Why is it becoming more difficult to obtain new 4k releases? (1 Viewer)

[Josh Steinberg]

Apparently, whatever amount of replication facilities that are left don't have the capacity to meet the demand of popular new titles such as Chinatown and Once Upon a Time In The West.

One thing we don’t know for sure is how many copies Paramount is ordering up for titles like that. It may not be solely a replication issue but also one of the clients choosing to put in smaller orders so as not to get stuck with excess inventory.

Most catalog titles of this ilk sell between several hundred copies and in the very low thousands, over the course of their lifespan in the marketplace.

In the old days, minimum order quantities were much higher, and studios would get stuck ordering thousands and thousands of copies when maybe only 500 or 1000 or even 2000 were actually needed. There’s a cost to sending out extra copies to retailers and then having to take them back when they don’t sell. There’s a cost to storing unused inventory. And that put studios and retailers in a position where they’d either have to deeply discount them below break-even cost just to get the storage costs of their back, or liquidate them with a third party that provided pennies on the dollar, who would then flood discount stores and websites with that product dirt cheap. As a result, customers became used to buying new product at the $5-10 price point, and would balk at paying the actual price when they were new, thus trapping everyone in a race to the bottom scenario that was part of the reason discs became more trouble than they were worth from a studio perspective.

Paramount said that Chinatown 4K would be limited to 10,000 copies, but nowhere did they say all 10,000 copies would be printed and put on the market all at once. I strongly believe that their initial order was far fewer than that. The downside to printing fewer copies of a title at once is outweighed by the benefit of not having so many excess copies that they basically have to be given away at a loss. I don’t think they want the kind of excess inventory that would force extra copies of these titles into bargain bins. It’s not good for business if this becomes a $5 item at Amazon three months from now. I would also suspect that for the people who do want this on disc, while waiting a little while may be frustrating, that most buyers aren’t going to say “if I have to wait an extra month, I’m just not going to buy it out of spite.”

I think we all need to get used to the idea that rigidly accurate street dates are going out the window, and street dates will probably be more reflective of when initial batches of product begin to ship rather than the date that everyone everywhere gets their copy.

If we want physical media to survive, the industry just can’t afford for titles to be overprinted and headed to the discount bin shortly thereafter.

 

[Ronald Epstein]

One thing we don’t know for sure is how many copies Paramount is ordering up for titles like that. It may not be solely a replication issue but also one of the clients choosing to put in smaller orders so as not to get stuck with excess inventory.

Most catalog titles of this ilk sell between several hundred copies and in the very low thousands, over the course of their lifespan in the marketplace.

In the old days, minimum order quantities were much higher, and studios would get stuck ordering thousands and thousands of copies when maybe only 500 or 1000 or even 2000 were actually needed. There’s a cost to sending out extra copies to retailers and then having to take them back when they don’t sell. There’s a cost to storing unused inventory. And that put studios and retailers in a position where they’d either have to deeply discount them below break-even cost just to get the storage costs of their back, or liquidate them with a third party that provided pennies on the dollar, who would then flood discount stores and websites with that product dirt cheap. As a result, customers became used to buying new product at the $5-10 price point, and would balk at paying the actual price when they were new, thus trapping everyone in a race to the bottom scenario that was part of the reason discs became more trouble than they were worth from a studio perspective.

Paramount said that Chinatown 4K would be limited to 10,000 copies, but nowhere did they say all 10,000 copies would be printed and put on the market all at once. I strongly believe that their initial order was far fewer than that. The downside to printing fewer copies of a title at once is outweighed by the benefit of not having so many excess copies that they basically have to be given away at a loss. I don’t think they want the kind of excess inventory that would force extra copies of these titles into bargain bins. It’s not good for business if this becomes a $5 item at Amazon three months from now. I would also suspect that for the people who do want this on disc, while waiting a little while may be frustrating, that most buyers aren’t going to say “if I have to wait an extra month, I’m just not going to buy it out of spite.”

I think we all need to get used to the idea that rigidly accurate street dates are going out the window, and street dates will probably be more reflective of when initial batches of product begin to ship rather than the date that everyone everywhere gets their copy.

If we want physical media to survive, the industry just can’t afford for titles to be overprinted and headed to the discount bin shortly thereafter.

Good read as always, Josh and makes, perfect sense -- especially the last paragraph.

 

[Worth]

...I don’t think they want the kind of excess inventory that would force extra copies of these titles into bargain bins. It’s not good for business if this becomes a $5 item at Amazon three months from now. I would also suspect that for the people who do want this on disc, while waiting a little while may be frustrating, that most buyers aren’t going to say “if I have to wait an extra month, I’m just not going to buy it out of spite.”

I would expect just the opposite - scarcity drives up interest.

 

[Traveling Matt]

There are almost certainly more factors than we can know regarding replication. Can it be resolved with larger, advanced production runs? If all the labels start doing that, will there be enough capacity? If it's close, does that create problems replicating additional runs of existing titles? This is for the studios and facilities to figure out for themselves, but I agree it's possible they decide the risk isn't worth changing things. At the same time they also have the ability to ensure the outcome (bounce back or not) they desire.

 

[Malcolm R]

I would expect just the opposite - scarcity drives up interest.

Yes, look at how everyone panicked and Ebay prices went through the roof when the James Cameron 4K titles were delayed a few weeks back in the spring.

 

[ManW_TheUncool]

There are almost certainly more factors than we can know regarding replication. Can it be resolved with larger, advanced production runs? If all the labels start doing that, will there be enough capacity? If it's close, does that create problems replicating additional runs of existing titles? This is for the studios and facilities to figure out for themselves, but I agree it's possible they decide the risk isn't worth changing things. At the same time they also have the ability to ensure the outcome (bounce back or not) they desire.

That's the problem. They do NOT actually desire (what impatient small numbers of customers want) to take that high risk of being stuck w/ overstock at this stage in the overwhelmingly declining bizz... since their bottomline is to make $$$, not lose it. And we really should understand and accept that (and learn to be more impatient methinks).

_Man_

 

[titch]

4K discs have always been a luxury item, a niche product. It's just taken eight years for Amazon to no longer discount their sale price, after the release date. And when Amazon's stock get depleted, when listed at a low price point (e.g. Taxi Driver steelbook), the order is cancelled ("the item is no longer for sale from the seller you selected" - this is Amazon, not a third party seller) and is not fulfilled later at the initial order price point. There are a few exceptions, but these are not common now.

Very few of Criterion's new releases (4K and blu-ray titles released during May/June/July) were discounted on Amazon during the summer's Barnes & Noble sale (e.g. Pat Garrett and Billy the Kid, Bound, Blue Velvet, The Underground Railroad, Fear and Loathing in Las Vegas). I didn't notice any. Which makes it the first time this has occurred, since Barnes & Noble started their 50% sales.

Titles not generally sold via Amazon, but directly from boutique labels (e.g. Umbrella Entertainment, Arrow Video, Second Sight, Vinegar Syndrome, Synapse Films) disappear extremely fast.

Members hanging around "until this comes on sale", when a new title is listed, are increasingly likely to find that they are unable to obtain it, unless they fork out top dollar to re-sellers on eBay. As Robert has pointed out, collecting discs is an expensive hobby.

 

[tenia]

I would expect just the opposite - scarcity drives up interest.

It does. The whole Limited Edition, Steelbook, Slipcover, Vault Edition, Titans of Cult Edition, market is based on this : making people thinking they won't have the time to think twice, to wait for a price drop, and straight away buy the item while at full price. "I'm not sure I really want it, but if I wait, I might not have the option at all, so here I go."

In a physical market where big studio releases are only selling a 10th of what they were in the past, you have to add on top of that the new difficulty of accurately forecasting sales figures ("is it going to sell a 10th of what it would have 10 years ago, or a 9th ? or a 11th ?"), hence creating extra issues if the forecast turned out to be just too pessimistic, but the sales aren't that bad. That's how you end up with sold out pre-orders on top of having tailored the batch size to ensure people are going to jump on it just because of their fear of missing out, and that's how you sell out 50€ Vault or Titans of Cult editions that often mostly are fancy repacking with no proper value-for-money.

It doesn't help that because of the market's shrinkage, the industry adapted by shrinking its capacities (logistics and pressing), but it's also quite hard to know for sure when a shortage is due to actual exceptional sales or any of the above. For instance, there has been the story about Oppenheimer, but I have yet to see a figure confirming it sold like nothing ever before, hence the shortages, and not because of the video sales potentials having been under estimated (especially since I don't think there were any shortages outside mostly the US). I see OUATItW mentioned : same here, I haven't seen the UHD being OOP in Europe. (so : what Josh said)

And indeed, any stock excess is creating so much hassle now because of all that, while discounting (and endless multi-buy sales) hurt the market by anchoring prices that are way too low for the industry (in particular for many indie labels). Years ago, when the UK market picked up with BD, it was routine to see those being pre-orderable at £14.99, sometimes discounted at £12.99 by Amazon. Except that it was too low a price for the related labels (Arrow, for instance, but also Eureka and BFI, IIRC), and it took some time to bring this back to the now-routine £17.99, and for consumers to accept what was perceivable at a price increase (while it rather was a price correction).

Paramount said that Chinatown 4K would be limited to 10,000 copies, but nowhere did they say all 10,000 copies would be printed and put on the market all at once. I strongly believe that their initial order was far fewer than that.

10k copies worldwide, maybe, but definitely not the first US batch, indeed.

 

[RichMurphy]

I see that the July Warner Archive releases were postponed last night by two weeks.

This has nothing to do with any possible "excess inventory" problems.

 

[Josh Steinberg]

It has everything to do with there being limited replication facilities available and the total amount of disc replication orders not being enough to justify the opening of additional plants.

Keep in mind also that the disc may be pressed in one place, the artwork may be printed in yet another place, and the plastic case manufactured in yet another place, and all of those things have to wind up under the same roof to be assembled and then shipped to distributors and retailers. Any delay in any one of those spots can cause something to miss a release date.

This could very well also be an unpublicized impact from the computer hacking/meltdown thing that happened last Friday where computer systems around the world went down and transportation was severely affected. It didn’t just affect passengers waiting in airports; it’s affected the shipping of goods as well.

Discs simply don’t make enough money anymore for studios to pay extreme premiums to jump the line when these things happen, if it were even possible to pay more to expedite things.

 

[jcroy]

By the way, the myth about there only being a single replication plant in North America is just that - a myth.

Where does this "myth" come from?

A boutique insider recently revealed that there are several small operations throughout the country and they are able to take their pick which one to use. There may only be one primary plant in NA but it's not the only one.

Out of the smaller facilities, the only one I'm aware of that is not completely unreliable is CDV/CA (CD Video Manufacturing) from Santa Ana, California. The facility has IFPI mould sid code ALJ** (where ** are alphanumeric wildcards), etched into the first transparent ring away from the center hole of a cd / dvd / bluray disc manufactured there.

https://www.discogs.com/label/382578-CD-Video-Manufacturing?page=1

Over the past several years, I've been buying cd releases from a european record label which include a bluray disc. The american office of this same record label, independently manufactures their own cd / dvd / bluray discs where they have been contracting their bluray disc manufacturing to CDV/CA. (In contrast, I don't trust the disc manufacturing facility the european division has been using to manufacture the european variants of the same cd/bluray releases).

 

[jcroy]

I think we all need to get used to the idea that rigidly accurate street dates are going out the window, and street dates will probably be more reflective of when initial batches of product begin to ship rather than the date that everyone everywhere gets their copy.

Welcome to my world, in a tangential niche unrelated to movies.

For over the past two decades, I have accepted that release street dates are completely unreliable for then-new indie music titles where only 1000 cd (and/or vinyl) copies are manufactured worldwide. Stuff like this is rarely ever dumpbin fodder, unless one comes across a bankrupt record distributor being liquidated.

As a single data point back in the day, I helped out an old friend one afternoon where we took 500 pressed cd discs (on a manufacturer spindle) and placed each disc + cover insert into cd jewel cases. I was told this spindle of pressed cd discs, was delivered incredibly late several months past the original "official release date" for this title.