Early Data Shows Strong Black Friday

[Mr Peabody]

First of all and idiot in office already threw money at anything. The incoming president is planning to create jobs by embarking on one of the largest infastructure rebuilding projects in 50 years. So maybe, you, should, watch the news more.

My point is, sure times are bad, more so for some than others, but what should they do? I think you have to say we just took a hard shot and now how do we battle back. You seem to say, well I just took a hard shot so let's roll over and die.

[Woochifer]

First of all and idiot in office already threw money at anything. The incoming president is planning to create jobs by embarking on one of the largest infastructure rebuilding projects in 50 years. So maybe, you, should, watch the news more.

Given that the construction sector has been hit the hardest, infrastructure is one of the most sensible ways of generating economic activity and getting people back to work. In contrast, stimulus checks have always been an asinine idea because most of that money goes towards paying off personal debt (laudable pursuit, but one that does not stimulate the economy) or purchasing imported goods (nice for workers in China, but not here at home).

My point is, sure times are bad, more so for some than others, but what should they do? I think you have to say we just took a hard shot and now how do we battle back. You seem to say, well I just took a hard shot so let's roll over and die.

Even in bad times, a household still has to make retail purchases -- a point that seems to elude pix. October was generally regarded as a disastrous month for the retail sector. And what constituted a disaster? A 3% reduction in overall retail sales. It's a sobering number primarily because it's the biggest retail retraction in more than two decades. In absolute numbers, it's not huge. But, given how thin the margins are in retail, that's still enough to create a lot of pain for retailers. The danger lies in how it can setup a downward spiral effect that creates persistent sales declines in the months ahead.

What people are doing right now is shifting their priorities around, and deferring wherever they can. A 3% reduction in retail demand is not a fundamental change overall, but that reduction is not evenly distributed. For example, grocery stores sales went up as they always do, but electronics stores took a big hit (Best Buy reported an 18% sales decline).

In the short-term, no doubt things will get worse. I think the holiday season is salvagable primarily because of pent up demand from October and November masking any reductions in gift and discretionary spending, and because energy costs are way down right now. The real pain in the retail sector will likely start in January and February, especially if stores still have a lot of inventory that they didn't unload in December. At that point, I think consumers will do more reassessment of their shopping habits and you'll see more store closures.

If you're looking for a silver lining, the end of any recessionary cycle is usually accompanied by an upsurge in consumer spending. All in all though, retail growth is primarily a function of population and income growth. Shifts in consumer spending habits not driven by population and income usually take time.

[Feanor]

Given that the construction sector has been hit the hardest, infrastructure is one of the most sensible ways of generating economic activity and getting people back to work. In contrast, stimulus checks have always been an asinine idea because most of that money goes towards paying off personal debt (laudable pursuit, but one that does not stimulate the economy) or purchasing imported goods (nice for workers in China, but not here at home).
...

If you're looking for a silver lining, the end of any recessionary cycle is usually accompanied by an upsurge in consumer spending. All in all though, retail growth is primarily a function of population and income growth. Shifts in consumer spending habits not driven by population and income usually take time.

A tax reduction? A tax credit in the mail? The poor will either buy imported goods or pay down debts -- and the rich invest abroad.

A stimulus based on consumer spending could be a big problem in that the underlying problem is the the consumers have been spending away beyond their means in recent decades. It's not simplistic to say this is why the current finacial crisis is called a credit crisis. If anyone's going to borrow now, it's got to be the government and they have got to spend it on direct job creation, e.g. infrastucture, which would be to make a problem into an opportunity.

In general, the US needs an interval of a few years during which demand is realigned from junky consumer crap, (say Blu-Ray players), to things that will boost the nation's mid- and long-term compeditiveness and help the environment. And consider this: tax increases aren't necessarily anti-stimulus in this realignment because we aren't relying on consumer demand or private business investment for the stimulus. The money is just as "spent", and perhaps much better spent, on infrastructure as on buying Blu-Rays or building shopping centers.

[Woochifer]

A stimulus based on consumer spending could be a big problem in that the underlying problem is the the consumers have been spending away beyond their means in recent decades. It's not simplistic to say this is why the current finacial crisis is called a credit crisis. If anyone's going to borrow now, it's got to be the government and they have got to spend it on direct job creation, e.g. infrastucture, which would be to make a problem into an opportunity.

Infrastructure investment also makes the economy more competitive. I agree with the notion of direct job creation, especially given how many construction workers are unemployed right now. Like I said elsewhere, retail is a function of population and income. If you want to maximize an economic stimulus, you invest it in areas that can either create wealth in the long run (i.e., technology, research, etc.) or otherwise make an economy more competitive (i.e., infrastructure modernization).

In general, the US needs an interval of a few years during which demand is realigned from junky consumer crap, (say Blu-Ray players), to things that will boost the nation's mid- and long-term compeditiveness and help the environment. And consider this: tax increases aren't necessarily anti-stimulus in this realignment because we aren't relying on consumer demand or private business investment for the stimulus. The money is just as "spent", and perhaps much better spent, on infrastructure as on buying Blu-Rays or building shopping centers.

In actuality, consumer spending does not vary all that much from year to year. What does vary is where that spending goes. It represents 2/3 of the economy, but it's the other 1/3 of the economy that actually generates the most high value added activity and wealth. That high value added activity is what needs the most investment.

[Sir Terrence the Terrible]

Well, I do not know how all of retail did, but the month of November was a record sales month for Bluray players and discs. There has been a build up since the summer, but November player sales(and I do not have the exact figures yet, will have them this Wednesday) apparently were so good, that it equalled a complete quarter of sales from 2007 in a single month. Bluray disc sales are pushing replication capacity to its edge, with some titles representing over 25% of the total disc sales. I do not know what is going to happen in the future, but right now Bluray product sales are just blowing up huge, much to everyone surprise, and even during these trying economic times.

[Woochifer]

Well, I do not know how all of retail did, but the month of November was a record sales month for Bluray players and discs. There has been a build up since the summer, but November player sales(and I do not have the exact figures yet, will have them this Wednesday) apparently were so good, that it equalled a complete quarter of sales from 2007 in a single month. Bluray disc sales are pushing replication capacity to its edge, with some titles representing over 25% of the total disc sales. I do not know what is going to happen in the future, but right now Bluray product sales are just blowing up huge, much to everyone surprise, and even during these trying economic times.

Amid the negativity from the tech press, it looks like Blu-ray's going to be this holiday season's big winner. I posted another thread indicating that the Samsung BD-P1500 is currently the #1 consumer electronics item on Amazon -- outselling the Apple iPods, all digital cameras, and all other audio/video products.

I think the signs of Blu-ray's ascendancy is with the disc sales and their increasing market share. Consider that Casino Royale was the first BD title to sell over 100,000 copies, and that only happened last year. Iron Man was the first title to break 500,000, and now The Dark Knight is poised to sell over 1 million copies. Bill Hunt pointed out that The Matrix was the first DVD title to sell over 1 million copies, and that occurred in 1999, close to three years after the DVD format's introduction. Right now, Blu-ray's barely two years old.

The remaining issue I think that might still stumble the Blu-ray format is disc pricing. The CE manufacturers have already lowered the hardware price points, but the BD disc prices cannot stay at current levels if the studios are serious about growing the format.

Even though Blu-ray list prices are comparable to special edition DVDs, and their list prices are now within about $5-$7 of a movie-only DVD release, retailers do not treat Blu-ray as a loss leader like they do with DVD. I just saw that Circuit City will sell The Dark Knight DVD for $15, and charge $27 for the Blu-ray version. A lot of this is on the retailers, but the studios also have some control over wholesale pricing and the MAP (minimum advertised price) agreements.

[Sir Terrence the Terrible]

Amid the negativity from the tech press, it looks like Blu-ray's going to be this holiday season's big winner. I posted another thread indicating that the Samsung BD-P1500 is currently the #1 consumer electronics item on Amazon -- outselling the Apple iPods, all digital cameras, and all other audio/video products.

The funny thing is, while the quality challenged Samsung player is doing so well, It looks like all players, with the exception of the high end are all doing very well.

I think the signs of Blu-ray's ascendancy is with the disc sales and their increasing market share. Consider that Casino Royale was the first BD title to sell over 100,000 copies, and that only happened last year. Iron Man was the first title to break 500,000, and now The Dark Knight is poised to sell over 1 million copies. Bill Hunt pointed out that The Matrix was the first DVD title to sell over 1 million copies, and that occurred in 1999, close to three years after the DVD format's introduction. Right now, Blu-ray's barely two years old.

Iron Man is pretty close to a million now, and still going strong. Warner is shipping over a million copies of TDK to cover advance orders already placed. This titles should reach a couple million in sales before it is all said and done. All of Disney's titles are doing extremely well at this point. However Disney is not suffering the same DVD sales decline the other studio are. We have actually increased our DVD sales over the last four years or so, Bluray is just gravy right now.

The remaining issue I think that might still stumble the Blu-ray format is disc pricing. The CE manufacturers have already lowered the hardware price points, but the BD disc prices cannot stay at current levels if the studios are serious about growing the format.

Even though Blu-ray list prices are comparable to special edition DVDs, and their list prices are now within about $5-$7 of a movie-only DVD release, retailers do not treat Blu-ray as a loss leader like they do with DVD. I just saw that Circuit City will sell The Dark Knight DVD for $15, and charge $27 for the Blu-ray version. A lot of this is on the retailers, but the studios also have some control over wholesale pricing and the MAP (minimum advertised price) agreements.

Wooch, people have found out about Amazon where the typical price of a disc is closer to $20 rather than the pricing structure of a brick and motar. The DVD will not have a digital copy, but the bluray will though. I have about 500 bluray's now. Putting aside the review copies I have received, I have paid an average of about $22 per disc. On Black Friday I bought about 15 blurays, and paid an average of $15 for each.

They are still building replication lines to meet demand, so the cost of discs is probably going to remain pretty stable or may drop just a bit through 2009. After that, I see the price dropping to about DVD levels, as the infrastructure will be pretty built out by then.

[Woochifer]

Iron Man is pretty close to a million now, and still going strong. Warner is shipping over a million copies of TDK to cover advance orders already placed. This titles should reach a couple million in sales before it is all said and done. All of Disney's titles are doing extremely well at this point. However Disney is not suffering the same DVD sales decline the other studio are. We have actually increased our DVD sales over the last four years or so, Bluray is just gravy right now.

I have a feeling that The Dark Knight will be in short supply after tomorrow. Seems like a huge groundswell among Blu-ray player owners for that title.

For Disney, I would guess that it doesn't hurt having Pixar in the stable! Wall-E was my second BD purchase (after Blade Runner).

Wooch, people have found out about Amazon where the typical price of a disc is closer to $20 rather than the pricing structure of a brick and motar. The DVD will not have a digital copy, but the bluray will though. I have about 500 bluray's now. Putting aside the review copies I have received, I have paid an average of about $22 per disc. On Black Friday I bought about 15 blurays, and paid an average of $15 for each.

They are still building replication lines to meet demand, so the cost of discs is probably going to remain pretty stable or may drop just a bit through 2009. After that, I see the price dropping to about DVD levels, as the infrastructure will be pretty built out by then.

I'm kinda old school in that I don't like to deal with mail order! For price on new releases, I now go to Fry's (selling The Dark Knight for $24, which matches Amazon). Otherwise, I'll look at BB, CC, or Target if they have some exclusive bonus or collectible casing (the exclusive "transformable" DVD case at Target for Transformers is one of the coolest things ever to sit on my media shelf!).

I also tried to support certain stores where people I knew worked. Not going down to SoCal as much as before, but I used to save many of my DVD purchases for the DVD Planet store down in Huntington Beach. They supposedly have the largest DVD title selection of any B&M store (thumbing through their bins, I can always find some obscure gem that I never knew about), and their pricing is very reasonable (not the lowest on the week of release, but their regular prices are generally lower than other stores). I like to try and do my part to keep the lights on at places like that, since comparable stores around the Bay Area like Laser City in SF and Cinema Laserland in San Jose have closed in recent years.

But, even Amazon can only discount so much when studios issue Blu-ray titles like Independence Day with a $40 list price. This is ridiculous, given that the DVD version in its various special edition incarnations had its list price reduced to below $20 ages ago, and the BD version doesn't provide anything new aside from higher resolution.