs and releasing the classics.

 

[Nate Anderson]

if they got even cheaper I'd probably be buying more.

If DVD purchasing gets any more impulsive for me, I'm going to have to take out a third mortgage on my dorm room.
*Grabs W.B exec*
[hysterics]Just give us our widescreen and you can do whatever the hell you want to!!!!
*Grabs Blockbuster exec and puts a gun to his head.*
[Best Dirty Harry Impression]I can read minds. If you ever think about rental pricing again, I will shoot you.
[Best Woody Allen impression]Boy, if only life were like this...

 

[Dwayne]

Good read. I wish I would've saw this earlier.

Someone mentioned BB stocking Swordfish behind the counter to spite Warner. Remember that they did the same thing to Dreamworks when American Beauty was released. When a company that deals directly with the public, like BB, acts like this, it looks really petty and downright inmature. I am very pleased that there is finally some resistance toward BB.

I found this especially smug:

Generally, Blockbuster’s Antioco says he is content with the DVD status quo, in which he pays low wholesale prices without the complication of sharing the rental proceeds. If the studios keep dropping prices, “my margins would go through the roof, and customers would still rent,” he says.

Great. Then stop fighting for DVD rental pricing.

Studios with smaller catalogs are definately going to gravitate toward BB if the prices continue to fall.

Warner is gonna have to concede to some extent with the other studios if BB is to be truly defeated.

 

[Mick Wright]

Did anyone catch this quote -

Lieberfarb wants to get the retail price of new releases down to about $10

I'm not complaining.