Quote Originally Posted by Smokey
That seem logical and normal, but there are only so many new releases a week.

Let say that we have 10 new major movie releases a week which add up about 500 titles a year. And lest say that majority of DVD sold were mew release which date back to 10 year ago when DVd was launched. That would only make it 5000 titles.

Given that there are catalog of 100,000 DVD titles, how can movie studio make more money on 5000 titles than 95,000 titles? Given that new titles cost about $15, I think majority of buyers wait till price drop to around $10 before making the purchase. And 5000 titles for $10 does not yield significant revenue compare with 95,000 titles which sell about $7.50 (Walmart average price on most DVD).

So suggesting that home video market is mostly driven by new releases somehow does not add up
Like I said, it's not about what you think adds up, but what actually adds up in the market. You're simply ignoring the magnitude by which the top selling titles outsell the rest of the available titles. This is no different than the music industry, which releases thousands of titles annually, yet the majority of their sales comes from only a small group of best selling titles, nearly all of which are new releases.

The weekly sales charts published by Nielson Videoscan illustrate how great the magnitude of difference is between the new releases and the catalog releases. And every article I've ever read on this subject indicates that new releases are the most important revenue generator for the studios.

The #1 selling video title in any given week is almost always a new release, and more often than not, that title outsells the #2 title by a magnitude of 3X, 4X, or even 10X. Go further down the list, you might find the top selling title outselling the #10 title by 10x, or even 50x or more.

On any given week, new releases make up the majority of the top selling DVD titles. This week's top 10 selling DVDs includes ZERO catalog titles, it's all new releases. And dating back over the past five years, you'd be hardpressed to find any week with more than two or three catalog titles ranked in the top 10 in any given week.

Also consider that a hit title like Finding Nemo sold upwards of 40 million copies on DVD, about half of that total during the first week of release. Warner would be happy if any of their classic DVD reissues sell 100,000 copies, yet Finding Nemo alone sells 400X that amount. The Spider-Man and Lord of the Rings titles each sold over 20 million copies, and now you have seven titles ALONE outselling the equivalent of 1,600 catalog releases (and that's using an optimistic assumption of 100k in sales for a catalog reissue). Add the other new releases that come out on a weekly basis that routinely outsell the catalog releases by orders of magnitude, and suddenly the math begins to add up in a hurry.

Your market assumption about people waiting until prices drop down to $10 before sales take off is just flat out wrong. Just like movies will typically make 30-50% of their total box office take during the first weekend, the same holds true for DVD releases -- new releases tend to have their highest sales totals during the first week and drop off every week thereafter.

The reason why DVD prices drop down to $10 in the first place is because they NO LONGER sell well, and the studio or retailer needs to move inventory. Think about it, if demand is at its peak, why would prices drop at that time? And when prices drop down to that $10 price point, when you have ever seen that title in the top 10?