Blu-ray Titles Outsell DVD Counterparts on Amazon

[Woochifer]

Granted, this is just a simple read off of Amazon's sales charts, but it looks like more and more consumers have begun to opt for the Blu-ray version instead of the DVD. According to High Def Digest, the Amazon sales charts that they checked found that the Blu-ray versions for Up, Harry Potter, and Star Trek have begun outselling the DVD versions.

Blu-ray generally accounts for a higher percentage of sales on Amazon than at other retailers, but it looks like Blu-ray has some big momentum heading into the peak holiday shopping period. And this is the first time that I've seen so many high profile releases come out with Blu-ray ahead of DVD, especially after the first week. Previously, the Blu-ray sales share would come out higher in the first week and then taper off afterwards.

http://www.highdefdigest.com/news/sh...on_Amazon/3857

Maybe this will finally put an end to the canned "Do or Die Time for Blu-ray" articles that the download/streaming-obsessed tech writers keep posting every year? Nah, sales data and reality-based analysis never stopped them!

[kexodusc]

Good to see the momentum continues for BluRay. I haven't purchased or rented a DVD in almost 18 months now, I assume most other BluRay owners are behaving the same way for the most part. That swing has a leveraged effect. Each new BluRay customer probably translates into 1 lost DVD customer going forward, so we might expect the gap to decrease quite rapidly over the next year.

[audio amateur]

In England and France, Blu is being promoted but from what I can see in stores, DVD sales prevail majorly. Comparing the number of DVDs to that of Blus in-store, Blu appears to be a niche market. Prices are still quite high (lowest Blu price I've seen in stores is about 10 GBP (16 bucks), whereas the cheapest DVDs are 3 GBP (5 bucks)).
The shear selection, availabilty and low price of DVDs mustn't be helping Blu sales here.

However I have noticed they are cutting Blu (and DVD) prices like mad on Amazon UK for Christmas. Some Blus are down about 70% in price.
As for players, prices are still relatively high (the cheaper blu players are around a 140$).
Blu will no doubt prevail but it just hasn't taken off completely here. Blu prices need to fall some and there needs to be more Blu films available.

[Feanor]

Granted, this is just a simple read off of Amazon's sales charts, but it looks like more and more consumers have begun to opt for the Blu-ray version instead of the DVD. According to High Def Digest, the Amazon sales charts that they checked found that the Blu-ray versions for Up, Harry Potter, and Star Trek have begun outselling the DVD versions.

Blu-ray generally accounts for a higher percentage of sales on Amazon than at other retailers, but it looks like Blu-ray has some big momentum heading into the peak holiday shopping period. And this is the first time that I've seen so many high profile releases come out with Blu-ray ahead of DVD, especially after the first week. Previously, the Blu-ray sales share would come out higher in the first week and then taper off afterwards.
...

I'm taking note of this. To me it seems like an important inflection point in Blu-ray progress.

As I said recently, if my DVDP poops out I'd prefer to get a BRP despite that I'm holding off on an HDTV. Any good cheap BRPs out there? Can I still get S-Video and coax outputs with the appropirate down-conversion?

[02audionoob]

I'm taking note of this. To me it seems like an important inflection point in Blu-ray progress.

As I said recently, if my DVDP poops out I'd prefer to get a BRP despite that I'm holding off on an HDTV. Any good cheap BRPs out there? Can I still get S-Video and coax outputs with the appropirate down-conversion?

There's something I never noticed...My LG BD370 doesn't have S-Video output. My Sony BDP-S350 does, though.

[Sir Terrence the Terrible]

I knew this was going to happen, and I am glad it has. We now have a format that bit for bit matches the audio quality of the audio master tapes, and looks as close to the film printmaster as video allows, and we are getting it all in our homes for a average price of about $20.

There are some in Hollywood (the Hollywood press) who believe that based on this, the prices of Blu ray hardware and software are going to be commoditized too quickly, which will erode profits sooner than DVD has. I don't believe this. The goal is to sell as many disc as you can when you can - and based on that goal you must price your product competitive, and now at least the retailers have. No doubt, prices will go back up - but they won't be nearly as high as they once were, and I think that is good for what most of the studios desire...sell HD on disc.

[Woochifer]

More news on Blu-ray's current surge. Costco is ramping up its Blu-ray selection by 50%, and expanding its Blu-ray offerings.

http://www.videobusiness.com/article...?desc=topstory

In fact, Costco has made Blu-ray the shining star of its media department this month, because store management believes its customers will be strongly attracted to Blu-ray.

“Blu-ray Disc movies are now the focus of our department,” said Blu-ray/DVD buyer Claudia Augello in the publication. “Members will always find at least 100 titles. But for the holidays, we’ve brought in more than 150. We pride ourselves on offering the newest releases at great savings.”

According to Costco's DVD/Blu-ray buyer, their Blu-ray player sales are up 450% over last year. These numbers match the accelerated growth trend with the DVD format in its 4th year.

[Woochifer]

I knew this was going to happen, and I am glad it has. We now have a format that bit for bit matches the audio quality of the audio master tapes, and looks as close to the film printmaster as video allows, and we are getting it all in our homes for a average price of about $20.

Which is why I find the download/streaming fanboys in the tech press so puzzling. They are so bent against disc media, that they'd rather stick with highly compressed picture quality, sub-DD/DTS quality audio, and deal with all the DRM and other hassles with downloaded/streaming media just for the "convenience" of having everything streamed.

There are some in Hollywood (the Hollywood press) who believe that based on this, the prices of Blu ray hardware and software are going to be commoditized too quickly, which will erode profits sooner than DVD has. I don't believe this. The goal is to sell as many disc as you can when you can - and based on that goal you must price your product competitive, and now at least the retailers have. No doubt, prices will go back up - but they won't be nearly as high as they once were, and I think that is good for what most of the studios desire...sell HD on disc.

Maintaining high margins makes sense for a new media format that's moving less than 1% of the total market. But, if you got Blu-ray now ramping up the growth trend way above 100% year-to-year growth, it makes no sense to try and pull it all back. Go back to the higher price points, and that will blunt the momentum that Blu-ray now has. Better to hit the pedal to the metal. Sheer volume will more than make up for any erosion in the margins.

[rob_a]

Better to hit the pedal to the metal. Sheer volume will more than make up for any erosion in the margins.

I agree; the market is not in any position to increase prices on any tech products this year, especially with the weak economy. Main stream consumers are just now becoming comfortable with the prices on the market now. A good way to doom an emerging technology would be to raise prices back up, even those not as high as they once were, I would suspect buyer will hold out again until they come back down. There is just not enough die hard supporters yet that would overcome this. Remember back, about two years ago when the market was still a sellers market and the war between HD-DVD and Blu-Ray ended, people said, "great, so what!" Prices are the key. All in all, I do think Blu-Ray will catch like DVD did and the prices will come down a little bit more.

[pixelthis]

Good to see the momentum continues for BluRay. I haven't purchased or rented a DVD in almost 18 months now, I assume most other BluRay owners are behaving the same way for the most part. That swing has a leveraged effect. Each new BluRay customer probably translates into 1 lost DVD customer going forward, so we might expect the gap to decrease quite rapidly over the next year.

Why buy a disc except to collect, and then the obvious answer is Blu.
I havent bought a DVD either.
Like I tried to explain to Mr P, time spent watching an inferior pic is time you don't get back.
I don't watch VHS anymore either.

[rob_a]

Why buy a disc except to collect, and then the obvious answer is Blu.
I havent bought a DVD either.
Like I tried to explain to Mr P, time spent watching an inferior pic is time you don't get back.
I don't watch VHS anymore either.

Good point, DVD picture quality is showing it's age. I have not rented a DVD in about 8 months, and haven't watch VHS in about 5 years. Had an ex-girlfriend that loved VHS, but that's another story for another time

[Sir Terrence the Terrible]

I agree; the market is not in any position to increase prices on any tech products this year, especially with the weak economy. Main stream consumers are just now becoming comfortable with the prices on the market now. A good way to doom an emerging technology would be to raise prices back up, even those not as high as they once were, I would suspect buyer will hold out again until they come back down. There is just not enough die hard supporters yet that would overcome this. Remember back, about two years ago when the market was still a sellers market and the war between HD-DVD and Blu-Ray ended, people said, "great, so what!" Prices are the key. All in all, I do think Blu-Ray will catch like DVD did and the prices will come down a little bit more.

Here is the rub, everything right now IMO is artificially priced. Nothing right now is reflecting their true value because retailers are offering discounts to spur sales across the board on every product out there. If we were not in a big recession, I don't think prices would be quite this low. Anyone selling a high definition movie for under $25 is taking a loss and leveraging the movie against other products they sell. If the American public expects things to remain cheap as dirt, then the whole retail economy will have to downsize to accomodate lower margins on the products they sell.

I personally expect to see prices rise to near $25 per movie for a new release, but no more than that. Catalog should remain under $20, because that is where sales need the most boost, not with new releases.

[Woochifer]

Here is the rub, everything right now IMO is artificially priced. Nothing right now is reflecting their true value because retailers are offering discounts to spur sales across the board on every product out there. If we were not in a big recession, I don't think prices would be quite this low. Anyone selling a high definition movie for under $25 is taking a loss and leveraging the movie against other products they sell. If the American public expects things to remain cheap as dirt, then the whole retail economy will have to downsize to accomodate lower margins on the products they sell.

And I think that's the big conundrum that the industry will need to come to grips with when the holiday shopping season concludes. It is an artificial and subsidized price point right now, one that has been pushed by retailers willing to use Blu-ray (and DVD as well) as a loss leader and take bigger losses than usual to drive shoppers to their stores/websites. But, it's also fueling the format's growth and bringing a lot of new customers into the Blu-ray tent. Those new consumers and established BD buyers alike are looking around and like what they see with these new disc prices.

There will be a lot of market pressure to make these price points more or less permanent, and that's where I think the studios would be smart to lower the wholesale costs so that retailers can at least come close to these price points without taking a bath on every unit sale. We're at that point where Blu-ray can generate volume, and it's to everyone's benefit to keep the momentum going. With player sales way up this holiday season, and lots of new BD player owners looking to pick up a few titles, the last thing the format needs is sticker shock putting a stop to that. Whatever the lower margins take away can be made up with higher volume.

I personally expect to see prices rise to near $25 per movie for a new release, but no more than that. Catalog should remain under $20, because that is where sales need the most boost, not with new releases.

Once you get outside the week-of-release discounting, the new release pricing at most retail stores remains close to $30 ($35 in the case of Up and even Monsters, Inc.). That's higher than most mainstream consumers are willing to fork over, especially if the DVD copy sells for $10 less. Blu-ray is transitioning into a mainstream format, and those consumers will not go along with early adopter pricing.

[Feanor]

Here is the rub, everything right now IMO is artificially priced. Nothing right now is reflecting their true value because retailers are offering discounts to spur sales across the board on every product out there. If we were not in a big recession, I don't think prices would be quite this low. Anyone selling a high definition movie for under $25 is taking a loss and leveraging the movie against other products they sell. If the American public expects things to remain cheap as dirt, then the whole retail economy will have to downsize to accomodate lower margins on the products they sell.

I personally expect to see prices rise to near $25 per movie for a new release, but no more than that. Catalog should remain under $20, because that is where sales need the most boost, not with new releases.

So what does a retailer, (other than Wal-Mart), pay for a BR copy?

What is the variable cost to produce a physical BR copy? How much more does it cost to distribute 100 BR copies instead of 10. What is the advertising cost to sell 1000 BRs instead of 50? Answer these questions and I'll be better convinced that $25 a copy is loosing proposition.

Remeber, the total costs of production are mostly "sunk" costs and the costs of advertising and distribution not fully variable by unit. If you can't sell BR as a up-market product at a very high pice, then you have to do volume. It's too late to sell BR as a truly up-market product.

[Geoffcin]

Once you get outside the week-of-release discounting, the new release pricing at most retail stores remains close to $30 ($35 in the case of Up and even Monsters, Inc.). That's higher than most mainstream consumers are willing to fork over, especially if the DVD copy sells for $10 less. Blu-ray is transitioning into a mainstream format, and those consumers will not go along with early adopter pricing.

I think Woochs last sentence says it all. Once you've price pointed yourself at a mainstream price of $10-$20, nobody is going to pay >$30 anymore. With entrey level BR players now selling in the under $100 "The bloom is off the rose" as far as people willing to pay a premium for "early adopter" status. If after the holiday season they think otherwise then you can be assured that sales will drop like a stone, even if the've managed to sell a bunch of discounted players.

[Invader3k]

If they are smart at all they won't jack the prices back up after the holiday season. People will stick to older titles and DVD rather than pay upwards of $30 for new titles when they are used to paying $20 or less.

[Woochifer]

So what does a retailer, (other than Wal-Mart), pay for a BR copy?

My understanding is that it's somewhere around $22, depending on the title. A few weeks ago, I bought Up and Monsters, Inc. for a combined price of $27. You can do the math on how much Best Buy lost on that purchase.

What is the variable cost to produce a physical BR copy? How much more does it cost to distribute 100 BR copies instead of 10. What is the advertising cost to sell 1000 BRs instead of 50? Answer these questions and I'll be better convinced that $25 a copy is loosing proposition.

That I don't know, but I'm pretty sure that the margins are higher for Blu-ray than DVD. I don't think the pricing has anything to do with production costs. Recall that the record companies used that excuse to charge extra for CDs, promising that the prices would go down once volumes picked up. They never did, and they wound up cutting out the lower priced LP and cassette formats instead.

The premium pricing has more to do with the higher resolution video and audio, and the bonus features that come with most BD releases. At the early adopter stage, that higher pricing is justified because you got a smaller group of consumers that are not as price conscious as the mainstream market. Early adopters are willing to pay extra for higher quality and the privilege of being one of the first.

Blu-ray is now moving beyond the early adopter stage, and it's at a point where holding the line on pricing can present a serious impediment to the format's growth. The same thing happened with the DVD format. Early disc prices were closer to $40 (the established price point with Laserdiscs), and they gradually inched down as the format caught on.

If they are smart at all they won't jack the prices back up after the holiday season. People will stick to older titles and DVD rather than pay upwards of $30 for new titles when they are used to paying $20 or less.

Who are "they"?

Retailers are not going to continue with this price war indefinitely - they're losing too much money on each one of these heavily discounted BD sales right now. It makes sense over the holidays because they're trying to one up one another and drive traffic towards their stores and websites in hopes that consumers make other higher margin purchases.

The only way that these prices won't go back up after the holidays is if the studios lower the wholesale costs.

[Geoffcin]

The only way that these prices won't go back up after the holidays is if the studios lower the wholesale costs.

I think that's exactly what's going to have to happen. There's no way the studios can continue to justify charging more for something that essentially costs them the same to produce as a DVD.

[Woochifer]

I think that's exactly what's going to have to happen. There's no way the studios can continue to justify charging more for something that essentially costs them the same to produce as a DVD.

I think they can to some degree, but not to the extent that they do now. The current list prices for most new releases are roughly $30 for DVD, $35 for special edition DVD, and $40 for Blu-ray (obviously the street prices are less). At the very least, I think it's at a point where the Blu-ray pricing needs to reach parity with where the special edition DVDs are (the limited number that do come out nowadays). If for no other reason, I think this should be done because special edition DVDs are on their last legs. The consumers likeliest to purchase those loaded collectors edition DVDs are the same consumers that will transition over to Blu-ray first.

That would place the price point squarely at a $25 street price for new releases with the week-of-release markdowns at $20. I think that's a fair price, and would strike the best balance between sustaining the market growth and keeping the margins acceptable to the studios and retailers.