Blu-ray Disc is not being adopted as fast as once expected, but the format’s relatively steady growth remains a huge driver for the home entertainment business, according to Futuresource Consulting. At a presentation at the Entertainment Supply Chain Association Conference here Tuesday, Futuresource predicted that by 2012, Blu-ray software sales will make up half of home entertainment business.

The company downgraded its original expectation of 95 million software units sold this year to 75 million at least partly due to weak software attachment rates to the PlayStation 3, which is the most popular Blu-ray player in households. PS3 owners generally purchase one to two Blu-ray film/TV titles each year, versus the five to eight such titles that Blu-ray set-top-player owners purchase annually.

As the maturing standard-definition DVD market should continue to lose value—down 13% in revenue in the U.S. in 2009, estimates Futuresource—Blu-ray’s momentum will be responsible for stabilizing the category. With Blu-ray software making up 50% of the market in 2012, digital will comprise 29%, split between TV video-on-demand at 16%, online video at 10% and mobile sales at 3%.

“Blu-ray is vital and important to keeping disc volume healthy,” said Casey. “Blu-ray is going to help sustain a flat packaged-media market.”

http://www.videobusiness.com/article/CA6667297.html

ESCA: Blu-ray will be 50% of market by 2012

In the USA maybe and thats a big MAYBE, the rest of the world? not gonna happen.

In the USA maybe and thats a big MAYBE, the rest of the world? not gonna happen.

They say now that 14.8% of US households will have some kind of Blu-ray playback capability by 2010. So by 2012 it seems pretty far fetched they'll gain another 35% but I guess we'll see. I guess they are counting PS3s and all that. I guess that's ok.

The real issue is not BD Playback but the attachment ratio and I think it's very low especially with PS3 crowd.

What they mean is DVD sales will finally decline enough to match Blu-Ray sales!

Blu-ray sales to account for half of all discs sold by 2012

According to UK market research outfit Futuresource Consulting, Blu-ray software sales could account for half of all packed video media by 2012, but sales at present are not meeting expectations.

It seems that owners of the Sony super-console only buy one or two BD movies a year, compared to between five and eight from owners of standalone players.

http://www.techradar.com/blogs/article/blu-ray-sales-to-account-for-half-of-all-discs-sold-by-2012-611030?src=rss&attr=all

What they mean is DVD sales will finally decline enough to match Blu-Ray sales!

There is a lot of truth in that statement.

too optimistic.

Something doesn't sound right here or at least I'm not getting it..

When the company recently surveyed consumers, 85% of Blu-ray households said they buy discs versus 62% of non-Blu-ray owners. Also, 81% Blu-ray owners said they rent discs, compared to 59% of non-owners who said the same. With purchasing new movies online, the breakdown was 11% Blu-ray, 3% non-owners."

So if number of Blu-ray households they actually buy discs why is the attachment ratio so low? And also 81% Blu-ray owners rent?! This seems like non-owners actually buy more. These numbers don't really make sense.

And what does this mean?


"Now, household penetration of high-definition hardware in the U.S. is split 3% set-top and 6% PS3. That will switch in 2012 to 53% set-top and 22% PS3."


So what constitutes household penetration of 91%? So percentage of Blu-ray households will be 75% by 2012? Is that what they are claiming? Can someone clarify this for me?

I can't get to the article. Are the talking revenue again? Do they mean for every $100 spent, people will buy two $25 BDs, four $5 DVDs, and the rest on digital?

And what does this mean?

"Now, household penetration of high-definition hardware in the U.S. is split 3% set-top and 6% PS3. That will switch in 2012 to 53% set-top and 22% PS3."

So what constitutes household penetration of 91%? So percentage of Blu-ray households will be 75% by 2012? Is that what they are claiming? Can someone clarify this for me?

According to Adams - 111 million households in the USA.

2% = 2.22 million SAL BD players

6% = 6.66 million PS3's

In 2012 the %'s/#'s will be:

53% = 58.83 million SAL BD players

22% = 24.42 million PS3's (does Sony know this? :D)

Total number of BD capable players in the USA = 75% or 83.25 million

So I got a question here for you . . .

Does that mean that HDTV's will be in at least 75% of all USA HH's by 2012?

I can't get to the article. Are the talking revenue again? Do they mean for every $100 spent, people will buy two $25 BDs, four $5 DVDs, and the rest on digital?

It is talking revenue. They are saying that the pie will be split with Blu-ray taking 50%, digital taking 29% and DVD taking 21% in 2012.

I think much of this hinges on DVDs continued decline. From what I can tell, DVD sales are declining faster than Blu-ray sales can grow which is making it easier to get to 50% of a shrinking pie.

According to Adams - 111 million households in the USA.

2% = 2.22 million SAL BD players

6% = 6.66 million PS3'sAdams Research for the end of 2008 gave the figures in this article (http://www.homemediamagazine.com/blu-ray-disc/bda-adams-dispute-harris-survey-blu-ray-16189) as 3.1 million homes with a stand alone Blu-ray player and 9 million homes with a stand alone Blu-ray player, a PS3, or both.


Does that mean that HDTV's will be in at least 75% of all USA HH's by 2012?Only if you were to make three assumptions. The first assumption is that the Futuresource prediction will be accurate. The second assumption is that no household who owns a Blu-ray player will also own a PS3. The third assumption is that every household who owns a Blu-ray player or PS3 will also own an HDTV. Just a guess but I think that the second and third assumptions would not be supported by Futuresource.

Adams Research for the end of 2008 gave the figures in this article (http://www.homemediamagazine.com/blu-ray-disc/bda-adams-dispute-harris-survey-blu-ray-16189) as 3.1 million homes with a stand alone Blu-ray player and 9 million homes with a stand alone Blu-ray player, a PS3, or both.

If you look at my post - you will see what I am responding to. ;)


Only if you were to make three assumptions. The first assumption is that the Futuresource prediction will be accurate. The second assumption is that no household who owns a Blu-ray player will also own a PS3. The third assumption is that every household who owns a Blu-ray player or PS3 will also own an HDTV. Just a guess but I think that the second and third assumptions would not be supported by Futuresource.

And part of the 2012 prediction/forecast is that BD players will be $50. What will be the point of buying a DVD player (unless all you want is a $20 DVD player) at that price. Even if you only have a SDTV - use the analog outputs (composite and S-Video)

Predictions are nice - you have to wait years into the future to see if you are right or not. :D

Predictions are nice - you have to wait years into the future to see if you are right or not. :D

And are we forgetting that it's the end of the world in 2012? So we might never know :D

And are we forgetting that it's the end of the world in 2012? So we might never know :D
This article says that in 2012 Blu-ray HD revenue will 50% and online video will be 10%. I wonder what percentage of that online revenue will be HD. If even half of the online revenue is HD that still means that for HD physical media will still be 10x that of online video.

http://www.videobusiness.com/article/CA6667297.html

Very optimistic since BD market share relative to DVD hasn't changed in 6 months now. Looks like all the Home video buffs came on board by last Dec. At current rate BD will probably be 50% of DVD by 2012 rather than 50% of the market.

It could happen if the studios only make a certain percentage of DVD's and once they are gone, force prople to buy the BD version. If not, then 25-30% may be more realistic.

The numbers could be greater then 50% by 2012.

It basicly comes down to how much the hardware and software manufacturers wants it to be that high.

Sell the BD players at the same price as DVD players, and you remove the reason to buy a DVD player (of course that must include that the BD player is as good as a DVD player in playing a DVD)

Sell BD movies at the same price as DVD or include a BD with every DVD. And people will start to collect BD movies.

Of course this comes with a price for everyone involved, so in the end its just how much they want it to reach this numbers.

But my point is that in the end, its the studios and CE companys, thats holding the cards for adoptions.

The numbers could be greater then 50% by 2012.

It basicly comes down to how much the hardware and software manufacturers wants it to be that high.

Sell the BD players at the same price as DVD players, and you remove the reason to buy a DVD player (of course that must include that the BD player is as good as a DVD player in playing a DVD)

Sell BD movies at the same price as DVD or include a BD with every DVD. And people will start to collect BD movies.

Of course this comes with a price for everyone involved, so in the end its just how much they want it to reach this numbers.

Sell a premium product for the same price as a standard product? I don't see that happening. It removes the extra profit the premium product generates.

You see Hi test gas selling for the same as regular?

But my point is that in the end, its the studios and CE companys, thats holding the cards for adoptions.

Nothing new there. Been that way for over 30 years.

Sell a premium product for the same price as a standard product? I don't see that happening. It removes the extra profit the premium product generates.

You see Hi test gas selling for the same as regular?

Nothing new there. Been that way for over 30 years.DVD was a premium product over VHS too.. prices eventually evened out.
The fact is right now BD is selling to the early adopters willing to pay the price for a new product. As player prices go down selling to a new demographic the studios will have to price the movies accordingly as well.

DVD was a premium product over VHS too.. prices eventually evened out.
The fact is right now BD is selling to the early adopters willing to pay the price for a new product. As player prices go down selling to a new demographic the studios will have to price the movies accordingly as well.

It isn't an issue of player prices going down - it is an issue of people buying the players - in large numbers. That and only that will spur the studios to lower the prices on BD's. Keep in mind that DVD was a revolutionary product while BD is an evolutionary product - not the same thing.

It isn't an issue of player prices going down - it is an issue of people buying the players - in large numbers. That and only that will spur the studios to lower the prices on BD's. Keep in mind that DVD was a revolutionary product while BD is an evolutionary product - not the same thing.Yes but the point is prices can come down. Theres no studio prerogative to keep BD as a premium product all its life like you said. By all means the studios are hoping it does become the 'standard.'

Yes but the point is prices can come down. Theres no studio prerogative to keep BD as a premium product all its life like you said. By all means the studios are hoping it does become the 'standard.'

IMO - as long as they make and sell DVD's, BD's are going to be priced higher (overall). HDTV penetration is at 52% (according to the CEA). We have a long way to go.

Like the consumers will even decide. Once Blu-Ray players hit $50 and under consumers will simply buy them as they play DVDs (upscaled) as well as Blu-Ray's.

Optical media has a long life ahead and at some point, the studios, CE's, and retailers will simply push Blu-Ray and DVD will take second stage in stores.

We saw the exact same thing with the transition from VHS to DVD. With Blu-Ray it is a much easier transition as the players will play DVD discs as well.

IMO - as long as they make and sell DVD's, BD's are going to be priced higher (overall). HDTV penetration is at 52% (according to the CEA). We have a long way to go.Maybe. Ill go with the popular reasoning that BDs will be priced at the point they will make the most money. BDs will follow the usual market curve, and the usual pricing associated with that.
DVDs will probably be cheaper, but only cause studios will be struggling to sell them at normal prices. Or who knows studios may price them the same.

I think the studios will want to maintain multiple price points to maximize overall revenue. Heck they are already doing that with standard and special edition DVDs. Blu-ray just adds yet another price point.

A lot of stores in my area are already starting to push Blu-ray really hard. The front 2 rows at Fry's are Blu-ray. Best Buy is also putting Blu-ray up 'front'. I'm also noticing there are more people browing them than DVD's now.

The tide has turned for sure.

A lot of stores in my area are already starting to push Blu-ray really hard. The front 2 rows at Fry's are Blu-ray. Best Buy is also putting Blu-ray up 'front'. I'm also noticing there are more people browing them than DVD's now.

The tide has turned for sure.

I am not sure the tide has turned. What may be happening based on your post is that your stores are hoping the tide will turn (and they are trying to help) as there is more sales and profit dollars in Blu Ray.

The tide is certainly rising though, if the figures in the article are correct.

On another note, I will think this article is correct when (not if) I see Wal-Mart make a big BD move. When they did that in the VHS to DVD transition, that was the signal that DVD was moving mainstream. And, a few months later you couldn't find a VHS tape anywhere.

http://www.****************/img/i/P.jpgtoo optimistic.http://***************/9/P/i.jpg

Agree..it's all over in 2012 anyway according to the conspiracies

*and that 2012 market will be 50% the size of today's market

*and that 2012 market will be 50% the size of today's marketThere have been many predictions made on this issue and earlier this year Futuresource predicted (http://www.videobusiness.com/article/CA6633623.html) that the physical media market would remain flat until 2012.

There have been many predictions made on this issue and earlier this year Futuresource predicted (http://www.videobusiness.com/article/CA6633623.html) that the physical media market would remain flat until 2012.

Yes, if you take as a given that physical media remains flat, and that DVD falls by 50%, then voila, Blu-ray must be 50% of the market.

I suggest that Bluray picks up market share more by DVD shrinking then bluray growing.

I suggest that Bluray picks up market share more by DVD shrinking then bluray growing.Personally I would consider that to be very unlikely. Even if the physical media market does decrease by 2012, which is a big if, that would require a huge decrease in terms of a percentage.

Personally I would consider that to be very unlikely. Even if the physical media market does decrease by 2012, which is a big if, that would require a huge decrease in terms of a percentage.

The trend is not their friend. Physical media flat in 2012 is even more unlikely.

I don't believe that Blu-ray will succeed. Don't get me wrong. I have a Blu-ray player and love it. It's way better than DVDs, but let's be realistic. Many people just don't get it. There are several people out there insisting that DVD is "good enough" or that there's barely any difference.

ESCA: Blu-ray will be 50% of market by 2012

Not at these prices.

Not at these prices.

Blu-ray Discs are cheap now. I have 12 BDs now and not one of them cost me more than $20. The most expensive one was "Iron Man" which cost me $20. The rest were $15 or less.

It's the Blu-ray players that are still expensive. You can find a decent one for $150 now, but many people are waiting for them to be $100 or less. Until players reach that price, Blu-ray will fail.

So if number of Blu-ray households they actually buy discs why is the attachment ratio so low? And also 81% Blu-ray owners rent?! This seems like non-owners actually buy more. These numbers don't really make sense.

And what does this mean?


It means that most of the people that buy blu-rays also rent them. Duh.:p

The attachment rate is so low because the people that buy, rent 10-20 times more often than they rent. Like me!

I could easily rent ten blu-rays from netflix for the same amount as buying one blu-ray.

Blu-ray Discs are cheap now. I have 12 BDs now and not one of them cost me more than $20.

That's why you most likely have only 12 of them.

The point is that at prices you are mentioning the selection is very limited. It's basically a hook to get your to start buying ones for $20+. And btw, $19.99 for a catalog title that's $6-$8 on DVD is still quite a bit of money IMO.

I have over 120 BDs and maybe 10-15% of them were under $20. The others, even catalog titles were over $20. That's very expensive. I wanted to have those movies on BD and make solid money so it wasn't a huge issue but these days I'm really not willing to shell out that money anymore. They will either lower the prices to normal levels or I'll completely stop buying them. I can live with renting and Vudu.

That's why you most likely have only 12 of them.
I only have 12 because I only had my Blu-ray player for a month. :rolleyes:

In one month, I've already bought 12 BDs. I consider that a lot. In fact, I'm trying to train myself to cut down, but it's hard to resist because of the low prices. Many of the people I know only have like 15-20 DVDs now and they think that's a lot. And yes, they're only DVDs they have, not BDs. It's just us home theater freaks that buy a lot of movies. The average person only has 15-20 movies on their shelf.

Oh and back in 2000, I was buying my DVD titles for $25 a pop. So, DVDs never used to be cheap like they are now.

I only have 12 because I only had my Blu-ray player for a month. :rolleyes:

In one month, I've already bought 12 BDs. I consider that a lot. In fact, I'm trying to train myself to cut down, but it's hard to resist because of the low prices. Many of the people I know only have like 15-20 DVDs now and they think that's a lot. And yes, they're only DVDs they have, not BDs. It's just us home theater freaks that buy a lot of movies. The average person only has 15-20 movies on their shelf.

Oh and back in 2000, I was buying my DVD titles for $25 a pop. So, DVDs never used to be cheap like they are now.

My comment about you only having 12 was not a dig in any way. I was just merely pointing out that there is a very limited selection of those titles and that's with a reason.


Blu-ray prices overall are very expensive. As I said, when you can buy a DVD version of a certain movie for $6-$10, paying $20+ for a Blu-ray version is simply unjustifiably expensive. We know why this is happening anyways. The point of Blu-ray was not so studios can give us 1080p from the goodness of their heart but to exactly do that, sell titles that reached ridiculously low prices at a much higher premium. And I was buying as I saw some worth 2 years ago to pay for a high price. Today, not so much, especially since they've been really botching more and more titles with mediocre encodes at best.

Blu-ray prices overall are very expensive. As I said, when you can buy a DVD version of a certain movie for $6-$10, paying $20+ for a Blu-ray version is simply unjustifiably expensive. We know why this is happening anyways. The point of Blu-ray was not so studios can give us 1080p from the goodness of their heart but to exactly do that, sell titles that reached ridiculously low prices at a much higher premium. And I was buying as I saw some worth 2 years ago to pay for a high price. Today, not so much, especially since they've been really botching more and more titles with mediocre encodes at best.
I just bought "A Clockwork Orange" on BD for $13.99. On DVD, that movie cost $18-20.

Take a look at Amazon. TheDVD version (http://www.amazon.com/Clockwork-Orange-Two-Disc-Special/dp/B000UJ48T0/ref=sr_1_1?ie=UTF8&s=dvd&qid=1246824194&sr=1-1) cost $17.99 while theBlu-ray version (http://www.amazon.com/Clockwork-Orange-Blu-ray-Malcolm-McDowell/dp/B000Q678OO/ref=ed_oe_blu) only cost $13.99. And that's just one movie. There are many other BD movies out there that are cheaper than their DVD counterparts. But on the other hand, some are equal in price and there are some BDs that are about $2 more, at most, than their DVD counterpart.

And again. Blu-ray is only 2-3 years old. When DVD was that young, movies were expensive. People keep forgetting that. The DVD format is over 10 years old and that's why they're darn cheap.

..As I said, when you can buy a DVD version of a certain movie for $6-$10, paying $20+ for a Blu-ray version is simply unjustifiably expensive. ...

One is HD. One is not. Hence the price difference.

You really don't understand this at this point?

Or are you just complaining for the sake of complaining about bluray?

When the price of BR software (new releases) and hardware is comparable (perhaps slightly higher may be acceptable) to legacy DVD , the "general public" will not be embracing the technology as quickly as anticipated by Sony and the 'Sony-Cronies'.

I'm one of those people that says legacy DVD is "good enough". Until prices are reduced, I can't justify the price vs. performance benefit. IMO... it ain't all that and a bag 'o chips. Additionally, I buy one DVD a year (maybe)... so the hardware price is my main gripe. My second is that some rental establishments charge extra for BRD! So, what is my motivation to go to the Dark Side? :)

It's been stated many times... PS3 is the only thing that kept BRD and Sony afloat.

Blockbuster Online charges the exact same for DVD and Blu-ray rental. I'm sure Netflix is the same way, but I'm not 100% sure.

The main reason (and I do mean MAIN) why Blu-ray has a slow adaptation is that Blu-ray players are still quite pricey when comparing them to DVD players. Sure, there are great deals out there (and that's how I got my player), but you have to look real hard. People just walk into Best Buy or some other electronic store and see the $300 price tag on a Blu-ray player and say "no thank you." Like I said, as much as I like Blu-ray, if the prices of the players remain this way, Blu-ray will fail.

Blockbuster Online charges the exact same for DVD and Blu-ray rental. I'm sure Netflix is the same way, but I'm not 100% sure.


No actually netflix charges more, they have a special blu-ray access fee that scales with the number of dvds out.

Blockbuster has long waits on their blu-rays. So there are two options for watching blu-rays: expensive, and waiting. hehehe

No actually netflix charges more, they have a special blu-ray access fee that scales with the number of dvds out.

Oh I see. Well looks like I won't be switching to Netflix anytime soon. :D


Blockbuster has long waits on their blu-rays. So there are two options for watching blu-rays: expensive, and waiting. hehehe
I have about 30 BD titles in my Queue and only one of them is listed as "long wait." So, I'm happy with Blockbuster...that is, until they go bankrupt.

Blockbuster has long waits on their blu-rays. So there are two options for watching blu-rays: expensive, and waiting. heheheThat's highly dependent on what location services your account. I reliably get new releases on release week. Of the released BDs in my queue, 32 are available, five are short wait, one is long wait, and one is very long wait.

Scott

That's highly dependent on what location services your account. I reliably get new releases on release week. Of the released BDs in my queue, 32 are available, five are short wait, one is long wait, and one is very long wait.

Scott

Good point. Where I live there is a week turnaround on titles and everything that was on my queue was long wait. Netflix ships from the same city and has a two day turnaround, so for me it's a no brainer.

I have about 30 BD titles in my Queue ...
Didn't you state in another thread that you only have time to watch/rent one DVD a month?:confused:

Blu-ray prices overall are very expensive.Well its good that you did not collect DVDs in the early years of its life cycle. LaserDisc and D-VHS D-Theater prices would have given you cardiac arrest.

Didn't you state in another thread that you only have time to watch/rent one DVD a month?:confused:

I said, Queue. There are 30 BDs in my Queue. That doesn't mean I've rented 30 BDs. You need titles in your Queue before BB or Netflix can ship movies out to you. BB Online only ships 2 movies per month to me because that's my plan. If you're a BB Online or Netflix subscriber, you'd know what I mean. If you're not, then this probably sounds like gibberish. From your crazy question, it looks like you're not a subscriber.

Well its good that you did not collect DVDs in the early years of its life cycle. LaserDisc and D-VHS D-Theater prices would have given you cardiac arrest.

Sometimes even VHS was expensive. I remember as a kid walking into Suncoast Video with around $30, was alot of money for me back then. And I was set on buying Star Wars. And then I was told by the clerk there it cost like $100!?!?:mad: so not wanting to leave without a scifi movie, I blind bought 2001, which was at a bargain price of $20 (and people complain when a brand new blu-ray costs about that price).:p To this day I hate Suncoast Videos and their inflated prices, but maybe there was something nasty about home video prices those days.

When the price of BR software (new releases) and hardware is comparable (perhaps slightly higher may be acceptable) to legacy DVD , the "general public" will not be embracing the technology as quickly as anticipated by Sony and the 'Sony-Cronies'.

It's been stated many times... PS3 is the only thing that kept BRD and Sony afloat.

I didn't know Sony was the ONLY company that created Blu-ray. Do you have any references to back up what you're saying??

I know what a queue is... my wife subs to Netflix. I know how it works. Next?

Sony isn't the only BR manufacturer, but is the major beneficiary of rights and licencing of the technology, no matter the manufacturer of hardware/software and their professional symbiotic relationship(s).

You can look up references quite easily.

There have been many predictions made on this issue and earlier this year Futuresource predicted (http://www.videobusiness.com/article/CA6633623.html) that the physical media market would remain flat until 2012.

Thanks to Kosty we know that physical media continues to decline. Last year it was down a few percent and this year so far it is down again compared to last the previous year...
http://i39.tinypic.com/dgmadk.jpg

Wow, Blu-ray is extremely low and it only slightly increasing. Yeah, Blu-ray is doomed. It's a shame too. Such a nice format. I just bought "I, Robot" the other day and was so stunned at the picture quality. It's got to be the best looking BD I've watched. You have not seen true HD until you've seen that BD.

One is HD. One is not. Hence the price difference.

You really don't understand this at this point?

Or are you just complaining for the sake of complaining about bluray?

No, it seems that you don't understand at this point..considering today we are getting a lot content in HD over cable and other sources pretty much for free (no price premium), the Blu-ray's price hype is nothing more but a rip off for the studios and BDA. And I don't have to like it personally nor will I cheer with others in support to this. I don't feeel that we should all just suck it up so they can make more money. I don't have problems over some minor price premium but at this point it's still quite expensive.

Or you don't seem to get that? We live in a technology age and paying prices from 1990s is not normal.

No, it seems that you don't understand at this point..considering today we are getting a lot content in HD over cable and other sources pretty much for free (no price premium),

Really? Can you show me which service provider charges $0 extra for HD? Because EVERYONE that I see charges more. Comcast...DirecTV, DISH, etc. Please...show me the provider that gives you HD for "pretty much free". Show me the provider that gives away HD with "no price premium". OTA obviously doesn't count.

the Blu-ray's price hype is nothing more but a rip off for the studios and BDA. And I don't have to like it personally nor will I cheer with others in support to this. I don't feeel that we should all just suck it up so they can make more money. I don't have problems over some minor price premium but at this point it's still quite expensive. Blurays are priced the same as DVD/VHS was. Why? Because the same studios are the ones releasing each iteration of media. Therefore they set the prices to whatever they want. In fact, I would say that largely they have dropped sooner in price, as expressed by many comments above. Mainly due to the economy. I haven't paid over $20 for a bluray in months. Most come in at $15. Do you even read the bargains thread? Or do you just throw a blind eye to that so you can keep complaining. Hell, The digibook Matrix which has the special packaging, booklet, etc. is $13.99 at Amazon right now. Please tell me why I should be up in arms about such pricing.:confused:

All of this complaining, and yet you admitted to having 120 blurays. :confused: Looks like you have been the studios sucker over and over again. Practice what you (are trying) to preach, or else is comes off sounding really hollow.

Or you don't seem to get that? We live in a technology age and paying prices from 1990s is not normal What you don't seem to get is that new technology, like bluray, is meant to reset the price point that the previous technology has lost. It is the basis of the entire CE industry. Old stuff drops its price point, new stuff comes out to reset the pricepoint.

I really have to explain this? Like, really?

Really? Can you show me which service provider charges $0 extra for HD? Because EVERYONE that I see charges more. Comcast...DirecTV, DISH, etc. Please...show me the provider that gives you HD for "pretty much free". Show me the provider that gives away HD with "no price premium". OTA obviously doesn't count.

Just yesterday another one joins the fray. And why doesn't OTA count? A huge percentage of people are getting HD channels over the air at no cost whatsoever. You are excluding it just because it doesn't sync up with your theory that we MUST pay HD.

Mediacom recently began providing its customers with what it calls an unprecedented boost in the number of channels added to the line-up and available at no added service cost, according to the communications company.

“It is exciting to be able to do this for our customers,” said Mediacom Director of Operations for Central Illinois Gary Wightman. “This is the most channel changes we have had in the past few years. We have had phone and Internet upgrades and now this channel upgrade.
“With the delivery of 15 popular cable channels in high-definition (HD) transmission, Mediacom more than doubles the number of HD channels automatically available to Family Cable customers,” said Wightman.

http://www.pontiacdailyleader.com/news/x1885877396/Mediacom-offers-high-definition-boost


And I already had this discussion with you and you went on how somehow cable companies are charging you through equipment or some nonsense like this, where even if you look at it like that (which doesn't make sense because new cable boxes offer more functionality than just HD playback for a few dollars more and you keep getting more and more HD channels for free after that), what expense are we paying for Blu-ray then? We pay for new players, for new TVs and new discs. Get the picture?

Scratching old prices to introduce new prices that are hyped up on account of something new is completely unjustified in this day of age and boggles the mind that you've been drilled to be fine with that. Technology advances are there to give us better technology for the same price we pay today. That's what has happened with every other technology (example is new laptops and other things that have more features and speed, better displays then they had before but price point is pretty much always kept in check) and is actually happening with HD too. Blu-ray didn't invent HD in our homes it's merely an extension of something that's been on the market for years now.

In general, real life is different and some premium could be justifiable but to an extent. It should be minor not like with Blu-ray, especially if we need to buy new hardware still to get a finalized format so we know that's it. What you buy you now you'll be able to use all features without worry of something new coming out in 6 months that your player wouldn't support.

I already mentioned if a DVD upscaling player is $50, Blu-ray player shouldn't be more then $75-$100 and if a DVD is $10, Blu-ray shouldn't be more then $12-$13. 10-20% premium is acceptable due to time and some additional costs in authoring or hardware but most of this hardware relies on existing manufacturing/chips anyways and being already 3 years into existence in this day of age the premium should be quite small ESPECIALLY if you are trying to replace the standard on a mainstream level. If anything they should be offering it at the same price point as DVD in order to make it appealing to everyone.

There's absolutely zero reasons it should be a price hike except for the fact that studios and BDA/CEs revenues are shrinking and they are trying to use exactly your type of reasoning to overprice. If you can't offer something that will be easy and inexpensive to produce and want it to be mainstream accepted then by the laws of free market, you will fail and it's just nature of things. I mean do I really have to explain this to you. Like, really?

I'm not seeing a price hike. If anything, I'm paying a lot less for my Blu-ray movies than what I used to pay for DVD in 2000-2002.

I'm not seeing a price hike. If anything, I'm paying a lot less for my Blu-ray movies than what I used to pay for DVD in 2000-2002.

They are still up there price wise in my neck of the woods. But one thing that really po's me about BD is still the sketchy quality of the picture. Sure the sound is improved, but in some cases I cannot tell the difference between a BD or DVD played on my machine. It looks to me that the studios are just doing a DVD transfer to a BD disc and selling it as something that it is not.

Just my .02

Mike

Just yesterday another one joins the fray.

http://www.pontiacdailyleader.com/news/x1885877396/Mediacom-offers-high-definition-boost Really? You link to a free digital converter box which merely provides "...all local commercial and public broadcast stations and the most popular cable channels that provide news, sports, movies and film programming."

"The free digital tuner box and other accessories are available to customers with older televisions or non-digital service from Medicom." This box appears to be for people that have basic cable. And all they are doing is giving them a free box thats tunes in OTA channels.

Show me which service provider is giving away TBS HD, TNT HD, etc. at "no premium", like you said.

Not PBS.:rolleyes:

And why doesn't OTA count? A huge percentage of people are getting HD channels over the air at no cost whatsoever. You are excluding it just because it doesn't sync up with your theory that we MUST pay HD.

OTA HD doesn't count because it is merely an extension of old free OTA SD channels. They were ALWAYS free - regardless of resolution. OTA was there when VHS came out. OTA was there when DVD came out. Free then, as it is now. You could have made the same argument for paying for SD channels or DVDs when SD OTA was standard that you can now with paying for HD cable channels or blurays. It is a neutral argument.

People have always been able to enjoy content free over the air. Obviously it has improved as technology has improved.

You were never forced to pay, besides the equipment. Yet somehow, cable and satellite and DVD etc. all grew to be multi billion dollar industries, in light of free TV always being provided.

And I already had this discussion with you and you went on how somehow cable companies are charging you through equipment or some nonsense like this, where even if you look at it like that (which doesn't make sense because new cable boxes offer more functionality than just HD playback for a few dollars more and you keep getting more and more HD channels for free after that), what expense are we paying for Blu-ray then? We pay for new players, for new TVs and new discs. Get the picture? Yes, I get the picture. HD costs more than SD. This is proven by HD cable prices, HD satellite prices, iTunes prices, PSN prices, xboxlive prices, and formerly even HD DVD prices:eek:.:rolleyes:

Scratching old prices to introduce new prices that are hyped up on account of something new is completely unjustified in this day of age and boggles the mind that you've been drilled to be fine with that. Then talk to the CE industry as a whole. They have been doing it, literally, for DECADES. This has nothing to do with bluray whatsoever.

Technology advances are there to give us better technology for the same price we pay today. That's what has happened with every other technology (example is new laptops and other things that have more features and speed, better displays then they had before but price point is pretty much always kept in check) and is actually happening with HD too. Blu-ray didn't invent HD in our homes it's merely an extension of something that's been on the market for years now.And? You just proved my point that the CE industry resets the price point every so often to maintain the level of profits they want to maintain.

You do remember that DVD used to be just as expensive right? This pattern is not new or exclusive to bluray, no matter how much you want it to be.

In general, real life is different and some premium could be justifiable but to an extent. It should be minor not like with Blu-ray, especially if we need to buy new hardware still to get a finalized format so we know that's it. What you buy you now you'll be able to use all features without worry of something new coming out in 6 months that your player wouldn't support.

I already mentioned if a DVD upscaling player is $50, Blu-ray player shouldn't be more then $75-$100 and if a DVD is $10, Blu-ray shouldn't be more then $12-$13. 10-20% premium is acceptable due to time and some additional costs in authoring or hardware but most of this hardware relies on existing manufacturing/chips anyways and being already 3 years into existence in this day of age the premium should be quite small ESPECIALLY if you are trying to replace the standard on a mainstream level. If anything they should be offering it at the same price point as DVD in order to make it appealing to everyone.

There's absolutely zero reasons it should be a price hike except for the fact that studios and BDA/CEs revenues are shrinking and they are trying to use exactly your type of reasoning to overprice. If you can't offer something that will be easy and inexpensive to produce and want it to be mainstream accepted then by the laws of free market, you will fail and it's just nature of things. I mean do I really have to explain this to you. Like, really?

And yet you still have been suckered into buying 120 blurays.:confused:

HD content, regardless of provider, is charged at a premium to SD. It's just the way it is.

I really do not see what point you are trying to make, other than YOU think bluray is too expensive, and spouting some arbitrary numbers of what YOU think it should be priced at.

Why don't you do yourself a favor and look how long it took DVD to overcome VHS as the standard, then maybe your unrealistic analysis and interpretation of the market will be grounded a bit more in reality, instead of bitterness and spite.;)

Look at historical trends of the price points of VHS/DVD in the evolution of their life cycle. I think you will see a similar pattern with bluray, which goes to prove that your entire rant is pretty much baseless, since, as has been proven over and over in the CE world, the new product unseats the old product and resets the price point, lasts for a bit until the next new product comes along and repeats the cycle.

NONE OF THIS IS UNIQUE TO BLURAY.

Bozster,

What movie are you looking for that so cheap on DVD but so rediculously expensive on Blu-ray? Pick a movie! Any movie.

Look at historical trends of the price points of VHS/DVD in the evolution of their life cycle. I think you will see a similar pattern with bluray, which goes to prove that your entire rant is pretty much baseless, since, as has been proven over and over in the CE world, the new product unseats the old product and resets the price point, lasts for a bit until the next new product comes along and repeats the cycle.

NONE OF THIS IS UNIQUE TO BLURAY.

You are comparing apples to oranges here.

VHS was a revolutionary product. It displaced nothing. DVD was a revolutionary product. It displaced VHS.

BD on the other hand is an evolutionary product. It offers better PQ and AQ then DVD does. Since when have the masses been interested in not only better PQ and AQ, but the best PQ and AQ? Any historical data to back that premise up?

Really? You link to a free digital converter box which merely provides "...all local commercial and public broadcast stations and the most popular cable channels that provide news, sports, movies and film programming."

"The free digital tuner box and other accessories are available to customers with older televisions or non-digital service from Medicom." This box appears to be for people that have basic cable. And all they are doing is giving them a free box thats tunes in OTA channels.

Show me which service provider is giving away TBS HD, TNT HD, etc. at "no premium", like you said.

Not PBS.:rolleyes:

OTA HD doesn't count because it is merely an extension of old free OTA SD channels. They were ALWAYS free - regardless of resolution.

1. You get HD channels for FREE. What part of it you don't understand? You can't claim one thing (that we need to pay for HD and then make exemptions when it doesn't go with your theory. All of this is free.

2. OF COURSE, OTA HD does count because you are the one claiming that HD should cost money. Since they are giving it away for free, it's another choice of HD content. Otherwise they would have to charge money for HD channels or at least charge more advertising money for HD channel, and I simply don't believe they do.

As for PBS or something you want to watch but can't because you are not getting in HD. Well I'm sorry to break it to you but Blu-ray doesn't have all content. So what's your point? The thing here is that you pay for service either way. PBS or PBS HD won't cost you differently. HD is included if you pay for PBS to be included as part of the package.

You have to buy A SERVICE through cable company. You have to get a digital box from them. If you want to get PREMIUM channels (for their content - not resolution) you need to pay more to the cable company. HD channels ARE INCLUDED in the same service at no additional cost.

Again, I have Cox, I have their full channel line up and all premium channels. I only paid the HDMI box once and I'm paying a few bucks more for it because it offers more FEATURES to me. Every single month I get more HD channels for FREE. I don't pay any additional stuff for my service, I don't pay to HBO more money, I don't pay CINEMAX more money, yet I get more and more HD content.

So let me repeat it for you. We get HD content through cable and service based models with no charge.

If you wanted to make a parallel it would be like saying, we should buy a Blu-ray player but get Blu-ray discs for the same price of DVDs. And it's not even that because with cable boxes you actaully get better functionality and pay very small premium. That would be the same. But no, for Blu-ray experience we have to pay 3 times/things in order to experience it.

There is NO EXCUSE for Blu-ray to cost as much as it does now 3 years into it's existence especially since Blu-ray, as Lee Stewart says, didn't invent anything new. It just increased resolution and nothing else and it's not even doing that properly.

And I wasn't "suckered" into buying 120+ Blu-rays. I was actually supporting the format and wanted it to succeed so I did pay the ridiculous prices in hopes it would allow them to lower prices but more and more, especially after this "new players needed for managed copy and who knows what else" thing, prices that seemingly won't go down for movies is more and more feeling like a rip off than anything else and I've simply stopped buying movies unless it's something I must have and even then I'll think twice and double check the quality of encode before I shell out $25-$30 for it and in some cases it will go over $30. I'm simply more willing to now pay rental price every time I want to see it then giving them money.

If more people actually stopped justifying their greed, we might actually force them to lower the prices and finally start actually taking consumers seriously by providing great encodes for every single title, fix all problems and give us plenty of content options and even going beyond Blu-ray to online streaming, VOD and digital downloads. Right now they are screwing with everyone, not improving anything and constantly keep overcharging things to raise their bottom line. Tech world is evolving and they can't live in 2000 thinking the same thing will work. If they can't adjust and bring great and more diverse things to the market they should fail.

But you, along quite a few others, have this masochistic tendency or theory it seems that we have to pay more for something just because (whether it's "Oh DVD was this much in 2000" or "Well HD costs money").

Bozster,

What movie are you looking for that so cheap on DVD but so rediculously expensive on Blu-ray? Pick a movie! Any movie.

Plenty of them. I just don't really have time to spend time listing it and posting a comparison. I'll do that maybe later if I have time since Monday is starting and I have a lot of work.


But I'll give you the first one that comes to mind. Firefly series I've waited for A LONG time to get on Blu-ray. The difference between DVD and Blu-ray version was quite a bit. it was below $40 and on Blu-ray it was almost $70. Now.. it has dropped it's $30 on DVD and $50+ on Blu-ray. Same thing happens now with Battlestar Gallactica. DVD version for the complete series is $250 I think and Blu-ray version is $350. Also I just looked up real quick Matrix as a popular title:

The Matrix - [Widescreen AC3 Dolby Special] - DVD $6.99 - - BB
The Matrix - [Widescreen AC3 Anniversary Dolby] - Blu-ray Disc $29.99 - BB
The Matrix Blu-ray with book - Amazon $14

Btw, you can get all 4 movies (including the 3d animation one) 4-Film Favorites for $9.99, the Ultimate Matrix collection is $75 on BD. Even if you take Ultimate Matrix collection on DVD it's $32.

I'll give you a lot more examples. It's actually the other way around. You are able to find MUCH less titles that are actually close in price between DVD and Blu-ray (with possible 10-20% premium as it should be for just increased PQ/AQ). Not twice the price.

You are comparing apples to oranges here.

VHS was a revolutionary product. It displaced nothing. DVD was a revolutionary product. It displaced VHS.

BD on the other hand is an evolutionary product. It offers better PQ and AQ then DVD does. Since when have the masses been interested in not only better PQ and AQ, but the best PQ and AQ? Any historical data to back that premise up?

And HDTV is merely an "evolution" of SDTV. But it is still a new product.

Whether people seek better or best is not the issue....the issue is they are seeking, and thus buying NEW. And new costs more than old, regardless if it is a revolution or an evolution.

1. You get HD channels for FREE. What part of it you don't understand? You can't claim one thing (that we need to pay for HD and then make exemptions when it doesn't go with your theory. All of this is free.

2. OF COURSE, OTA HD does count ...

TW Cable in my area offers HD for free (its in all their ads). There a bunch of channels that they offer for free that I can NOT get OTA unless I mount a giant amplified antennae on my roof...and even that might not work. A couple stations are from close to 50 miles away.

1. You get HD channels for FREE. What part of it you don't understand? You can't claim one thing (that we need to pay for HD and then make exemptions when it doesn't go with your theory. All of this is free. Local and publicly subsidized hannels have been free over the air for decades. But people still pay EXTRA for DirecTV, etc. And DirecTV most certainly does NOT give away HD for free - I know - I have it. You have to buy the HD plan. Which costs MONEY, which means it is not FREE, and comes at a PREMIUM. What part of that don't you understand?

2. OF COURSE, OTA HD does count because you are the one claiming that HD should cost money. Since they are giving it away for free, it's another choice of HD content. Otherwise they would have to charge money for HD channels or at least charge more advertising money for HD channel, and I simply don't believe they do. No **** OTA doesn't charge...it's free like it's always been. Please show me that DISH and DirecTV, etc don't charge for HD...that is what I have been waiting for the whole time.

As for PBS or something you want to watch but can't because you are not getting in HD. Well I'm sorry to break it to you but Blu-ray doesn't have all content. So what's your point? The thing here is that you pay for service either way. PBS or PBS HD won't cost you differently. HD is included if you pay for PBS to be included as part of the package.

You have to buy A SERVICE through cable company. You have to get a digital box from them. If you want to get PREMIUM channels (for their content - not resolution) you need to pay more to the cable company. HD channels ARE INCLUDED in the same service at no additional cost. To get HD channels most people charge about $10 extra/month. It is not free. Also, HD STBs cost more than SD STBs. So you are also paying another HD premium on the box. This is regardless of content. This is purely because it is HD.

DirecTV (http://www.directv.com/DTVAPP/global/contentPageNR.jsp?assetId=3950004&footernavtype=-1):
http://i302.photobucket.com/albums/nn84/bt12483/dtv.jpg

DISH (http://www.dishnetwork.com/packages/programming/default.aspx):
http://i302.photobucket.com/albums/nn84/bt12483/dish.jpg

Again, I have Cox, I have their full channel line up and all premium channels. I only paid the HDMI box once and I'm paying a few bucks more for it because it offers more FEATURES to me. Every single month I get more HD channels for FREE. I don't pay any additional stuff for my service, I don't pay to HBO more money, I don't pay CINEMAX more money, yet I get more and more HD content.

So let me repeat it for you. We get HD content through cable and service based models with no charge. I don't know about Cox, but as shown above DirecTV and DISH both charge $10 for HD access. Comcast is similar I believe. So HD is not free from them. And even if your Cox Cable has HD for "free"....you have to know the cost is built into the pricing already.

If you wanted to make a parallel it would be like saying, we should buy a Blu-ray player but get Blu-ray discs for the same price of DVDs. And it's not even that because with cable boxes you actaully get better functionality and pay very small premium. That would be the same. But no, for Blu-ray experience we have to pay 3 times/things in order to experience it.

There is NO EXCUSE for Blu-ray to cost as much as it does now 3 years into it's existence especially since Blu-ray, as Lee Stewart says, didn't invent anything new. It just increased resolution and nothing else and it's not even doing that properly.

And I wasn't "suckered" into buying 120+ Blu-rays. I was actually supporting the format and wanted it to succeed so I did pay the ridiculous prices in hopes it would allow them to lower prices but more and more, especially after this "new players needed for managed copy and who knows what else" thing, prices that seemingly won't go down for movies is more and more feeling like a rip off than anything else and I've simply stopped buying movies unless it's something I must have and even then I'll think twice and double check the quality of encode before I shell out $25-$30 for it and in some cases it will go over $30. I'm simply more willing to now pay rental price every time I want to see it then giving them money.

If more people actually stopped justifying their greed, we might actually force them to lower the prices and finally start actually taking consumers seriously by providing great encodes for every single title, fix all problems and give us plenty of content options and even going beyond Blu-ray to online streaming, VOD and digital downloads. Right now they are screwing with everyone, not improving anything and constantly keep overcharging things to raise their bottom line. Tech world is evolving and they can't live in 2000 thinking the same thing will work. If they can't adjust and bring great and more diverse things to the market they should fail.

But you, along quite a few others, have this masochistic tendency or theory it seems that we have to pay more for something just because (whether it's "Oh DVD was this much in 2000" or "Well HD costs money").

I am not even going to respond to all of this. It is clear, and well known, that you are bitter HD DVD lost. HD DVD movies cost the same or more as bluray when it was alive. Where was your outcry then? Your laundry list of complaints is dripping with left over bitterness, and my responding to each and every one is futile. You litter EngadgetHD with the same list of complaints every time they post a bluray article.

No one is forcing you to buy anything.

And no one is justifying the studios greed. Everyone knows that they are greedy. This is not new to bluray.

The simple fact is bluray is much cheaper now than it was 3 years ago. Both players and movies. It will go down in price more and more just as every technology before it has.

DVDs were also expensive 3 years after inception. They were not always $15. And for most content providers, HD is an extra cost. This is fact. You think Vudu doesn't charge extra for HD? Speaking of Vudu...you have one, right?
I can live with renting and Vudu.

Why aren't you complaining about why their HD/HDX films COST MORE than their SD films?

WHY DOES VUDU CHARGE MORE FOR HD (http://formatwarcentral.com/2008/10/02/vudus-new-hdx-content-ready-to-clog-the-tubes/) BOZSTER?? Hmmm???? Where is your laundry lists of complaints over Vudu charging more for HD?

http://i302.photobucket.com/albums/nn84/bt12483/vudu.jpg

Where is your uproar over Vudu??? You bought their box right? Why isn't HD free??????

You are comparing apples to oranges here.

VHS was a revolutionary product. It displaced nothing. DVD was a revolutionary product. It displaced VHS.

BD on the other hand is an evolutionary product. It offers better PQ and AQ then DVD does. Since when have the masses been interested in not only better PQ and AQ, but the best PQ and AQ? Any historical data to back that premise up?

Lee you know some people here will never accept that logic as true as it is.

I know many that are still quite content with their SD TV's even though they have seen HD PQ many, many times.

They see my set up and say yes that is a nice picture and then go home never feeling the need to get that experience in their own living room and that is what BD is up against.

It is no different than music, having a real nice playback system means very little to the average person. So whether it's the ears or the eyes, some will always want the best while most others will be satisfied with the status quo.

The main reason (and I do mean MAIN) why Blu-ray has a slow adaptation is that Blu-ray players are still quite pricey when comparing them to DVD players. Sure, there are great deals out there (and that's how I got my player), but you have to look real hard. People just walk into Best Buy or some other electronic store and see the $300 price tag on a Blu-ray player and say "no thank you." Like I said, as much as I like Blu-ray, if the prices of the players remain this way, Blu-ray will fail.

Actually, if one were to walk into a BestBuy this week, they'd find that store's in-house brand (Insignia - aka Magnavox) 2.0 BD player for $169.99. For $250, they can get the current Samsung model that's 2.0 ready & has the Netflix movie streaming tech built in.

At the rate I have seen players get discounted, I can see entry-mid level BD players regularly hitting the $150 price point as XMAS 2009 inches closer. Probably a few $100 player deals during the holidays, too.

And HDTV is merely an "evolution" of SDTV. But it is still a new product.

Whether people seek better or best is not the issue....the issue is they are seeking, and thus buying NEW. And new costs more than old, regardless if it is a revolution or an evolution.

But that doesn't address your statement:

as has been proven over and over in the CE world, the new product unseats the old product and resets the price point, lasts for a bit until the next new product comes along and repeats the cycle.

You are claiming that BD will unseat DVD.

But that doesn't address your statement:

You are claiming that BD will unseat DVD.
No I am not, because I was talking about the price point - since half of this thread has been about people saying bluray is too expensive.

Bluray replaced DVDs old pricepoint - intentionally. That's what it was designed to do. Just like this year's new TV model resets the price point back to the level they want it to be.

But even still, if the thread is to be believed, bluray will unseat DVD...in ~2012.

Actually, if one were to walk into a BestBuy this week, they'd find that store's in-house brand (Insignia - aka Magnavox) 2.0 BD player for $169.99. For $250, they can get the current Samsung model that's 2.0 ready & has the Netflix movie streaming tech built in.

That's still too much money for most people. Majority of people are not going to buy a Blu-ray player until they are at least $100 or less.

No I am not, because I was talking about the price point - since half of this thread has been about people saying bluray is too expensive.

Bluray replaced DVDs old pricepoint - intentionally. That's what it was designed to do. Just like this year's new TV model resets the price point back to the level they want it to be.

But even still, if the thread is to be believed, bluray will unseat DVD...in ~2012.

Price points . . .

We talking MSRP or Street Price?

Price points . . .

We talking MSRP or Street Price?

I don't care really - it doesn't matter much.

My point is nice and simple - both HD DVD and bluray were introduced to reignite both player and media prices for optical media.

And therefore anyone expecting them to be sold for DVD level prices at this point are not being very realistic.

I recall VHS sell-through pricing being significantly higher when the format was released and titles first became available. I recall titles being $80+ if you wanted to purchase.

DVD changed the market, partially by the pricing structure. It became a true collectors format. I also vividly recall building a large DVD catalog in a short time due to some incredible deals being available. Granted, the release of DVD also coincided with the .com boon, where many sites were offering some amazing deals as a way to build a customer base.

The short version of what I am saying is that I don't recall DVD having any pricing pressure (on the software side). The hardware was fairly expensive for a time if you wanted a quality player. The first player that I recall that really busted out as a great quality for a low price was the RP-82.

That's still too much money for most people. Majority of people are not going to buy a Blu-ray player until they are at least $100 or less.

Agreed, but Blu-Ray hardware pricing has been dropping very quickly since it was introduced in the summer of 2006.

Q4 09 we should see many big retailers offering $99 BD players (BF sales, etc).

Q4 10 I think we will see those same BF deals in the $49 range.

2011-2012 is when we will most likely see a number of generic players in the $50 and below territory (ie normal pricing) with a number of name brand CE's selling players in the $99 and slightly under price range.

I think that is when you see more and more of the mainstream consumer (J6P, etc) buying in. At that point, it will be more of an impulse buy than anything else. It will just be a natural evolution. Have an HDTV and you need a new DVD player? Just buy a BD player and also have the ability to enjoy both DVD's upscaled as well as true hidef movies (BD) on your HDTV.

Agreed, but Blu-Ray hardware pricing has been dropping very quickly since it was introduced in the summer of 2006.

Q4 09 we should see many big retailers offering $99 BD players (BF sales, etc).

Q4 10 I think we will see those same BF deals in the $49 range.

2011-2012 is when we will most likely see a number of generic players in the $50 and below territory (ie normal pricing) with a number of name brand CE's selling players in the $99 and slightly under price range.

I think that is when you see more and more of the mainstream consumer (J6P, etc) buying in. At that point, it will be more of an impulse buy than anything else. It will just be a natural evolution. Have an HDTV and you need a new DVD player? Just buy a BD player and also have the ability to enjoy both DVD's upscaled as well as true hidef movies (BD) on your HDTV.
Well I hope what you're saying will happen. I'll cross my fingers.

Well I hope what you're saying will happen. I'll cross my fingers.

I hope it does too. I have no reason to believe that it won't. It is Q2 09 and we have already seen $99-130 priced BD players at select retailers so far this year. I think Q4 will be very telling.

Last Q4 I picked up a Samsung BD1500 from Amazon that came with "The Ultimate Matrix Trilogy" on BD. I sold the trilogy on Ebay within a few days of recieving my copy from Amazon and my out the door cost on the 1500 was $140.xx. I suspect the deals will be even better this holiday season.

The economy will definitely affect BD hardware and software sales as well. So if the economy shows improvement, I think we could also see an increase in Blu-Ray adoption.

$199 is barrier for consumers, but the $99 and $49 barriers are even more important when it comes to impulse buys. When I drop $200+ , me and my wife usually have a discussion about it. But $49? I can usually get away with sneaking it into the house, and if she catches me, I can just tell her it was under $50 and she will not bother me.... :)

I think that is when you see more and more of the mainstream consumer (J6P, etc) buying in. At that point, it will be more of an impulse buy than anything else. It will just be a natural evolution. Have an HDTV and you need a new DVD player? Just buy a BD player and also have the ability to enjoy both DVD's upscaled as well as true hidef movies (BD) on your HDTV.

That is my belief aswell. I think software pricing is a much bigger issue then any hardware pricing.

My latest BD player cost me just 139$ including 25% VAT. Not a very big deal to spend.

That is my belief aswell. I think software pricing is a much bigger issue then any hardware pricing.

My latest BD player cost me just 139$ including 25% VAT. Not a very big deal to spend.

No doubt regarding software. I don't see Blu-Ray hitting 50%+ marketshare (as a whole, I think some individual titles even with current pricing could hit 50% within 12-18 months) when the DVD costs $15 for a new release and the Blu-Ray typically costs $24-29 at most B&M stores. While I am willing to pay more money for the BD vs the DVD, even I have a hard time paying more than $5 for the BD version.


Hopefully as the BD ownerbase grows studios and retailers will price BD accordingly. And I believe that means they may need 2 skus. The barebones BD for $19 and under and the collectors edition for $24 or more.

But I think we are at least several years away from the studios and retailers to even consider this. It is not a race to the bottom for software pricing, and it certainly was not on DVD either. Especially when you factor for inflation.

I can see the studios making this happen. Easy way to increase Blu-ray percentage to DVD is stagger the release dates for the same title (release Blu-ray a few weeks earlier than DVD) or Blu-ray only release for a new movie. I'm not sure a Blu-ray only release makes much sense from a financial standpoint though.

I believe the industry has a planned obsolencence for DVD at some point.

I hope it does too. I have no reason to believe that it won't. It is Q2 09 and we have already seen $99-130 priced BD players at select retailers so far this year. I think Q4 will be very telling.

Last Q4 I picked up a Samsung BD1500 from Amazon that came with "The Ultimate Matrix Trilogy" on BD. I sold the trilogy on Ebay within a few days of recieving my copy from Amazon and my out the door cost on the 1500 was $140.xx. I suspect the deals will be even better this holiday season.

The economy will definitely affect BD hardware and software sales as well. So if the economy shows improvement, I think we could also see an increase in Blu-Ray adoption.

$199 is barrier for consumers, but the $99 and $49 barriers are even more important when it comes to impulse buys. When I drop $200+ , me and my wife usually have a discussion about it. But $49? I can usually get away with sneaking it into the house, and if she catches me, I can just tell her it was under $50 and she will not bother me.... :)

Perfect description of the wife acceptance factor WAF price point factor.

Some retailers have described to me as the " price where the wife won't beat the heck out of me for bringing it home price"

But a lot of CEA research has found that its tough for US husbands at over $200 for a purchase, and they need coordination or some sort of approval there. At $149-$199 most US husbands think they can get away with it for a single one time long term purchase and below $99 almost every guy thinks can get away with it and feels comfortable with any electronic purchase if they alone think its a good value or deal. At that point they may not buy it but the WAF dies out for most. Under $79 you have to be either broke PW or a wimp. AT $49 or less you can just explain it by bringing home less beer and pretzels from your shopping trip for yourself.

:D:D:D

Local and publicly subsidized hannels have been free over the air for decades. But people still pay EXTRA for DirecTV, etc. And DirecTV most certainly does NOT give away HD for free - I know - I have it.


Maybe you should change the provider. Most other places and cable give it for free if you get their full digital package. DirectTV sucks anyways. I wouldn't touch it with a pole personally. But hey, as I said, if you dislike them charging for it, you can go with someone else. Fortunately you do have a choice. With Blu-ray we don't, they all stick together like flies on ... well you know the end of it ;)


I am not even going to respond to all of this. It is clear, and well known, that you are bitter HD DVD lost.


Oh please. Get it through you head that not everyone who criticizes Blu-ray is a bitter HD DVD fanboy. Seriously. You are sounding like a drilled Blu-ray fan who only can argue flaws and problems with Blu-ray by pointing fingers HD DVD way. Understand that for Blu-ray's problems/issues/pricing you can't blame HD DVD anymore. It's gonna be 2 years in a few month since HD DVD is out and most people have already forgotten about it.

And known to who? I am absolutely not bitter or have any emotions invested in formats either way. Maybe you are but I look at it as simply technology and I won't be ripped off and support things in defense of corporations. I'm defending myself and my wallet and so should you instead of going with some conspiracy theories. And even if Blu-ray collapsed and disappeared tomorrow, guess what? It wouldn't be the end of the world, some new technology would replace it.



You think Vudu doesn't charge extra for HD? Speaking of Vudu...you have one, right?

Why aren't you complaining about why their HD/HDX films COST MORE than their SD films?

Where is your uproar over Vudu??? You bought their box right? Why isn't HD free??????

First, don't get your panties in a bunch. :)

Vudu can justifiably cost more for 2 reasons, though I never claimed I'm happy with it either - I just said that I understand. They don't own the content so the price is influence by the studios and second VUDU is an online service, so the bandwith alone will cost them more money. This is not like optical media and replication of the same discs. You can clearly see they charge same for HD and HDX which is comparable to 720p vs 1080p. It's not necessarily them who set the price for it.

Again, Blockbuster and Netflix charge more for Blu-ray. Why? There's absolutely zero reason for them to do so but they do. Oh, right, that's because studios sell them Blu-rays at higher price not because it costs them more to deliver HD content.

One comes down to actually infrastructure and the costs of delivering HD where it's actually justifiable to pay a bit more for rental. Since I can spend $5 to watch a movie on a weekend (and I can watch it about 5-6 times before I even get to the point that I paid the disc for). It's not at all the same as with Blu-ray.

Software pricing especially on the retail side can change literally over night, but there is enough concern or not quite fear fear of creating a lower than required expected software price point earlier than needed that will reduce margins. Software pricing is marketing driven not cost driven for software.

The Goldilocks point is to have consumer expectations for new releases at just higher than DVD to improve margins but have that as the consumer valued price and set sale prices to move volumes. No on wants to reduce Blu-ray prices to DVD expectations at this point in its life cycle.

Also no dramatic need to reduce prices on either new releases or catalog titles until the hardware household penetration moves up except as a method also to sell hardware or to keep up with the Jones.

Maybe you should change the provider. Most other places and cable give it for free if you get their full digital package. DirectTV sucks anyways. I wouldn't touch it with a pole personally. But hey, as I said, if you dislike them charging for it, you can go with someone else. Fortunately you do have a choice. With Blu-ray we don't, they all stick together like flies on ... well you know the end of it ;)

Well, if you have to order one of their premier packages (ie full digitial packages) they are not exactly giving it (HD) for free, are they?

I am a Dish customer and have been for about 2.5 years and have to pay extra for HD. Prior to that I was a Cox customer for 1 year and had to pay extra for HD. And prior to that I was a Comcast customer and had to pay extra for HD.

Using Comcast's site if you go with the most basic digital cable plan at $29.99 they charge you $7.99 per month for an HD receiver. If you want an HD DVR, they charge you an extra $13.99 a month.

One way or the other you are probably paying for it, even if the provider hides the fees.

I really cannot complain too much about paying extra for HD. It is far superior to SD and worth every penny to me.

But I am also not the type of person who drops more than $25 on any Blu-Ray new release (not talking about boxsets). I typically wait for a sale or the price to drop. I have about 200 BD movies and I would say the average price paid is around $12-18 for the vast majority of them. I occasionally drop $24-27 on a BD release but I also find titles (both new and used) for 7-10 all time.

IMHO, the BD is almost always worth the extra price, but I also acknowledge the fact that I am an early adopter. Clearly many people will not make the switch to Blu-Ray until the prices drop closer to DVD levels. I believe it will happen, but it will take time.

Buy 'em it you really want 'em.

It will take many years for BR to become mainstream for J6P. There are still folks hanging on to their VHS decks. Retailers just stopped (a year or two ago) stocking VHS. DVD had been trying to compete since it's intoduction.

If it took almost 10 years for DVD to usurp VHS (with a dramatic audio/video improvement)... how will BRD accomplish the same in 3 years (with a minimal/comparable upgrade expense)?

Maybe you should change the provider. Most other places and cable give it for free if you get their full digital package. DirectTV sucks anyways. I wouldn't touch it with a pole personally. But hey, as I said, if you dislike them charging for it, you can go with someone else. Fortunately you do have a choice. With Blu-ray we don't, they all stick together like flies on ... well you know the end of it ;)

In my area - DISH, DTV, Comcast. All charge for HD. And believe me, whether you want to believe it or not, you are paying for HD. The cost is built in. Nothing is free. HD sells for a premium.

Oh please. Get it through you head that not everyone who criticizes Blu-ray is a bitter HD DVD fanboy. Seriously. You are sounding like a drilled Blu-ray fan who only can argue flaws and problems with Blu-ray by pointing fingers HD DVD way. Understand that for Blu-ray's problems/issues/pricing you can't blame HD DVD anymore. It's gonna be 2 years in a few month since HD DVD is out and most people have already forgotten about it. I am not blaming anything. I am just wondering why you don't direct the same arguments you have with bluray to other services....like Vudu, or iTunes, or PSN or xboxlive - ALL of which charge more for HD content.

And known to who? Anyone that has read your posts here and EngadgetHD.

I am absolutely not bitter or have any emotions invested in formats either way. Maybe you are but I look at it as simply technology and I won't be ripped off and support things in defense of corporations. I'm defending myself and my wallet and so should you instead of going with some conspiracy theories. And even if Blu-ray collapsed and disappeared tomorrow, guess what? It wouldn't be the end of the world, some new technology would replace it.

Sure:
God Blu-ray is such a horrible format. This makes me furious. I read in there that you need a NEW PLAYER with ethernet connection (which most of them do have) to read your copy discs. You can make a copy via PC but the license keys that get tied to that copy (register with AACS server) will be a checkpoint for a BD player to play that copy.

I have 3 Blu-ray player now and I'm furious that I will have to buy new players for this, one of the reasons why I supported the other guys (HD DVD) as they had their stuff thought out and implemented to support from start. This is catastrophic really as it's not something like picture in picture extras on a disc. This is pretty much a big deal.

I want to make copies of my discs legally and in full quality and this plainly sucks.

I'm really ticked off right now.

You overexaggerate all the time. And it is always one sided....
That goes for Blu-ray too. Out of 200 Blu-ray movies I have maybe 30% are top notch 1080p.. Other is just above upconverted DVD quality. So you are absolutely right not all 1080p is created equally which might actually prove that some HD downloads due to preparations and clean up can actually look better then some mediocre Blu-ray titles.
:rolleyes:

First, don't get your panties in a bunch. :)

Vudu can justifiably cost more for 2 reasons, though I never claimed I'm happy with it either - I just said that I understand. They don't own the content so the price is influence by the studios and second VUDU is an online service, so the bandwith alone will cost them more money. This is not like optical media and replication of the same discs. You can clearly see they charge same for HD and HDX which is comparable to 720p vs 1080p. It's not necessarily them who set the price for it. Wait. Stop. So you are justifying Vudu costing more, yet have been condemning bluray the entire day for doing exactly the same thing??? Hmmmm....sounds a little hypocritical to me.

Do you know how Vudu works? It is like P2P - they pull bandwidth from everyone to deliver the file. You don't even know the cost comparison of what it costs Vudu versus optical media replication and production. Therefore you can make no quantitative assertion as to why Vudu is somehow allowed to charge more for HD but bluray isn't. Please...show me how it costs Vudu more to distribute HD than it does for bluray (which has to print artwork, etc.).

And I hate to break it to you...but who do you thinks sets the price for bluray discs? That's right...the same studios that set the price for Vudu.:rolleyes:

You can't say it is OK for Vudu to charge more and them slam bluray for it. It makes you appear....biased....

Again, Blockbuster and Netflix charge more for Blu-ray. Why? There's absolutely zero reason for them to do so but they do. Oh, right, that's because studios sell them Blu-rays at higher price not because it costs them more to deliver HD content. Wrong. Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors). Blockbuster does not charge more for bluray if you have their monthly plan.:cool:

And if Vudu can charge more for HD....why can't bluray?????:rolleyes: Oh that's right...somehow Vudu is justified for charging more for HD, but blluray isn't.

Is Apple justified in charging more? How about xboxlive? They justified too?? Let me guess...it is OK for everyone else to charge more for HD...but not bluray, right?

One comes down to actually infrastructure and the costs of delivering HD where it's actually justifiable to pay a bit more for rental. Since I can spend $5 to watch a movie on a weekend (and I can watch it about 5-6 times before I even get to the point that I paid the disc for). It's not at all the same as with Blu-ray. Um...you can rent a bluray for cheaper (or the same) as a $5.99 HDX film from Vudu. You are paying more for less with Vudu. More $$, less quality. But you just go right ahead and keep trying to justify why Vudu is allowed to charge more but bluray isn't.:rolleyes:

There is no rational that you can use that makes it OK for Vudu to charge more for HD but not bluray when you've spent the whole day stating that HD should in essence be free. But now here you are saying it's OK for Vudu to charge more...because of reasons you have pulled out of thin air without any supporting facts.

You can't play both sides there Bozster...if it is bad for bluray to charge more, then it is bad for Vudu to charge more. Yet here you sit making excuses for Vudu...and condemning bluray. Imagine that.

In my area - DISH, DTV, Comcast. All charge for HD. And believe me, whether you want to believe it or not, you are paying for HD. The cost is built in. Nothing is free. HD sells for a premium.



I don't pay for HD through cable. My monthly subscription I had before HD is the same as now. I merely gotten a more modern digital box that offers better features and HDMI and stuff that I didn't get with my old box and I pay more for it and I don't mind for that. It's a few bucks more. Other then that, my content pricing/plans have not changed yet I have quite a bit of HD channels. So no, I'm not paying more. I don't know about you.


I am not blaming anything. I am just wondering why you don't direct the same arguments you have with bluray to other services....like Vudu, or iTunes, or PSN or xboxlive - ALL of which charge more for HD content.


Well this is a place to discuss Blu-ray. I do have critiques about any of those, including DRM, speed of download and playback limitations but I would rather discuss them in proper places. I certainly wouldn't want to own movies now through Vudu or any of the services you mentioned because it's highly risky and limiting if you want to switch to something else. And to be honest, for any of them I never had to replace anything to use them. One time purchase was all that it was needed. Regardless, doesn't make them flawless either.


You overexaggerate all the time. And it is always one sided....


Not really.. The percentage of mediocre encodes is not forgivable. King Arthur, Gangs of New York, Robocop and quite a few others have been downright poor. It's only exaggeration if you are so willing to overlook these issues. I don't want to pay a premium on something and get a subpar product. It's simple as that.

And I don't want to be forced to buy new players for every new feature released that should'be been predicted and implemented as it does in many previous standards. Not a single standard I've seen in the past have had so many revisions within 2 years. It's completely justifyable to be ticked off when you spend $200+ for each player and then you have to buy a new one next year to use new features. It's ridiculous. We are beta testing with our money.

I did like HD DVD more, and you have to realize that someone who prefered HD DVD doesn't necessarily hate Blu-ray. I purchased both at the time equal measure. I prefered HD DVD because I though it was more carefully planned and spec-ed out and was a better format for mainstream because it relied on DVD manufacturing. Since they lost I kept buying Blu-ray even more because i am to one extent an early adopter but early adopter phase needs to end, and not last for 3 years. 3 years in we should've already gotten mainstream prices in this day of age. It's not like DVD where it was a revolutionary technology that was completely replacing (in every aspect) VHS. Certainly back then, we didn't have as many content sources as well, so DVD was totally revolutionary and a 180 flip in technology. Blu-ray, well that certainly isn't.

Wait. Stop. So you are justifying Vudu costing more, yet have been condemning bluray the entire day for doing exactly the same thing??? Hmmmm....sounds a little hypocritical to me.

I'm not justifying anything. Can't you read my previous response? I said that I understand why they charge more because the technology is different. I'm not too happy they charge more but they have different type of expense and they don't own the content. Studio releasing a Blu-ray movie does.


Do you know how Vudu works? It is like P2P - they pull bandwidth from everyone to deliver the file. You don't even know the cost comparison of what it costs Vudu versus optical media replication and production.


True, I don't know the inner workings at how Vudu underlying system looks like but I'm pretty sure it's not bit-torrent type. If you don't mind I'd like to read up where you got information on how Vudu works. IMO they need to be able to throttle speed and increase it beyond 4mb down the road and the reason they don't do that is to not overload their system.

Nobody said Vudu is perfect, but you only need to buy their cheap box and rent movies.


Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors). Blockbuster does not charge more for bluray if you have their monthly plan.:cool:


Nope. You are wrong. Blockbuster also charges premium on Blu-ray titles. I don't have their monthly plan and I do pay more for each Blu-ray I rent. So it is more expensive. Again, you are only taking in consideration things that suit your argument.


You can't play both sides there Bozster...if it is bad for bluray to charge more, then it is bad for Vudu to charge more. Yet here you sit making excuses for Vudu...and condemning bluray. Imagine that.

Again, you only read it the way you want to.

I can see the studios making this happen. Easy way to increase Blu-ray percentage to DVD is stagger the release dates for the same title (release Blu-ray a few weeks earlier than DVD) or Blu-ray only release for a new movie. I'm not sure a Blu-ray only release makes much sense from a financial standpoint though.

I believe the industry has a planned obsolencence for DVD at some point.

Not anytime soon. I have not crunched all the math, but it looks like Blu-ray has to post triple digit growth each week just to offset a 4-5% drop in DVD sales. If staggering a DVD release triples Blu-ray sales and causes a 10-15% drop in DVD sales, the studios lose out (significantly).

That sort of difference in scale is quite significant.

Wrong. Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors).

That is incorrect. Netflix has discussed their concerns around Blu-ray and has even filed SEC documents around the higher costs associated with Blu-ray. This includes acquisition costs and higher failure rates versus DVD.

Netflix has reaped significant gains in growth and has directly cited streaming as the catalyst for that growth.

If you want to discuss this further, I suggest posting in the appropriate sub-forum.

I don't pay for HD through cable. My monthly subscription I had before HD is the same as now. I merely gotten a more modern digital box that offers better features and HDMI and stuff that I didn't get with my old box and I pay more for it and I don't mind for that. It's a few bucks more. Other then that, my content pricing/plans have not changed yet I have quite a bit of HD channels. So no, I'm not paying more. I don't know about you.
:confused::confused:

I don't know about you either. And from the looks of it, you don't know about you, since you can't decide if you are paying more or not. You contradict yourself.

Put it this way...if you had to get a new box that costs more to watch "free" HD...then that HD wasn't so "free" was it?;) Now before you respond...think about it for a few......

I'm not justifying anything. Can't you read my previous response? I said that I understand why they charge more because the technology is different. I'm not too happy they charge more but they have different type of expense and they don't own the content. Studio releasing a Blu-ray movie does. Please tell me what is different from a studio releasing their content via Vudu as opposed to on a disc?:confused: I am really not seeing the major difference besides the obvious - one is on a disc - one is not. But both are merely a way to deliver content. The studio owns the content regardless of what it is released on. There is NO difference in that regard. The studio owns the content if it appears on a DVD, on a bluray, through Vudu or through Hulu. It seems as if you are trying to state that Vudu doesn't own the movies, but bluray does. That is a fallacy, as neither "own" the movie. The studios own the movie regardless of how it is transmitted. So I really fail to see your point. Once again - you do not have a logical reason for why you think it is OK for Vudu to charge more for HD.

True, I don't know the inner workings at how Vudu underlying system looks like .......wait, but above you just said "I understand why they charge more because the technology is different", but here you say you "don't know the inner workings" of their technology. So how can you know it is justified for them to charge more if you don't understand the process in the first place?:confused:

You really think it is cheaper to make discs than stream content? Discs have multiple physical times that need old school manufacturing.....Vudu has none of that. Discs cost more to make than downloads do to provide. Therefore, in reality, it makes 0 sense for Vudu to charge so much for their HD content when they have less overhead than disc manufacturing. It is, in fact, not justified. And the only reason it costs as much as it does is....the studios. And the reason bluray costs what it does is because....the studios.

So, as any logical person can see....it is not Vudu or bluray setting the price...it is the content owners, otherwise known as....the studios!

Nope. You are wrong. Blockbuster also charges premium on Blu-ray titles. I don't have their monthly plan and I do pay more for each Blu-ray I rent. So it is more expensive. Again, you are only taking in consideration things that suit your argument. If you read my response, I clearly mentioned only monthly plans. And for single rentals they cost no more than Vudu HD...and are better quality.

Once again....you seem to have no problem paying for (lesser quality) HD Vudu but yet have issues paying for bluray....why?? Why are you not consistent in your stance??

Why is a $5.99 Vudu HD rental with lossy audio OK, but a $5.99 bluray rental with lossless audio and special features too much??:confused: Your reasons thus far have been subpar and unconvincing to say the least.

That is incorrect. Netflix has discussed their concerns around Blu-ray and has even filed SEC documents around the higher costs associated with Blu-ray. This includes acquisition costs and higher failure rates versus DVD.

Netflix has reaped significant gains in growth and has directly cited streaming as the catalyst for that growth.

If you want to discuss this further, I suggest posting in the appropriate sub-forum.

And they also expect discs to dominate for the better part of the next decade. :confused: And they have also cited bluray as a growth engine...especially when they are collecting more money from bluray subscribers on a monthly basis.

I am aware of the issues surrounding Netflix. As I am aware of your fondness for "streaming" to "any screen".

So how is it Netflix is providing their streaming for "free"?? Because it surely isn't free for them to license and stream that content.

Don't bother....I don't really want to discuss this further. I have seen your other posts on the matter, and would rather avoid another long winded post-a-thon.

And they also expect discs to dominate for the better part of the next decade. :confused: And they have also cited bluray as a growth engine...especially when they are collecting more money from bluray subscribers on a monthly basis.

I am aware of the issues surrounding Netflix. As I am aware of your fondness for "streaming" to "any screen".

So how is it Netflix is providing their streaming for "free"?? Because it surely isn't free for them to license and stream that content.

Don't bother....I don't really want to discuss this further. I have seen your other posts on the matter, and would rather avoid another long winded post-a-thon.

Here is a suggestion. Don't post false information or a rebuttal if you do not want a response. I am sure there are plenty of people who would like to post false information and be able to not have to bother with responses, but fortunately the truth always bears out.

You stated that Netflix was charging more for Blu-ray due to streaming, which is patently false. Netflix has stated clearly why they are charging more for Blu-ray. It is because Blu-ray acquisition costs are higher and because Blu-ray failure rates are higher than DVD.

It really makes no sense for you to state other false information. It sounds like you have already read posts that link to their SEC filings, so you are aware of the financial facts. I do not understand why someone would be intentionally misleading, especially on a subject where the facts are easily presented.

I would be interested to know why you knowingly suggested something that was false.

Here is a suggestion. Don't post false information or a rebuttal if you do not want a response. I am sure there are plenty of people who would like to post false information and be able to not have to bother with responses, but fortunately the truth always bears out.

You stated that Netflix was charging more for Blu-ray due to streaming, which is patently false. Netflix has stated clearly why they are charging more for Blu-ray. It is because Blu-ray acquisition costs are higher and because Blu-ray failure rates are higher than DVD.

It really makes no sense for you to state other false information. It sounds like you have already read posts that link to their SEC filings, so you are aware of the financial facts. I do not understand why someone would be intentionally misleading, especially on a subject where the facts are easily presented.

I would be interested to know why you knowingly suggested something that was false.

It's not false...it's just unproven. Just because they listed two reasons for charging more for bluray doesn't mean there can't be more, does it? An omission of facts is not a lie - it is just an omission.

Can you prove to me that Netflix is not using any money generated form other areas to pay for their streaming service? I mean, where is the money coming for to pay for it if not from other revenue generating areas....what money are they using to pay for the licensing fees? What money are they using to pay for the bandwidth costs? Did they take out a loan? Are they using there DVD monthly subscription fees? Their bluray fees? Or are they just eating all of the cost?

HOW ARE THEY PAYING FOR THE STREAMING COSTS??? Is that in the SEC filing? If not...then it is reasonable for someone to suggest that other areas of their business are paying for the parts that are "free" to the user (but not to Netflix....).

So no, it is not false. It is merely an omission. An unknown. Unless you know exactly how they are funding their streaming venture....your guess is as good as mine. And my guess was bluray. Unless you can categorically show that that is incorrect, it is not patently false. It is merely a possibility. Unless you can show me the paper trail of how they are paying the content acquisition fees and bandwidth fees for their streaming service...then you don't know how they are funding it either. Which means their is a limited number of possibilities....eating the cost, selling stock, taking a loan, or using money generated form other areas. Which may or may not be bluray.

Please, let us know which one of those is factual and which one is not, with definitive proof. Instead of SEC comments that may or may not be all inclusive of the facts.

It's not false...it's just unproven. Just because they listed two reasons for charging more for bluray doesn't mean there can't be more, does it? An omission of facts is not a lie - it is just an omission.

Can you prove to me that Netflix is not using any money generated form other areas to pay for their streaming service? I mean, where is the money coming for to pay for it if not from other revenue generating areas....what money are they using to pay for the licensing fees? What money are they using to pay for the bandwidth costs? Did they take out a loan? Are they using there DVD monthly subscription fees? Their bluray fees? Or are they just eating all of the cost?

HOW ARE THEY PAYING FOR THE STREAMING COSTS??? Is that in the SEC filing? If not...then it is reasonable for someone to suggest that other areas of their business are paying for the parts that are "free" to the user (but not to Netflix....).

So no, it is not false. It is merely an omission. An unknown. Unless you know exactly how they are funding their streaming venture....your guess is as good as mine. And my guess was bluray. Unless you can categorically show that that is incorrect, it is not patently false. It is merely a possibility. Unless you can show me the paper trail of how they are paying the content acquisition fees and bandwidth fees for their streaming service...then you don't know how they are funding it either. Which means their is a limited number of possibilities....eating the cost, selling stock, taking a loan, or using money generated form other areas. Which may or may not be bluray.

Please, let us know which one of those is factual and which one is not, with definitive proof. Instead of SEC comments that may or may not be all inclusive of the facts.

Are you also going to ask me what the definition of "is" is?

Sorry, but your response cannot be taken very seriously.

Streaming is obviously a strategic investment. Netflix has been clear that it is an investment. It is also one that has already reaped gains, and is viewed as a solid strategy for long-term growth and existence. Making investments in future growth areas is such a basic business financial principle that it is laughable to try and use it as a means to justify your false assertion.

The fact is that Netflix is charging more for Blu-ray because it costs them more to acquire and the failure rate is higher than DVD. They have stated this clearly and definitively in legal filings with the SEC.

Are you also going to ask me what the definition of "is" is?

Sorry, but your response cannot be taken very seriously.

Streaming is obviously a strategic investment. Netflix has been clear that it is an investment. It is also one that has already reaped gains, and is viewed as a solid strategy for long-term growth and existence. Making investments in future growth areas is such a basic business financial principle that it is laughable to try and use it as a means to justify your false assertion.

The fact is that Netflix is charging more for Blu-ray because it costs them more to acquire and the failure rate is higher than DVD. They have stated this clearly and definitively in legal filings with the SEC.

So what you are really saying is you cannot, with certainty, tell us how they are funding their streaming service. So, as a result of that, your guess is as good as mine.

Thanks for that bit of info.

My guess is they are at least partly using funds generated by increased bluray fees. You may disagree - but if you cannot prove that they are not using bluray funds...then, as I said, your guess is as good as mine. Feel free to pick your own choice, and know that I also cannot prove your choice wrong - since the only people that know are probably working in the Netflix headquarters. i get it, it is an investment...but what is paying for that investment??? Still waiting for an answer to that one.....

You can only say something is false if you can prove it is false. Innocent until proven guilty and what not. So....where is your absolute proof?

So what you are really saying is you cannot, with certainty, tell us how they are funding their streaming service. So, as a result of that, your guess is as good as mine.

Thanks for that bit of info.

My guess is they are at least partly using funds generated by increased bluray fees. You may disagree - but if you cannot prove that they are not using bluray funds...then, as I said, your guess is as good as mine. Feel free to pick your own choice, and know that I also cannot prove your choice wrong - since the only people that know are probably working in the Netflix headquarters. i get it, it is an investment...but what is paying for that investment??? Still waiting for an answer to that one.....

You can only say something is false if you can prove it is false. Innocent until proven guilty and what not. So....where is your absolute proof?

Nevermind BT... You'll never win with him. He'll just do as he always do and never answer the question directly an keep posting totally irrelevant counterpoint until this thread is locked.

If it is an investment, then they are paying for it. Where is this money coming from? DVD rentals? I'm sure those customer who don't use the streaming service are really proud to know that they pay for something they don't use.

So what you are really saying is you cannot, with certainty, tell us how they are funding their streaming service. So, as a result of that, your guess is as good as mine.

Thanks for that bit of info.

My guess is they are at least partly using funds generated by increased bluray fees. You may disagree - but if you cannot prove that they are not using bluray funds...then, as I said, your guess is as good as mine. Feel free to pick your own choice, and know that I also cannot prove your choice wrong - since the only people that know are probably working in the Netflix headquarters. i get it, it is an investment...but what is paying for that investment??? Still waiting for an answer to that one.....

You can only say something is false if you can prove it is false. Innocent until proven guilty and what not. So....where is your absolute proof?

ROFL! OK.

Netflix has stated definitively why they increased Blu-ray costs in a legal SEC filing. The streaming assertion you made is baseless.

You made it with zero knowledge, information or reasonable justification. And you stated as much in your last post. With zero knowledge, information of reasonable justification to support your assertion, you knowingly pushed a false idea. You are now trying to justify it by asking for proof of the alternate. That is a logical fallacy that may work on school playgrounds, but not among educated people.

It is clear to anyone with even a bit of business knowledge what a strategic investment is, and how it differs from pricing changes (driven by material cost changes) on another offering.

I do encourage you to try and propose more justification based on logical fallacies. I personally find it very amusing.

My guess is that Netflix is at least partly using funds generated by increased blu-ray fees to create a eugenics program to breed a superhuman to rule over as our overlord. You may disagree - but if you cannot prove that they are not using bluray funds...then, as I said, your guess is as good as mine.

ROFL! OK.

Netflix has stated definitively why they increased Blu-ray costs in a legal SEC filing. The streaming assertion you made is baseless.

You made it with zero knowledge, information or reasonable justification. And you stated as much in your last post. With zero knowledge, information of reasonable justification to support your assertion, you knowingly pushed a false idea. You are now trying to justify it by asking for proof of the alternate. That is a logical fallacy that may work on school playgrounds, but not among educated people.

It is clear to anyone with even a bit of business knowledge what a strategic investment is, and how it differs from pricing changes (driven by material cost changes) on another offering.

I do encourage you to try and propose more justification based on logical fallacies. I personally find it very amusing.

ROFL indeed.

How about this, when you prove me wrong, I will prove you right. Deal?

Zero knowledge? No...I have seen their reports, and have seen what generates money and what does not.
Information? Came from the same reports as above.
Reasonable justification? Investments cost money. Money made elsewhere can be used to pay for such investments.

As of now the fact remains you have no idea how they are funding streaming. Bluray - which generates money for Netflix - is therefore one of a limited number of ways to fund their streaming. You can't say that it is not a possibility, because it is.

I am done with this topic - I have offset this thread enough.

Until next time....Any Stream to any Screen! :rolleyes:

My guess is that Netflix is at least partly using funds generated by increased blu-ray fees to create a eugenics program to breed a superhuman to rule over as our overlord. You may disagree - but if you cannot prove that they are not using bluray funds...then, as I said, your guess is as good as mine.

That's just silly.

How is Netflix paying for streaming?

Pick one:
1) loan
2) selling stock
3) DVD revenue
4) bluray revenue
5) eating the cost(s)

Any one of those 5 could be a valid choice. Because those are the ways Netflix generates/acquires money to pay for things....things like, oh, say... investments....

Just because I choose 4 doesn't mean I am wrong, just as 1-3 or 5 could be the answer.

The only fact is...NO ONE KNOWS!! And thus no one, at this point can be wrong. And none of the above choices can be false. Because the information is not known.

ROFL indeed.

How about this, when you prove me wrong, I will prove you right. Deal?

Zero knowledge? No...I have seen their reports, and have seen what generates money and what does not.
Information? Came from the same reports as above.
Reasonable justification? Investments cost money. Money made elsewhere can be used to pay for such investments.

As of now the fact remains you have no idea how they are funding streaming. Bluray - which generates money for Netflix - is therefore one of a limited number of ways to fund their streaming. You can't say that it is not a possibility, because it is.

I am done with this topic - I have offset this thread enough.

Until next time....Any Stream to any Screen! :rolleyes:

Thank you for that. It is eerily close to the Chewbacca defense! I assert that Blu-ray only exists because Sony developed part of technology so that each player emits energy which causes viewers to behave irrationally and illogically. Prove me wrong. :rolleyes:


But just for fun.... you stated:

I have seen their reports, and have seen what generates money and what does not.

Can you please point out in their financial reports how much revenue DVD is generating and how much revenue streaming is generating.

My guess is that Netflix is at least partly using funds generated by increased blu-ray fees to create a eugenics program to breed a superhuman to rule over as our overlord. You may disagree - but if you cannot prove that they are not using bluray funds...then, as I said, your guess is as good as mine.

ROFL! Exactly!!

Logical fallacy at work!


Netflix stated clearly why they are charging more for Blu-ray. Anything else is wild, baseless and uninformed speculation.

And to think.. all he had to do was say "You are right.. I have no justification or information to back-up that assertion. I retract it".

That's just silly.

How is Netflix paying for streaming?

Pick one:
1) loan
2) selling stock
3) DVD revenue
4) bluray revenue
5) eating the cost(s)

Any one of those 5 could be a valid choice. Because those are the ways Netflix generates/acquires money to pay for things....things like, oh, say... investments....

Just because I choose 4 doesn't mean I am wrong, just as 1-3 or 5 could be the answer.

The only fact is...NO ONE KNOWS!! And thus no one, at this point can be wrong. And none of the above choices can be false. Because the information is not known.

Ahh... but if no one knows (despite Netflix definitively stating why Blu-ray prices were increased), then that list is FAR too short!

Let's see... it could be that:

6) Netflix is secretly using their DVD by mail business as a front for a marijuana home delivery service

7) Netflix has mastered alchemy and is turning DVDs into solid gold!

8) Netflix has the DVD version of the "All-Spark" that turns any inanimate object into a DVD of the latest blockbuster

Prove me wrong.... :p


EDIT: This place is going to be alot more fun if "no one can be wrong" without someone being able to prove a negative. ;-)

Ahh... but if no one knows (despite Netflix definitively stating why Blu-ray prices were increased), then that list is FAR too short!

Let's see... it could be that:

6) Netflix is secretly using their DVD by mail business as a front for a marijuana home delivery service

7) Netflix has mastered alchemy and is turning DVDs into solid gold!

8) Netflix has the DVD version of the "All-Spark" that turns any inanimate object into a DVD of the latest blockbuster

Prove me wrong.... :p


EDIT: This place is going to be alot more fun if "no one can be wrong" without someone being able to prove a negative. ;-)

Yeah, but in the real world, where I live (instead of where you live) my five choices are the only logical, valid choices that can pay for streaming. No superhuman research, no alchemy. You can laugh all you want and call it a logical fallacy - but the simple fact is there are only a limited number of ways Netflix is paying for streaming.

1) loan
2) selling stock
3) DVD revenue
4) bluray revenue
5) eating the cost(s)

Since no one knows how they are paying for it, ALL are valid.

If Netflix is to expand the titles on its Internet service, it will have to considerably boost its licensing spending, from roughly $100 million last year, according to a person familiar with the matter.

"Netflix has yet to show that it has the resources and profitability to be in the markets where licensing is the business policy," says Warren Lieberfarb, the former head of Time Warner's Warner Bros. home video division, who helped develop the DVD format.
http://online.wsj.com/article/SB124570665631638633.html

Warren Lieberfarb....ever heard of him?

For about the third of fourth time now, Mr PSound, expert on streaming, HOW IS NETFLIX PAYING FOR STREAMING? $100M is a lot of money. Where did it come from????:confused:

I really am done this time. You do not have the facts just like I don't. But yet I am wrong and you are right.:rolleyes:

But before I go....Any stream to any screen!!!!!!!

This has been fun, but let's get back to the discussion.

Here is the original assertion.
Wrong. Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors).

The idea that Netflix charges more for Blu-ray "mostly" to fund their streaming endeavors is ludicrous and has zero basis in any fact. Netflix has stated why they charge more for Blu-ray. The idea that Blu-ray has a higher acquisition cost (duh), and has a higher failure rate that DVD (today) are very reasonable and even somewhat expected at this point in the Blu-ray lifecycle.

I hope most reasonable people can see that the Blu-ray price increase has everything to do with Blu-ray. The fact is that the investments that Netflix will be making in streaming (as it continues to drive their growth) are likely going to far outpace the extra revenue they see from Blu-ray (and which revenue has already been earmarked to cover the extra Blu-ray costs). Fortunately both Blu-ray and streaming are growing markets, and the increase in subscribers to both will allow for the Blu-ray surcharge to be removed as pricing comes down, and for streaming to be a value-add to provide competitive differentation.

HOW IS NETFLIX PAYING FOR STREAMING?

The same way they pay for acquiring and shipping DVDs. From subscriber revenue.

But that has nothing to do with your baseless assertion that the Blu-ray price increase is "mostly" to pay for streaming. The reasons for the Blu-ray price increase were stated clearly and definitively by Netflix. Namely, higher acquisition costs and higher failure rate (over DVD).

Like the consumers will even decide. Once Blu-Ray players hit $50 and under consumers will simply buy them as they play DVDs (upscaled) as well as Blu-Ray's.

Optical media has a long life ahead and at some point, the studios, CE's, and retailers will simply push Blu-Ray and DVD will take second stage in stores.

We saw the exact same thing with the transition from VHS to DVD. With Blu-Ray it is a much easier transition as the players will play DVD discs as well.

IMO, consumer awareness of BD is nearing the level where "everyone" wants one...even though many know nothing other than it is "better" and do not necessarily know that an HDTV is necessary to see a big improvement. So it is really just price that is keeping DVD players alive. As someone else said, it is only up to CE manufacturers (including Sony for licensing fees) to decide BR players should be priced to replace standard players. Customer awareness and desire are there and ready for plucking.

fafner

Who cares whether Blu-ray will be a success or not or whether they're pricey? If you like it and can afford it, then buy it. That's what I'm doing. If you don't like it and think it's a waste, don't buy it. They way technology moves today, everything you buy will become obsolete by the time you know it. You buy what you want. Simple as that. Heck, maybe in a year or two, they will start making cars that can drive on air, like in "Back To The Future II." Does that mean you shouldn't buy a new car right now then? You want a new car, then buy it and quit worrying about its future.

IMO, consumer awareness of BD is nearing the level where "everyone" wants one...even though many know nothing other than it is "better" and do not necessarily know that an HDTV is necessary to see a big improvement. So it is really just price that is keeping DVD players alive. As someone else said, it is only up to CE manufacturers (including Sony for licensing fees) to decide BR players should be priced to replace standard players. Customer awareness and desire are there and ready for plucking.

fafner

If "everyone" wants one why doesn't "everyone" buy one? Sales of BD SAL players have not been impressive at all. Need new player sales to advance the format to the next level.

If "everyone" wants one why doesn't "everyone" buy one?
If DVD and Blu-ray players were the exact same price, which one do you think people will buy? It's cost that preventing people from getting one.

I'm not saying "everyone" wants one, but most people do but refuse to buy it unless prices go down.

If "everyone" wants one why doesn't "everyone" buy one? Sales of BD SAL players have not been impressive at all. Need new player sales to advance the format to the next level.

Everyone wants a mansion and a Porsche too. My point was that CE makers control whether everyone buys a SAL BR Player by setting the price.

fafner

If "everyone" wants one why doesn't "everyone" buy one? Sales of BD SAL players have not been impressive at all. Need new player sales to advance the format to the next level.

It will be interesting to see your take on 2Q Blu-ray player sales when that information is released. :)

Netflix implies that they pay full first class postage for optical disc mailings. They did not state their actual cost. If anyone is interested the disc and mailer weigh 1 oz. You can easily check commercial, large volume mailers at USPS site and see that you can mail both ways for a fraction of their implied postage.


Now who believes Netflix pays anywhere near Amazon rates for a BD title?
The Blu-ray fee is also rising because high-definition discs can cost as much as 30 percent more than standard DVDs, Netflix said. At Amazon.com, the largest Internet retailer, Warner Bros.’ “Dark Knight” sells for $23.99 on Blu-ray, 37 percent more than the $17.49 asking price for the conventional format.


As for BD having more damage and cost than DVD, Netflix says:
"The amount of damage to Blu-ray Discs is insignificantly small compared with our total ships," Swasey said.They state elsewhere the BD damage rate is, “a fraction of a percent of their total ships.”

I will be so glad when Netflix starts charging for their streaming service so we can put an end to all this bickering and BS (and because I am a Netflix stockholder ;))

It seems about time this thread should be locked. It is the same http://forum.blu-ray.com/images/smilies/imported/catfight.gif

Everyone wants a mansion and a Porsche too. My point was that CE makers control whether everyone buys a SAL BR Player by setting the price.

fafner

These are the same CEM's that manufacturer and sell UP DVD players. ;)

ROFL! OK.

Netflix has stated definitively why they increased Blu-ray costs in a legal SEC filing. The streaming assertion you made is baseless.

You made it with zero knowledge, information or reasonable justification. And you stated as much in your last post. With zero knowledge, information of reasonable justification to support your assertion, you knowingly pushed a false idea. You are now trying to justify it by asking for proof of the alternate. That is a logical fallacy that may work on school playgrounds, but not among educated people.

It is clear to anyone with even a bit of business knowledge what a strategic investment is, and how it differs from pricing changes (driven by material cost changes) on another offering.

I do encourage you to try and propose more justification based on logical fallacies. I personally find it very amusing.

Actually the reason Netflix charges extra for Blu-ray is because Aliens from the Andromeda galaxy communicating via an 8th dimension secretly told them to do so.

Lucky for me I can say this because...
You can only say something is false if you can prove it is false. Innocent until proven guilty and what not.
And who here is going to prove that false???:D

If "everyone" wants one why doesn't "everyone" buy one? Sales of BD SAL players have not been impressive at all. Need new player sales to advance the format to the next level.

The problem TODAY is that not everyone wants one. Even if they were given one for free. Why? Some don't have HDTVs, some don't want to pay extra for discs, some have found other outlets for watching movies besides discs, etc.

The video market is fragmenting more and more every day.

The same way they pay for acquiring and shipping DVDs. From subscriber revenue. Of which could (and likely does) include bluray subscriber revenue. Thanks for proving my point.

But that has nothing to do with your baseless assertion that the Blu-ray price increase is "mostly" to pay for streaming. The reasons for the Blu-ray price increase were stated clearly and definitively by Netflix. Namely, higher acquisition costs and higher failure rate (over DVD).
Um, it has everything to do with my comment. Since my comment said, in most general terms, that they were using money generated from bluray to pay for streaming.

And you just agreed with me above - since you say they are using their subscriber revenue (which includes bluray subscribers) to pay for streaming.

If you want to argue over the word "mostly", argue with yourself.

Glad to see we are now in agreement - (bluray) subscriber revenue is likely paying (in part at least) for streaming.

That wasn't so hard, was it?

The problem TODAY is that not everyone wants one. Even if they were given one for free. Why? Some don't have HDTVs, some don't want to pay extra for discs, some have found other outlets for watching movies besides discs, etc.

The video market is fragmenting more and more every day.

And *Gulp* . . .

Some have no interest in HD. Less than 1/2 of HDTV owners are watching HD. All they wanted was the form factor. ;)

Of which could (and likely does) include bluray subscriber revenue. Thanks for proving my point.


Um, it has everything to do with my comment. Since my comment said, in most general terms, that they were using money generated from bluray to pay for streaming.

And you just agreed with me above - since you say they are using their subscriber revenue (which includes bluray subscribers) to pay for streaming.

If you want to argue over the word "mostly", argue with yourself.

Glad to see we are now in agreement - (bluray) subscriber revenue is likely paying (in part at least) for streaming.

That wasn't so hard, was it?

We all know what you posted, and what you were trying to assert. You stated the increase in Blu-ray pricing was mostly due to streaming. That is unfounded, unsupported by fact and false. Your attempts to justify that false position are laughable and pathetic. Netflix has stated why they are charging more for Blu-ray. It has everything to do with Blu-ray, namely the increased acquisition costs and higher failure rate.

The fact that you are still trying to argue that point is ridiculous. It certainly does not support you. You have basically advertised that you will not look at facts and concede a point, but you would rather you use playground logical fallacies and any hope of justification rather than reason.

We all know what you posted, and what you were trying to assert. You stated the increase in Blu-ray pricing was mostly due to streaming. That is unfounded, unsupported by fact and false. Your attempts to justify that false position are laughable and pathetic. Netflix has stated why they are charging more for Blu-ray. It has everything to do with Blu-ray, namely the increased acquisition costs and higher failure rate.

The fact that you are still trying to argue that point is ridiculous. It certainly does not support you. You have basically advertised that you will not look at facts and concede a point, but you would rather you use playground logical fallacies and any hope of justification rather than reason.

Are you really doing this on purpose, spinning what other say?

He said the physical media subscription (for which BR is a part for which you pay a premium) is subsidizing the streaming services. You even said so in your reply above:

Originally Posted by PSound
The same way they pay for acquiring and shipping DVDs. From subscriber revenue

Either you are doing this intentionnaly and maliciously or you have one heck of a reading problem.

Now i'll type real slow so you'll understand: If they are using subscriber money to finance their "investment" in streaming then they are using the money they get from BR rentals. Is that clear enought.

Now don't try to spin this around or cut and paste one of your out of context snippet that only make sense to you.

...(bluray) subscriber revenue is likely paying (in part at least) for streaming....


Why would that be? Because they feel streaming is a better business model and they want to convert users from BD to streaming?

That would make sense. They could eliminate all the shipping issues they have, and we know that they are getting BD players to support streaming video, and maybe this is why.

So your point is that Netflix is subsidizing streaming now so that it will later become the primary source of revenue and they can move away from shipping and disc rentals. I am not sure if I agree, but it sounds like a valid point.

Why would that be? Because they feel streaming is a better business model and they want to convert users from BD to streaming?

That would make sense. They could eliminate all the shipping issues they have, and we know that they are getting BD players to support streaming video, and maybe this is why.

So your point is that Netflix is subsidizing streaming now so that it will later become the primary source of revenue and they can move away from shipping and disc rentals. I am not sure if I agree, but it sounds like a valid point.

But not all people subscribing to netflix use the streaming service. And quite a few that use it, do it because it's free. If they kill off the physical side of their business they may find themself short of money in the end.

Also, I don't think you can conclude that because somebody buy a netflix enabled player that automatically they will use it for streaming. Maybe that was the only model available/affordable/on sale at the moment and the buyer doesn't even have high speed internet.

Actually the reason Netflix charges extra for Blu-ray is because Aliens from the Andromeda galaxy communicating via an 8th dimension secretly told them to do so.

Lucky for me I can say this because...

And who here is going to prove that false???:D

Netflix uses MONEY for investments. Money comes from revenue. Currently Netfilx has two known forms of revenue, DVD and BD subs.

Seems only a few KNOW that Netfilx has NEVER used a penny of their BD generated revenue for anything other than BD since only they know that ALL that revenue has already been earmarked to cover the extra Blu-ray costs.

Now HOW they know this is from your Aliens I guess.

Everyone wants a mansion and a Porsche too. My point was that CE makers control whether everyone buys a SAL BR Player by setting the price.

fafner
I want a mansion. :)

Why would that be? Because they feel streaming is a better business model and they want to convert users from BD to streaming?

That would make sense. They could eliminate all the shipping issues they have, and we know that they are getting BD players to support streaming video, and maybe this is why.

So your point is that Netflix is subsidizing streaming now so that it will later become the primary source of revenue and they can move away from shipping and disc rentals. I am not sure if I agree, but it sounds like a valid point.

I think Netflix would love for people to move towards streaming. This is no secret. But the fact that they have to basically give away the service vs charging you for it tells you something. I don't believe that they have confidence that charging extra for streaming right now would result in a jump in revenue or profit, otherwise they would. The proof is in the pudding. I think they are still trying to figure out the best way to offer the service and determine what the price points are and how to drive demand. At some point though I expect Netflix will have to start charging a few for streaming. The service is not free. They have to pay for the content, the cost of delivery, and the Infrastructure costs. Based on the price points we see from other companies that offer streaming/download (ie Microsoft, Vudu, Sony, Apple) the content owners are going to try and make as much money as they can from streaming/downloads. So I suspect Netflix is paying a decent fee for the content (of course they do not offer new releases).

The CEO of Netflix has been quoted as saying that they do not expect to see optical disc rentals peak for another 5-7 years. And that is just his best guess. It could be longer or shorter depending on consumers jumping to streaming/downloading. I think the peak (5-7 years) sounds about right, and I can see optical hanging on another 5-7 years after that for rentals.

IMHO, this streaming service is being funded from their current subscriber base which includes both DVD and BD subscribers. I am not sure we can directly point to the price hike to BD users as 100% proof that it is helping to fund streaming, but I do think that the demographic that is already watching Blu-Ray or will be in the future, is very closely related to the same demographic that may use the streaming service. The fact that several BD models support Netflix streaming out of the box is evidence of this.

Are you really doing this on purpose, spinning what other say?

He said the physical media subscription (for which BR is a part for which you pay a premium) is subsidizing the streaming services. You even said so in your reply above:


Either you are doing this intentionnaly and maliciously or you have one heck of a reading problem.

Now i'll type real slow so you'll understand: If they are using subscriber money to finance their "investment" in streaming then they are using the money they get from BR rentals. Is that clear enought.

Now don't try to spin this around or cut and paste one of your out of context snippet that only make sense to you.

Netflix offers a service. Depending on your subscriber level you get access to different offerings in the service, including varying access to streaming offerings.

Netflix makes revenue from these services. It uses that revenue to pay for costs related to delivering that service. This is not hard to understand... in fact it is elementary.

Netflix chose to charge extra for Blu-ray and gave clear information on why. The assertion that started this offshoot was that Netflix was charging extra for Blu-ray mostly to pay for streaming. That claim was (and is) unfounded and unsupported by fact or reason.

Now that you have entered this conversation, can you please provide any referenced data or information that supports the assertion that the Blu-ray price premium was put in place to pay for streaming services? If you can, I would love to hear it. If not, then you can concede that the claim that the Blu-ray premium was put into place to pay for streaming is indeed unfounded by any fact (and indeed is directly contrary to statements issued by Netflix).

I think Netflix would love for people to move towards streaming. This is no secret. But the fact that they have to basically give away the service vs charging you for it tells you something. I don't believe that they have confidence that charging extra for streaming right now would result in a jump in revenue or profit, otherwise they would. The proof is in the pudding. I think they are still trying to figure out the best way to offer the service and determine what the price points are and how to drive demand. At some point though I expect Netflix will have to start charging a few for streaming.

The CEO of Netflix has been quoted as saying that they do not expect to see optical disc rentals peak for another 5-7 years. And that is just his best guess. It could be longer or shorter depending on consumers jumping to streaming/downloading. I think the peak (5-7 years) sounds about right, and I can see optical hanging on another 5-7 years after that for rentals.

IMHO, this streaming service is being funded from their current subscriber base which includes both DVD and BD subscribers. I am not sure we can directly point to the price hike to BD users as 100% proof that it is helping to fund streaming, but I do think that the demographic that is already watching Blu-Ray or will be in the future, is very closely related to the same demographic that may use the streaming service. The fact that several BD models support Netflix streaming out of the box is evidence of this.

This is really the wrong area for this conversation, but it seems to be what people want to talk about (and the mods are letting it go), so....

Streaming is obviously a strategic investment for Netflix. They were looking to the future and planning to avoid their own obsolescence. What has been a pleasant surprise to Netflix and to Wall Street is how much of a growth engine it has been for them in the current market. Netflix has cited multiple times how streaming has boosted their subscriber base beyond their expectations. It has lowered churn and removed one of their biggest costs (shipping).

It has proven to be valuable now and has provided them a course for future growth and relevance. Like any smart business they made an investment in their future. They were also very fortunate to have it start paying unexpected dividends very quickly.

Looks like people are again using logical fallacies (I just read a strawman post that looked to change the entire core argument).

Here is the original assertion:

Wrong. Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors).

If anyone has any solid data that supports the claim that Netflix charges more for Blu-ray to fund their streaming services, then please provide it.

My assertion is that Netflix has stated why they charge more for Blu-ray. It has everything to do with Blu-ray, namely higher acquisition costs and a higher failure rate than DVD.

It is that simple folks. And maybe take a deep breath before you respond. Do you really believe and want to take a stand that Blu-ray pricing was increased because of streaming? Are you basing that on any facts or information?

It seems clear cut enough to concede the point that the original assertion cannot be supported by fact or logic, and to move on.

My assertion is that Netflix has stated why they charge more for Blu-ray. It has everything to do with Blu-ray, namely higher acquisition costs and a higher failure rate than DVD.

Not true. Netflix raised their BD rental prices because they only keep a small supply of them and more people are starting to rent then. In order for supply and demand to be equal (or be close to equal), they raised their prices.

I think Netflix would love for people to move towards streaming. This is no secret. But the fact that they have to basically give away the service vs charging you for it tells you something.

Here's the thing though. It tells us they are investing heavily (to the point of losing money) to create infrastructure to lose BD or DVDs in the long run.

So it's not free. You pay at least $8 a month for the membership to use Netflix. The reason they lose money is because they can't use all of those $8 or even more to cover their streaming infrastructure but for discs and their primary business first.

The reality though, sometime in the future, when they are ready, they will kill off disc based renting and use 100% of the subscriptions money for streaming infrastructure making it profitable or at least not at a loss.. Now the question is when this will happen of course, and it might not be next year but I strongly believe they are going that way.

Netflix is certainly not free. It's free in the context that you pay membership to them for discs but they give you streaming to entice you by paying out of their pocket. The long term strategy is pretty clear though.

I have a high opinion of Netflix management. These guys have been ahead of curve since the very beginning to the point where they completely decimated Blockbuster as a total newcomer only by looking ahead to new business models. They offered renting by mail, now they are transcending and going online distribution. It's only logical by just looking at the way they do business.

As for Netflix using Blu-ray for paying their streaming infrastructure, I disagree. It is highly unlikely if we just look at it by common sense that Blu-ray is paying anything for them. If anything they seem to be losing money on Blu-ray and barely breaking even to the tune of increasing Blu-ray subscriptions due to reasons posted by PSound. If they are in need to increase Blu-ray due to higher postage costs and bad discs I don't see how they can generate any money to cover anything from that except Blu-ray itself.

It is most likely they are covering their streaming from either additional money from investors or from DVD business.

Netflix offers a service. Depending on your subscriber level you get access to different offerings in the service, including varying access to streaming offerings.

Netflix makes revenue from these services. It uses that revenue to pay for costs related to delivering that service. This is not hard to understand... in fact it is elementary.

Netflix chose to charge extra for Blu-ray and gave clear information on why. The assertion that started this offshoot was that Netflix was charging extra for Blu-ray mostly to pay for streaming. That claim was (and is) unfounded and unsupported by fact or reason.

Now that you have entered this conversation, can you please provide any referenced data or information that supports the assertion that the Blu-ray price premium was put in place to pay for streaming services? If you can, I would love to hear it. If not, then you can concede that the claim that the Blu-ray premium was put into place to pay for streaming is indeed unfounded by any fact (and indeed is directly contrary to statements issued by Netflix).

Let's try it again, i'll type even slower this time.

If they are using subscriber money to finance their "investment" in streaming then they are using the money they get from BR rentals. Is that clear enought.

The BR surcharge is included in the subscription money people pay to Netflix. Netflix use that money (subscription) to subsidize their streaming service. So yes the surchage, like all the rest of the subscription money, is used to pay for streaming.

Is that clear enough for ya...

Currently Netfilx has two known forms of revenue, DVD and BD subs.

Its a little more complicated than that. They have various plans. As an incentive to pay more for the "unlimited plans", they are offering streaming. To say streaming is free is like saying that when I bought the "comfort package" for my car they gave me heated seats (something I may or may not use) for free. Companies do it all the time to make more money (see McDonalds Happy meals with FREE toys).

Netflix feels that if the bundle in streaming with unlimited plans, they will sell more and also convert some people to pay more than they would with cheaper plans.

Let's try it again, i'll type even slower this time.

That sends clever to you, but really it's not clever at all. Translating a phrase into a completely inappropriate context is kind of silly.

If they are using subscriber money to finance their "investment" in streaming then they are using the money they get from BR rentals. Is that clear enought.

That doesn't directly follow. Especially since (a) bd rentals are so unprofitable that they had to institute a fee just to stop losing money and (b) bd rentals are a very, very small fraction of revenue for netflix. It's like accusing a grocery store of using their profits from selling toothpicks to pay for the new cafe they just put in.

The BR surcharge is included in the subscription money people pay to Netflix.

No it's not. Do you even use netflix? You have to actually agree to the blu-ray fee, it's completely optional. Most people that subscribe to netflix do not pay the blu-ray fee.

Netflix use that money (subscription) to subsidize their streaming service. So yes the surchage, like all the rest of the subscription money, is used to pay for streaming.


I completely agree that it doesn't make sense to label and divide money into blu-ray money, dvd money etc, we have just one thing and that is Netflix's profit. But P Sound has already argued that well. And that still undermines the assertion that blu-ray money funds streaming. The blu-ray fees were created to fund blu-rays, it wasn't a subversive step to make blu-ray users pay for the streaming service.

Do you agree with the paranoid claim that the blu-ray fee was created to fund streaming? From what you've written, I doubt it. I don't think that you've been even reading the posts, because you clearly have misunderstood what's been written.

Let's try it again, i'll type even slower this time.

If they are using subscriber money to finance their "investment" in streaming then they are using the money they get from BR rentals. Is that clear enought.

The BR surcharge is included in the subscription money people pay to Netflix. Netflix use that money (subscription) to subsidize their streaming service. So yes the surchage, like all the rest of the subscription money, is used to pay for streaming.

Is that clear enough for ya...

Many Netflix plans include streaming as an incentive, but not Blu-ray. You can rent 2 BDs a month for $5.99 but you will NOT get access to streaming. The 2 are NOT related.

Now if you say streaming is paid for by the people who sign-up for unlimited plans, and may or may not sign up for BDs too, that would be correct.

As for the BD surcharge, Netflix has made it pretty clear that they need that money to pay for the extra costs of BD discs.

Looks like people are again using logical fallacies (I just read a strawman post that looked to change the entire core argument).

Here is the original assertion:



If anyone has any solid data that supports the claim that Netflix charges more for Blu-ray to fund their streaming services, then please provide it.

My assertion is that Netflix has stated why they charge more for Blu-ray. It has everything to do with Blu-ray, namely higher acquisition costs and a higher failure rate than DVD.

It is that simple folks. And maybe take a deep breath before you respond. Do you really believe and want to take a stand that Blu-ray pricing was increased because of streaming? Are you basing that on any facts or information?

It seems clear cut enough to concede the point that the original assertion cannot be supported by fact or logic, and to move on.

You admitted they use subscriber fees for funding streaming. Bluray brings in extra subscriber fees. So according to your own definition they are using bluray subscriber fees to fund streaming.

You keep relying on the SEC comments that say studios charge more for bluray discs and higher costs due to failure, but I can point to comments that say that disk breakage is insignificant (and therefore does NOT cost them any extra significant amount).
The problem is not pervasive, says Steve Swasey, Netflix’s vice-president of corporate communications. "Our percentage of Blu-ray disks that members receive that are not playable is a fraction of a percent," he says.
http://www.wired.com/gadgetlab/2009/04/cracked-netflix/

So which is more accurate? Are the costs associated with disc breakage high, or a "fraction". Are they costing Netflix significant extra amounts, or only a "fraction"? Is the above VP wrong?

It is not illogical or false to suggest that bluray subscriber fees are paying for streaming, especially since bluray is an extra charge that they were not previously collecting. Especially since it was raised at the same time that they had to start paying $100M+ to the studios for streaming licensed content. And especially since bluray fees recently went from a flat $1 fee to a graded fee based on disc rentals. Lots more $$ from bluray, at the same time they are spending lots more $$ to fund streaming. This is a very logical conclusion. With bluray they have a new revenue generating stream, and with streaming they have a new revenue losing stream. Is it illogical to assume one offsets the other?

Also, in their SEC declaration - they didn't say that DVD revenues are paying for streaming either. Does that mean that absolutely, 100%, they are not using DVD money to pay for streaming? No. That would be an illogical assumption. It is logical to assume Netflix is using their revenue generating areas to fund streaming. But according to you, if they didn't explicitly mention it - then it can't be true.

I say that just because they didn't mention it in their SEC filing doesn't mean it isn't true. Because if that were the case, then streaming is seemingly being funded by invisible funds, since they never mentioned how they were funding it at all. Yet they have to be funding it somehow. It isn't paying for itself....THEY DON'T CHARGE FOR IT.

The fact of the matter is no one here, INCLUDING YOU, can definitively say what is funding streaming. No one here knows how much of the bluray fee is used for higher bluray costs, and how much is fed back into the overall "kitty".

You can bark out what they said in their SEC statement all day. I am sure there is truth to the higher bluray costs. No doubt. But you cannot categorically eliminate that bluray fees are also being used to pay for streaming, in any amount (10%, 50%, 90%....). You simply do not have the data, and neither do I. Therefore, you simply cannot say my assumption is false. Because they is a very real and likely chance that it is true. But no one can prove it either way, so no one can be wrong, and no one can be right. So, stop telling me I am false in my assumption, because you simply, cannot factually prove I am false. SEC comments that may or may not disclose all details are not sufficient in categorically eliminating possible funding from bluray revenue. After all - they are paying for streaming somehow, and they never did mention how. Be it DVD subscribers, bluray subscribers, etc. So how they do it is anyone's guess, and no one can be wrong. Which also means that you, yes YOU, cannot be all-knowingly right. The data simply is not there.

Just because you think your premise is more well founded, doesn't mean mine is wrong. It is just founded on different rationale. Different does not mean false. Different means different.

And no one can prove otherwise. We can all only assume.

Do you agree with the paranoid claim that the blu-ray fee was created to fund streaming? From what you've written, I doubt it.

No i'm saying that the physical media, including BR rentals (and its surchage) is paying for the streaming service as a whole. So, since the surcharge for BR is included it does go toward paying for streaming. I never said the surcharge is the only way they pay for it but it does contribute to it.

I don't think that you've been even reading the posts, because you clearly have misunderstood what's been written.

This is funny coming from a guy defending PSound who is the master in not understanding what is written.

Many Netflix plans include streaming as an incentive, but not Blu-ray. You can rent 2 BDs a month for $5.99 but you will NOT get access to streaming. The 2 are NOT related.

Now if you say streaming is paid for by the people who sign-up for unlimited plans, and may or may not sign up for BDs too, that would be correct.

As for the BD surcharge, Netflix has made it pretty clear that they need that money to pay for the extra costs of BD discs.

They don't need to be related. Netflix has to finance the streaming service somehow and that somehow is with the whole of their revenue making services aka the physical media. So the DVD and BR services as a whole are subsidizing the streaming.

So even if you don't have a streaming enabled account and are not even remotly interested in it, you are still paying for it. Of course you don't mind since Netflix doesn't charge that much for their excellent disk rental services.

No i'm saying that the physical media, including BR rentals (and its surchage) is paying for the streaming service as a whole. So, since the surcharge for BR is included it does go toward paying for streaming. I never said the surcharge is the only way they pay for it but it does contribute to it.

Again...
Many Netflix plans include streaming as an incentive, but not Blu-ray. You can rent 2 BDs a month for $5.99 but you will NOT get access to streaming. The 2 are NOT related.

Streaming is paid for by people who pay for the unlimited plans. Those people may or may not sign up for Blu-ray...many are paying extra for unlimited plans and are NOT paying the Blu-ray surcharge. Netflix has stated that the surcharge is for extra BD costs.

The problem is Netflix did 2 things. They added the BD surcharge and they started leting CE makes offer streaming as a feature of their BD players. These 2 things freaked the BD faithful out.

Again...


Streaming is paid for by people who pay for the unlimited plans.
Not entirely true:
Limited Plan
$4.99 a month
1 DVD out at-a-time
(Limit 2 per month)
plus
Instantly watch up to 2 hours of movies (some new releases) & TV episodes (including current season) online on your PC or Mac for no additional fee.

http://www.netflix.com/HowItWorks

Those people may or may not sign up for Blu-ray...many are paying extra for unlimited plans and are NOT paying the Blu-ray surcharge. Netflix has stated that the surcharge is for extra BD costs.

The problem is Netflix did 2 things. They added the BD surcharge and they started leting CE makes offer streaming as a feature of their BD players. These 2 things freaked the BD faithful out. Most people would get freaked out when a service they use suddenly increases their price, up to 4x+ what it used to be.

And I would think most "BD faithful" enjoy Netflix streaming on their players.

I know the next bluray player I buy will have that feature. I currently use the streaming service in addition to normal discs.

This week so far I have watched Valkyrie on bluray and Dexter Season 1 via streaming. No freaks out either.

They charge more to rent a BRD.

How/why they use/charge the additional fee is their perogative. If you want to get the detail as to how NetFlix allocates revenue from subscription fees, contact NetFlix or an auditor or the SEC. Or... file a class action lawsuit if everyone thinks it's illegal.

Everyone has an opinion, but no one has the definitive answer. Personally, why should anyone care?

Not entirely true:

http://www.netflix.com/HowItWorks

From YOUR link...

Can I instantly watch movies streamed from Netflix over the Internet to my TV?

Yes you can, if you are on an unlimited plan. The ability to instantly watch movies (some new releases) & TV episodes (including current season) streamed from Netflix over the Internet to your TV via a Netflix ready device is included with all unlimited plans.

Either way, it is NOT related to BD and the BD surcharge. The ability to "instantly watch movies streamed from Netflix over the Internet to my TV" is there to get people to to switch to unlimited plans. It does NOT say you will get this service if you pay the BD surcharge.

And I would think most "BD faithful" enjoy Netflix streaming on their players.

I agree 100%, but I bet they will not admit it here! :D

From YOUR link... Yeah, my link say that people with LIMITED plans get to watch 2 hours of Instant Watch streaming. Did you not see that? It is not only applied to unlimited subscribers. What don't you get?:confused:
Limited Plan
$4.99 a month
1 DVD out at-a-time
(Limit 2 per month)
plus
Instantly watch up to 2 hours of movies (some new releases) & TV episodes (including current season) online on your PC or Mac for no additional fee.

http://www.netflix.com/HowItWorks

Therefore, people with a LIMITED plan can indeed use the streaming feature. You do not need an unlimited plan.:confused: Could this be any more clear??

Either way, it is NOT related to BD and the BD surcharge. The ability to "instantly watch movies streamed from Netflix over the Internet to my TV" is there to get people to to switch to unlimited plans. It does NOT say you will get this service if you pay the BD surcharge.

1) Regarding bluray, you do not know that for fact. Bluray has introduced a new revenue stream via the surcharge. Their DVD plans have maintained the same pricing. How else are they paying for a $100M+ revenue losing operation like streaming without raising any of their DVD subscription prices? Only bluray was raised. Remember....before streaming was available bluray was FREE with your Netflix subscription. Then when streaming came out bluray cost $1 extra not long after. Now bluray costs a tiered amount depending on the amount of discs in your plan. Why was bluray free before streaming, and then only got a surcharge AFTER streaming was available? Quite a coincidence...

2) From the same link above, people without unlimited plans, or in other words people with LIMITED plans, still get to use Instant Watch streaming, but only for 2 hours. So your theory isn't quite valid. If they are happy with their limited plan and 2 hours of streaming - then they have no reason to switch to an unlimited plan.

Streaming is not only available to unlimited subscribers. LIMITED subscribers can watch 2 hours/month.

They charge more to rent a BRD.

How/why they use/charge the additional fee is their perogative. If you want to get the detail as to how NetFlix allocates revenue from subscription fees, contact NetFlix or an auditor or the SEC. Or... file a class action lawsuit if everyone thinks it's illegal.

Everyone has an opinion, but no one has the definitive answer. Personally, why should anyone care?

Because some people think their opinion is the definitive answer.....

How will either of you (or anyone) get a definitive answer?

Both bowls of Cheerios are wet ... and it's not milk. Agree to disagree and be done. ;)

Streaming is not only available to unlimited subscribers. LIMITED subscribers can watch 2 hours/month.

If I own a BD/Roku/Netflix player that supports Netflix streaming and am on the $4.99 plan, can I stream to that player/TV? No.

Correct? PCs and Netflix ready players are different.

/way, way-off topic tag

Media markets these days are more and more fragmented it will be very difficult for BD to reach 50%. IMHO, it will be a few years before they can even reach 50% of the physical media market.

If I own a BD/Roku/Netflix player that supports Netflix streaming and am on the $4.99 plan, can I stream to that player/TV? No.

Correct?

What does that matter? That wasn't the original premise.

Here is your original comment:
Streaming is paid for by people who pay for the unlimited plans.

That is not true. People with limited plans get access to 2 hours of Instant Watch streaming, "for free". How is it "for free"? We don't know, since we don't know what funds their streaming service. We do know that bluray prices increased as streaming popularity increased (and therefore content fees and bandwidth fees for streaming GREW and GREW and GREW to over $100M+ last year alone). Likewise, bluray went from being free, to costing $1 extra, to costing up to $4 extra.

As for your new goalpost, it appears that only people with unlimited plans can use Netflix ready devices (and PC and Mac), while people with the limited plan can only use their PC or Mac to stream Instant Watch material:
How much do the plans cost?

Unlimited Plans
$8.99 a month
1 DVD out at-a-time
(Exchange DVDs as often as you want)
plus
Instantly watch online on your PC or Mac or instantly on your TV via a Netflix ready device - all for no additional monthly fee. Instantly watch as often as you want, anytime you want.

$12.99 a month
2 DVDs out at-a-time
(Exchange DVDs as often as you want)
plus
Instantly watch online on your PC or Mac or instantly on your TV via a Netflix ready device - all for no additional monthly fee. Instantly watch as often as you want, anytime you want.

$16.99 a month
3 DVDs out at-a-time
(Exchange DVDs as often as you want)
plus
Instantly watch online on your PC or Mac or instantly on your TV via a Netflix ready device - all for no additional monthly fee. Instantly watch as often as you want, anytime you want.

Limited Plan
$4.99 a month
1 DVD out at-a-time
(Limit 2 per month)
plus
Instantly watch up to 2 hours of movies (some new releases) & TV episodes (including current season) online on your PC or Mac for no additional fee
http://www.netflix.com/HowItWorks

But either way, no matter the plan, you have some form of access to Instant Watch. So no, it is not only people with unlimited plans paying for Instant Watch streaming.

Your original comment had nothing to do with Netflix Ready devices. You said that ONLY people with unlimited plans were "paying for" streaming. That was not true. I don't know what else to tell you.

And no one knows who is "paying for" the streaming feature anyway. That is what the last 3 pages of this thread have been about. Streaming is "free" (to the user at least...not so much for Netflix....).

If I own a BD/Roku/Netflix player that supports Netflix streaming and am on the $4.99 plan, can I stream to that player/TV? No.

Correct? PCs and Netflix ready players are different.

/way, way-off topic tag

Media markets these days are more and more fragmented it will be very difficult for BD to reach 50%. IMHO, it will be a few years before they can even reach 50% of the physical media market.

Streaming is streaming is streaming, be it on a pc a roku or a BD...
It cost them the same to stream to your PC or to your other device so there isn't realy a difference infrastructure wise or cost wise to netflix.

How will either of you (or anyone) get a definitive answer?

Both bowls of Cheerios are wet ... and it's not milk. Agree to disagree and be done. ;)

I hear you, but I wasn't the one telling other people what they were saying was "patently false".

Kind of hard to tell someone else they are 100% wrong when you don't have all of the facts yourself, no?

Streaming is streaming is streaming, be it on a pc a roku or a BD...
It cost them the same to stream to your PC or to your other device so there isn't realy a difference infrastructure wise or cost wise to netflix.

He had to find some way to try and validate his initial comment....that only people with unlimited plans were "paying for" streaming.

Truth is people with limited plans get 2 hours of streaming, "for free".

So are the people with unlimited plans "paying for" those with limited plans to get their 2 hours of "free" streaming?;)

Yes, just agree to disagree. If you still were unable to convince the other party after 6 pages, then you can conclude that aguing any further is pointless. Each person has an opinion and is sticking to it like Super Glue.

What exactly is so blu about a bluray stream? No real need for a bluray optical device is there?

Blu is damned if they do, damned if they don't here. Get behind streaming and risk eroding weak retail disk sales. Don't get behind it and risk giving a competitor a streaming HD foothold.

Here is the original assertion:

Wrong. Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors).

If anyone has any solid data that supports the claim that Netflix charges more for Blu-ray to fund their streaming services, then please provide it.

...

Do you support the assertion that Netflix raised their prices on Blu-ray rentals mostly to pay for their streaming service?

Streaming is streaming is streaming, be it on a pc a roku or a BD...
It cost them the same to stream to your PC or to your other device so there isn't realy a difference infrastructure wise or cost wise to netflix.

Hey, at least you caught on to the fact that only PCs and Macs are supported. For all Netflix players you need the unlimited plan as I stated.

Here is the original assertion:Wrong. Only NetFlix charges more for bluray in their subscription (mostly to fund their streaming endeavors).



If anyone has any solid data that supports the claim that Netflix charges more for Blu-ray to fund their streaming services, then please provide it.

Would this all be easier if I wrapped a big IMO before my comment?:rolleyes:

Not that it matters much, since no one, even you, knows the truth about how streaming is being funded. So any comment on the matter is merely opinion.

All I know is bluray via Netflix used to be free. Then it cost $1 extra. Now it costs up to $4 extra. At the same time bluray prices increased, streaming became more popular. And with streaming becoming more popular, Netflix saw higher associated costs from streaming, via increased content license fees and bandwidth fees.

Since Netflix does not charge for streaming, the money has to be coming from somewhere. Netflix has not raised the price on their standard DVD plans during this same time frame. They have remained flat.

However, they have seen increased revenue from increased bluray fees. Last year it cost Netflix $100M to run its streaming service "for free". Where did this extra money come from? Only bluray prices were increased. Did they pull $100M from only their DVD revenues? Or was some of it pulled from increased bluray revenues too?

No one can 100% answer that question. But it is clearly a possibility that the extra bluray fees have helped pay for streaming, which is a money losing endeavor at this point (to the tune of $100M and counting).

Get over it - DVD is dead! (and it should be)

So...
Does anyone know where that extra dollar goes? Why should anyone care?

Subscribe or don't subscribe.

My goodness! Everyone's guess is a good as the other's. It won't change a darned thing. Not that it matters. ;)

So, the topic of this thread is supposed to be:
Blu-ray will be 50% of market by 2012

So...
Does anyone know where that extra dollar goes?

Netflix has stated explicitly that the premium price for Blu-ray is due to higher costs associated with Blu-ray.

It is clear. It is simple. There is no conspiracy (although that does not stop some from making some very elaborate theories).

So...
Does anyone know where that extra dollar goes? Why should anyone care?

Subscribe or don't subscribe.

My goodness! Everyone's guess is a good as the other's. It won't change a darned thing. Not that it matters. ;)

So, the topic of this thread is supposed to be:
Blu-ray will be 50% of market by 2012

Good idea - back on topic . . .

That is 3.5 years away. And here is an issue that has not been discussed. That 50%. Is it total revenue? As in sales and rentals or is it sales only? And if sales only - then why?

BD may make 10% at the end of 2009. To go from 10% to 50% in 3 years? Riiiiight. :rolleyes:

Netflix has stated explicitly that the premium price for Blu-ray is due to higher costs associated with Blu-ray.

Then explain why bluray was initially free.:confused:

Why did Netflix charge the least ($0) when bluray was most expensive for them (2006/2007) and the most ($1-4) when bluray is less expensive to them (2008/2009)?

Coincidentally streaming (-$100M) happened during the transition from free bluray to fee bluray.

Then explain why bluray was initially free.:confused:

Why did Netflix charge the least ($0) when bluray was most expensive for them (2006/2007) and the most ($1-4) when bluray is less expensive to them (2008/2009)?

Coincidentally streaming (-$100M) happened during the transition from free bluray to fee bluray.

And explain why Blockbuster is not charging more for their monthly plan?

Then explain why bluray was initially free.:confused:

Why did Netflix charge the least ($0) when bluray was most expensive for them (2006/2007) and the most ($1-4) when bluray is less expensive to them (2008/2009)?

Coincidentally streaming (-$100M) happened during the transition from free bluray to fee bluray.

From their SEC filing 2/25/09:

Studios have begun to release films in high definition format on Blu-ray. This new high definition format DVD has higher damage rates than we currently experience with standard definition DVDs. If we were to see a significant increase in the number of Blu-ray DVDs we ship or an increase in the percentage of Blu-ray DVDs our subscribers take and the damage rates remained higher than standard definition DVDs, our gross margins, profitability and cash flow could be adversely affected.

Blu-ray usage increased. Their costs increased. They decided to charge for it. Simple.

...BD may make 10% at the end of 2009. To go from 10% to 50% in 3 years? Riiiiight. :rolleyes:

Since when have you EVER been able to accurately judge the HDM market?

I roll my eyes at you.:rolleyes: Pretty much everything you said that wouldn't happen (in regards to bluray) has happened.

To say you have failed at accurately predicting pretty much anything would not be an understatement.

I can only imagine what your excuse with be in 2012 if the thread title comes true. Some sort of deflection I would assume.

This is really the wrong area for this conversation, but it seems to be what people want to talk about (and the mods are letting it go), so....

Streaming is obviously a strategic investment for Netflix. They were looking to the future and planning to avoid their own obsolescence. What has been a pleasant surprise to Netflix and to Wall Street is how much of a growth engine it has been for them in the current market. Netflix has cited multiple times how streaming has boosted their subscriber base beyond their expectations. It has lowered churn and removed one of their biggest costs (shipping).

It has proven to be valuable now and has provided them a course for future growth and relevance. Like any smart business they made an investment in their future. They were also very fortunate to have it start paying unexpected dividends very quickly.

This sounds like a marketing press release. The bottomline. Streaming is not free for Netflix. End users have no choice but to get streaming if they want to watch more than 2 movies per month. We (Netflix customers) are paying for something whether we use it or not.

At some point, Netflix will charge users for streaming. Just like they charge users who want Blu-Ray. And it will be interesting to see who is willing to pay for it, and who is not.

Blu-ray will be 50% of market by 2012

Back on topic:

I say no. And... I can't prove it either. ;)

Netflix has stated explicitly that the premium price for Blu-ray is due to higher costs associated with Blu-ray.

It is clear. It is simple. There is no conspiracy (although that does not stop some from making some very elaborate theories).
The price increase justification doesn't add up since blu-ray replication, disc costs and retail prices have dropped and Netflix prices for blu-ray go up when only a FRACTION of a PERCENT of discs sent out are unplayable.

Lets see:

DVD subscriptions - No price increases
Streaming subscription - free with most Netflix subscriptions
Blu-ray subscription - Substantial price increase due to cost ????? :confused:

It's been speculated that DVD subscriptions are not paying for the streaming service, then it's obvious that blu-ray is subsidizing the streaming service.
No conspiracy. Just easy to see where the streaming subsidies are coming from when you put down the red koolaid.:)

From their SEC filing 2/25/09:
Studios have begun to release films in high definition format on Blu-ray. This new high definition format DVD has higher damage rates than we currently experience with standard definition DVDs. If we were to see a significant increase in the number of Blu-ray DVDs we ship or an increase in the percentage of Blu-ray DVDs our subscribers take and the damage rates remained higher than standard definition DVDs, our gross margins, profitability and cash flow could be adversely affected.

From a netflix VP:
The problem is not pervasive, says Steve Swasey, Netflix’s vice-president of corporate communications. "Our percentage of Blu-ray disks that members receive that are not playable is a fraction of a percent," he says.

What comment do we believe? We don't even know what percentage of S-DVDs break. And therefore we don't know how many blurays break - though apparently it is only "a fraction of a percent". I don't see how a "fraction of a percent" can lead to astronomically higher costs.

And once again, no where in the filing did Netflix mention how they are funding streaming. Since they didn't mention it explicitly - does that mean nothing is paying for it?

You seem to think that just because something wasn't mentioned doesn't mean it isn't true. They never mentioned what is funding streaming. Yet we know it is being funded somehow. So obviously, their omission does not mean that there is nothing there - it just means they chose not to mention it.

What are they going to say? We are going to charge bluray users an extra fee for something they might not use? That would piss people off even more.

Blu-ray usage increased. Their costs increased. They decided to charge for it. Simple.

And their streaming usage has also increased. Their costs increased ($100 million dollars for licensing fees alone). Yet they did NOT charge for that.:confused:

The price for their DVD plans has remained flat.

The price for bluray plans increased.

So what is paying for streaming?

They are only making "extra" money from bluray subscribers.

No matter what you say, you simply cannot prove that bluray fees are not funding streaming.

And yet again...
Does it really matter where the extra dollar gets spent? Sub or don't sub.

Stop the bickering with nonsense that no individual can validate.

And explain why Blockbuster is not charging more for their monthly plan?

Good question! And one where an actual discussion can be had (the reason Netflix is charging extra for Blu-ray is clear and obvious).


It appears that Blockbuster and Netflix have decided to take decidedly different paths in how they provide value to their customers.

Netflix has decided to provide extra value via their streaming offering. By all accounts it has been a massive success. Their subscribers are growing beyond expectations, their marketing costs have dropped and the attach rate on Netflix enabled devices is higher that expected (with even more partners joining in). The offering also positions them in a powerful seat for the future.

Blockbuster has decided to show extra value by not charging a premium for Blu-ray. They even made quite a show about it back in late May. It is unclear how it has impacted their subscriptions, costs, etc... but we should know more in their next financial report. It does not have the same sort of strategic benefit as streaming for a few reasons (including that it would be trivially easy for Netflix to match the offering).


When all is said and done, I believe the reason why Netflix charges for Blu-ray and not for streaming is because streaming represents a strategic offering for them, versus viewing Blu-ray as an evolution from DVD that does not provide them with any particular strategic advantage (in their business).

The price increase justification doesn't add up since blu-ray replication, disc costs and retail prices have dropped and Netflix prices for blu-ray go up when only a FRACTION of a PERCENT of discs sent out are unplayable.

Lets see:

DVD subscriptions - No price increases
Streaming subscription - free with most Netflix subscriptions
Blu-ray subscription - Substantial price increase due to cost ????? :confused:

It's been speculated that DVD subscriptions are not paying for the streaming service, then it's obvious that blu-ray is subsidizing the streaming service.
No conspiracy. Just easy to see where the streaming subsidies are coming from when you put down the red koolaid.:)

Streaming is included with all their rental plans.

What comment do we believe?

You should believe the legal filing that states:

Risk Factors

If any of the following risks actually occurs, our business, financial condition and results of operations could be harmed. In that case, the trading price of our common stock could decline, and you could lose all or part of your investment.

Studios have begun to release films in high definition format on Blu-ray. This new high definition format DVD has higher damage rates than we currently experience with standard definition DVDs. If we were to see a significant increase in the number of Blu-ray DVDs we ship or an increase in the percentage of Blu-ray DVDs our subscribers take and the damage rates remained higher than standard definition DVDs, our gross margins, profitability and cash flow could be adversely affected.

EDIT: BTW.. Netflix did a great job in mitigating this risk by adding the Blu-ray surcharge.


No matter what you say, you simply cannot prove that bluray fees are not funding streaming.

And you cannot prove that Blu-ray devices in people's homes do not make them act irrationally and illogically. Hence the logical fallacy.

What I can do it point to clear data from Netflix that states their higher costs associated with Blu-ray, and their comments where they cite those higher costs as the reason for the surcharge.

You are the one who made the assertion that Blu-ray price increases were mostly due to cover streaming costs. That is a baseless and unsupported assertion.

BTW... I am still finding your attempts to justify that one sentence very amusing. Most would have simply conceded that they had zero supporting information for the assertion.

The price increase justification doesn't add up since blu-ray replication, disc costs and retail prices have dropped and Netflix prices for blu-ray go up when only a FRACTION of a PERCENT of discs sent out are unplayable.

Lets see:

DVD subscriptions - No price increases
Streaming subscription - free with most Netflix subscriptions
Blu-ray subscription - Substantial price increase due to cost ????? :confused:

It's been speculated that DVD subscriptions are not paying for the streaming service, then it's obvious that blu-ray is subsidizing the streaming service.
No conspiracy. Just easy to see where the streaming subsidies are coming from when you put down the red koolaid.:)

There is no separation between DVD and streaming subscriptions. There are limited and unlimited plans, each which include value from DVD shipments and streaming services. Netflix has made a strategic decision to offer streaming, and it has payed off tremendously well in increased subscriptions. They made a solid business decision that has provided immediate results and has positioned them beyond being a "buggy whip" provider.


Regarding Blu-ray costs and breakage. It was enough for them to point it out specifically as a concern in a legal SEC filing.

...When all is said and done, I believe the reason why Netflix charges for Blu-ray and not for streaming is because streaming represents a strategic offering for them, versus viewing Blu-ray as an evolution from DVD that does not provide them with any particular strategic advantage (in their business).

So then why are they so scared to let streaming stand on its own? Why are they leveraging it with DVD and bluray?

Netflix (http://ir.netflix.com/secfiling.cfm?FilingID=1193125-09-37430):
Our core strategy is to grow a large subscription business consisting of DVD by mail and streaming content. We offer over 100,000 titles on DVD. In comparison, the 12,000 content choices available for streaming are relatively limited. We expect to substantially broaden the content choices as more content becomes available to us. Until such time, by bundling DVD and streaming as part of the Netflix subscription, we are able to offer subscribers a uniquely comprehensive selection of movies for one low monthly price. We believe this creates a competitive advantage as compared to a streaming only subscription service. This advantage will diminish over time as more content becomes available over the Internet from competing services, by which time we expect to have further developed our other advantages such as brand, distribution, and our proprietary merchandising platform. Despite the growing popularity of Internet delivered content, we expect that the standard definition DVD, along with its high definition successor, Blu-ray, (collectively referred to in this Annual Report as “DVD”) will continue to be the primary means by which most Netflix subscribers view content for the foreseeable future. However, at some point in the future, we expect that Internet delivery of content to the home will surpass DVD.
...
We believe, however, that DVD will continue to receive a preferential distribution window in light of the large profits DVD generates for the studios in the near term.


If streaming has such an advantage, why does it have to piggyback off of physical media for the "forseeable future"???:confused: When can it stand alone, and pay for itself???

You should believe the legal filing that states:

And you cannot prove that Blu-ray devices in people's homes do not make them act irrationally and illogically. Hence the logical fallacy.

What I can do it point to clear data from Netflix that states their higher costs associated with Blu-ray, and their comments where they cite those higher costs as the reason for the surcharge.

You are the one who made the assertion that Blu-ray price increases were mostly due to cover streaming costs. That is a baseless and unsupported assertion.

BTW... I am still finding your attempts to justify that one sentence very amusing. Most would have simply conceded that they had zero supporting information for the assertion.

Yet the fact remains that YOU simply cannot tell us how they are funding streaming. The fact remains that bluray fees are an extremely likely source of $$ that could be used to pay for their ENORMOUS ($100M+) fees for providing "free" streaming content.

Where does one get $100M extra dollars from without raising prices? Oh that's right.....they DID raise prices....BLURAY PRICES!

Netflix has decided to provide extra value via their streaming offering. By all accounts it has been a massive success. Their subscribers are growing beyond expectations, their marketing costs have dropped and the attach rate on Netflix enabled devices is higher that expected (with even more partners joining in). The offering also positions them in a powerful seat for the future.

Blockbuster has decided to show extra value by not charging a premium for Blu-ray. They even made quite a show about it back in late May. It is unclear how it has impacted their subscriptions, costs, etc... but we should know more in their next financial report. It does not have the same sort of strategic benefit as streaming for a few reasons (including that it would be trivially easy for Netflix to match the offering).


When all is said and done, I believe the reason why Netflix charges for Blu-ray and not for streaming is because streaming represents a strategic offering for them, versus viewing Blu-ray as an evolution from DVD that does not provide them with any particular strategic advantage (in their business).

PSound. I don't see how you or Netflix can point to streaming as some "massive success", when they are not generating any additional revenue from it. Sure, you can point to streaming and say that Netflix increased their userbase and has had less churn because of it. But couldn't the same be said of Blu-Ray? By all accounts Blu-Ray has been a massive success as well. Netflix announced that Blu-Ray was doing better than expected. So much so that they felt they could charge a premium on it and not lose too many customers in the process while continuing to add new customers.

And neither you, nor I, nor Netflix knows the impact that poor economy has had on buying vs renting. Anecdotaly I can tell you that many people on the various Blu-Ray forums I visit are renting more than they had planned because they are tightening their belts. I know I am. The fact that Red Box is growing rapidly and Blockbuster is getting into the kiosk space (while traditional B&M rental stores are hurting) tells me that consumers are looking to rent, and rent for cheap.

Now I do happen to think that including streaming is a value add for Netflix customers and was a smart movie by Netflix. I do think that it has helped them with regards to bringing in new customers or keep existing customers. But when they start charging for it (and they will have to at some point) we will see how much consumers really value the service, and what price they are willing to put on it.

Personally? I think the quality is subpar. I would rather wait for the BD to arrive at my doorstep and the lack of new releases via streaming will be a dealbreaker for many consumers.

So then why are they so scared to let streaming stand on its own? Why are they leveraging it with DVD and bluray?

Because it is not a mature stand-alone offering yet. And to be clear, no one has claimed it is. It is a great value-add for customers that has helped Netflix grow faster then their expectations.


Yet the fact remains that YOU simply cannot tell us how they are funding streaming.

I have clearly stated that the funding is coming from subscriber fees. The offering from Netflix is for DVD by mail and streaming services. It is a combined offering, and the mix has proved to be a growth catalyst today and a path for future growth and relevance.

And explain why Blockbuster is not charging more for their monthly plan?

Do we know how many BD subs BBi has? I have never seen any numbers - have you?

Speaking of Netflix streaming, do they stream most of their titles in HD?

Risk Factors
If any of the following risks actually occurs, our business, financial condition and results of operations could be harmed. In that case, the trading price of our common stock could decline, and you could lose all or part of your investment.

From Netfix:
We depend on studios and distributors to license us content that we can stream instantly over the Internet.
Streaming content over the Internet involves the licensing of rights which are separate from and independent of the rights we acquire when obtaining DVD content. Our ability to provide our subscribers with content they can watch instantly therefore depends on studios and distributors licensing us content specifically for Internet delivery. The license periods and the terms and conditions of such licenses vary. If the studios and distributors change their terms and conditions or are no longer willing or able to provide us licenses, our ability to stream content to our subscribers will be adversely affected. Unlike DVD, streaming content is not subject to the First Sale Doctrine. As such, we are completely dependent on the studio or distributor providing us licenses in order to access and stream content. Many of the licenses provide for the studios or distributor to withdraw content from our service relatively quickly. Because of these provisions as well as other actions we may take, content available through our service can be withdrawn on short notice. For example, in December 2008, certain content associated with our license from the Starz Play service was withdrawn on short notice. In addition, the studios have great flexibility in licensing content. They may elect to license content exclusively to a particular provider or otherwise limit the types of services that can deliver streaming content. For example, HBO licenses content from studios like Warner Bros. and the license provides HBO with the exclusive right to such content against other subscription services, including Netflix. As such, Netflix cannot license certain Warner Bros. content for delivery to its subscribers while Warner Bros. may nonetheless license the same content to transactional VOD providers. This ability to carve-up and maintain ongoing control over distribution rights, including the ability to withdraw content, is unique to streaming content. If we are unable to secure and maintain rights to streaming content or if we cannot otherwise obtain such content upon terms that are acceptable to us, our ability to stream movies and TV episodes to our subscribers will be adversely impacted, and our subscriber acquisition and retention could also be adversely impacted. During the course of our license relationship, various contract administration issues can arise. To the extent that we are unable to resolve any of these issues in an amicable manner, our relationship with the studios and distributors or our access to content may be adversely impacted.


Moving on......
Because it is not a mature stand-alone offering yet. And to be clear, no one has claimed it is. It is a great value-add for customers that has helped Netflix grow faster then their expectations.

I have clearly stated that the funding is coming from subscriber fees. The offering from Netflix is for DVD by mail and streaming services. It is a combined offering, and the mix has proved to be a growth catalyst today and a path for future growth and relevance.

He said Netflix would continue to invest a significant percentage of its earnings into improved content for the Watch Instantly streaming service totaling about $100 million this year, compared to $75 million in 2008.

The analyst said the 25% surge in streaming investment would be partially offset by reduced subscriber demand for DVD rentals and related postage and fulfillment expenses. He said Netflix’s average-revenue-per-user (ARPU) would begin to rise gradually through the company’s recent increase in Blu-ray pricing, resulting in improved operating leverage.

Pachter said Netflix’s recent content deal with MTV/Comedy Central for “South Park” episodes and related agreements with Starz substantially increase the quality of its streaming fare.

Research analyst Edward Woo concurred that Netflix is using the Blu-ray price increase to gauge subscriber reaction to a possible future charge for streaming.

“They will risk getting much better content by raising prices similar to what they are doing with Blu-ray users,” Woo said.
http://www.homemediamagazine.com/netflix/wedbush-netflix-spending-100m-streaming-2009-15352

From Netflix:
Operating Activities
During 2008, our operating activities consisted primarily of net income of $83.0 million, increased by non-cash adjustments of $225.1 million offset by a decrease in net changes in operating assets and liabilities of $24.1 million. The majority of the non-cash adjustments came from the amortization of the content library of $209.8 million which increased by $6.3 million over the prior period as we continue to purchase additional titles in order to support our larger subscriber base. The decrease in net changes in operating assets and liabilities was mainly driven by acquisitions of content library related to our streaming content, as we continued to increase our investments in streaming content in 2008. Cash provided by operating activities increased $6.6 million in 2008 as compared to 2007. This was primarily due to an increase in net income of $16.4 million, increased non-cash adjustments of $29.8 million and a decrease in net changes in operating assets and liabilities of $39.6 million.


Clearly the increase in bluray pricing is leveraging streaming costs. Where else are they going to make up the full $175 MILLION dollars and counting that they have already spent to fund streaming?

PSound. I don't see how you or Netflix can point to streaming as some "massive success", when they are not generating any additional revenue from it. Sure, you can point to streaming and say that Netflix increased their userbase and has had less churn because of it. But couldn't the same be said of Blu-Ray? By all accounts Blu-Ray has been a massive success as well. Netflix announced that Blu-Ray was doing better than expected. So much so that they felt they could charge a premium on it and not lose too many customers in the process while continuing to add new customers.

First off, I have never said that Blu-ray is not successful for Netflix. As you stated, they have successfully been able to charge a premium for it to offset their costs. Their Blu-ray strategy appears to be solid.

Regarding streaming... Netflix has cited it as a catalyst for their growth. Keep in mind that streaming looked to be a critical investment in Netflix's future. It has also turned out to have a very positive impact on them short-term.

Now I do happen to think that including streaming is a value add for Netflix customers and was a smart movie by Netflix. I do think that it has helped them with regards to bringing in new customers or keep existing customers. But when they start charging for it (and they will have to at some point) we will see how much consumers really value the service, and what price they are willing to put on it.

They may charge for it, but I certainly do not think they have to. In fact, I would think it would be a massive mistake if they did. They would lose their best competitive advantage over Blockbuster Online and slow their growth (and maybe even lose overall subscribers) at a time when they will be facing their first serious threat (in the form of ever expanding kiosks).

The streaming model fits in perfectly with Netflix's all-you-can-eat model. It removes one of their biggest costs (US Post Office), and allows them to offer MORE money per viewing to the studios (basically the $.88 of postage can now be given to the studios).

Streaming is still in it's infancy, which is probably a good thing for Netflix. They are going to have to build up the relationship with the studios so they can have the same sort of access to movies for streaming as they do with physical media.


And to be clear. I do not believe in any way that this is Blu-ray versus Streaming. They both have a place.

The only reason I entered this thread was to correct a statement that I believe to be false and unfounded... Namely that the Blu-ray surcharge exists mostly to pay for Netflix streaming. The original idea and the supporting arguments are not compelling or as clear as what Netflix has stated.

From Netflix:

There are risks associated with streaming. All those that Netflix has mentioned are valid and need to be resolved with the studios. The main selling point Netflix has in their favor is the reduction of shipping costs.

Basically, they can ask the studios if they want to see 1/3 of Netflix subscriber revenue go to the post office, or if they would rather provide them the rights to stream a digital copy and take that money instead.

It is going to take some time to get things sorted out as there are issues with release windows, existing contracts, etc.



The analyst said the 25% surge in streaming investment would be partially offset by reduced subscriber demand for DVD rentals and related postage and fulfillment expenses.

He said Netflix’s average-revenue-per-user (ARPU) would begin to rise gradually through the company’s recent increase in Blu-ray pricing, resulting in improved operating leverage.

You do realize that those two sentences are stand-alone statements, right?

Yes, the increase in investments towards streaming will be partially offset by reduced postage and fulfillment expenses.

Yes, the increase in Blu-ray pricing will increase the average-revenue-per-user... which is in itself offset by the increased costs to fulfill Blu-ray ordeers.


“They will risk getting much better content by raising prices similar to what they are doing with Blu-ray users,” Woo said.

One of the ideas that I have seen floating around is that of a tiered streaming service. Imagine having all the existing streaming services available as part of the basic subscription (like today), and a special streaming tier that gets you streaming access to content when it is released to DVD. I personally think that could be very successful as it does not risk the current base, still provides a distinct value over competitors AND provides a new revenue stream for a premier service.

I don't own a Blu-ray player and currently have no desire for one at this time. But if I did... I probably would pay a $1 extra to rent.

In 2012, when prices may drop for hardware/software, I'll help to meet that 50% expectation/prediction. I may even choose to download/stream. Thanks to those that "may" be subsidizing those expenditures today.

You do realize that those two sentences are stand-alone statements, right?


It'$ all related:
He said Netflix would continue to invest a significant percentage of its earnings into improved content for the Watch Instantly streaming service totaling about $100 million this year, compared to $75 million in 2008.

The analyst said the 25% surge in streaming investment would be partially offset by reduced subscriber demand for DVD rentals and related postage and fulfillment expenses. He said Netflix’s average-revenue-per-user (ARPU) would begin to rise gradually through the company’s recent increase in Blu-ray pricing, resulting in improved operating leverage.

...

Increased bluray pricing = improved operating leverage = increased earnings. Period.

Earnings? Where have I heard earnings before??
Netflix would continue to invest a significant percentage of its earnings into improved content for the Watch Instantly streaming service totaling about $100 million this year, compared to $75 million in 2008

No matter how you slice it, bluray is paying for streaming. And since it is the only thing that has had it's price increased in the face of $175+ MILLION SPENT to fund streaming, I believe that the increase in bluray pricing was largely to offset the cost of acquiring streaming content. Because they know most bluray customers are used to paying more for HD content.

Yes, the increase in investments towards streaming will be partially offset by reduced postage and fulfillment expenses. Key word: PARTIALLY. So what is going to pay for the parts that aren't offset???? Huh??? HINT: The answer lies above.

Yes, the increase in Blu-ray pricing will increase the average-revenue-per-user... which is in itself offset by the increased costs to fulfill Blu-ray orders. Which will increase overall earnings, said earnings then being used to acquire streaming content. Hence, the increased bluray pricing is being used to pay for streaming.

Case solved.

It'$ all related:


Increased bluray pricing = improved ouperating leverage = increased earnings. Period.

Earnings? Where have I heard earnings before??


No matter how you slice it, bluray is paying for streaming. And since it is the only thing that has had it's price increased in the face of $175+ MILLION SPENT to fund streaming, I believe that the increase in bluray pricing was largely to offset the cost of acquiring streaming content. Because they know most bluray customers are used to paying more for HD content.

Key word: PARTIALLY. So what is going to pay for the parts that aren't offset???? Huh??? HINT: The answer lies above.

Which will increase overall earnings, said earnings then being used to acquire streaming content. Hence, the increased bluray pricing is being used to pay for streaming. Case solved.

Except that it ignores the fact that Netflix has already explicitly stated that the Blu-ray price increase is related to Blu-ray costs. The Blu-ray surcharge is all about Blu-ray.

Look... if I was trying to be a pain I would be happy to say that the Blu-ray surcharge only existed to fund streaming. There would be something downright ironic about the strongest proponents of Blu-ray directly funding streaming technology and success. But that is not the case.


Key word: PARTIALLY. So what is going to pay for the parts that aren't offset???? Huh???
It is something those familiar with how businesses work call an "investment". Companies take earnings (or take loans) to invest in technologies and services that will allow them to grow in the future. It is very routine for companies to not realize gains on new products or technologies, particularly if they see a strategic opportunity for growth in the future of the product or service. Netflix has been very fortunate with streaming in that they are seeing immediate returns in the form of subscriber growth.

Netflix views streaming as a strategic investment. Interestingly enough, they are not willing to take a loss on Blu-ray and have increased their fees for that service. Blockbuster does see Blu-ray as a strategic investment and is not increasing prices for that service.

It will be interesting to see each companies financial statements next quarter.

Except that it ignores the fact that Netflix has already explicitly stated that the Blu-ray price increase is related to Blu-ray costs. The Blu-ray surcharge is all about Blu-ray. No where did they state that those were the ONLY reasons. Somehow you can't seem to understand that possibly one of the reasons they wanted to charge a fee for bluray was to have extra money to fund streaming.

It is not a hard thing to rationalize. They knew they couldn't raise DVD prices. They knew they had some wiggle room to raise bluray prices since people are used to paying more for HD.

That SEC filing isn't the be all end all. Plenty of things went unsaid in that document. Doesn't mean they don't exist. Do you expect them to admit to leveraging one consumer base to benefit another?

It is something those familiar with how businesses work call an "investment". Companies take earnings (or take loans) to invest in technologies and services that will allow them to grow in the future. It is very routine for companies to not realize gains on new products or technologies, particularly if they see a strategic opportunity for growth in the future of the product or service. Netflix has been very fortunate with streaming in that they are seeing immediate returns in the form of subscriber growth.

Netflix views streaming as a strategic investment. Interestingly enough, they are not willing to take a loss on Blu-ray and have increased their fees for that service. Blockbuster does see Blu-ray as a strategic investment and is not increasing prices for that service.

It will be interesting to see each companies financial statements next quarter.

Uh...I have already given a list of ways for them to pay for streaming which includes everything you just listed.

Simply put - they are investing revenue generated from increased bluray prices to fund streaming.

Nothing more needs to be said. Their strategic investment is being funded by increased bluray pricing.

No where did they state that those were the ONLY reasons. Somehow you can't seem to understand that possibly one of the reasons they wanted to charge a fee for bluray was to have extra money to fund streaming.

It is not a hard thing to rationalize. They knew they couldn't raise DVD prices. They knew they had some wiggle room to raise bluray prices since people are used to paying more for HD.

That SEC filing isn't the be all end all. Plenty of things went unsaid in that document. Doesn't mean they don't exist.



Simply put - they are investing revenue generated from increased bluray prices to fund streaming.

Nothing more needs to be said.

Thanks again! You have made my day.

:cool:

The extra $1 funds North Korean nuclear rocket tests. In 2012, it won't matter. ;)

Anyone here want to bet how long it'll take for this topic to get locked? :)

BTW, Blu-ray rocks and nothing in the world will take it away from me. Heck, VHS has been obsolete for a long time, yet I still use a VCR to record rather than using a Tivo.

The streaming model fits in perfectly with Netflix's all-you-can-eat model. It removes one of their biggest costs (US Post Office), and allows them to offer MORE money per viewing to the studios (basically the $.88 of postage can now be given to the studios).

Here's an interesting analysis of Netflix's streaming offerring as well as the inherent pros and cons.

http://www.fool.com/investing/general/2009/03/19/netflix-pays-the-price-for-free-streams.aspx

Netflix Pays the Price for Free Streams
By Rick Aristotle Munarriz
March 19, 2009 | Comments (0)

Netflix (Nasdaq: NFLX) may be thriving amid the recession, but one of its biggest draws could eventually become its Achilles heel.

The company's attractive pricing, home-delivered convenience, and "all-you-can-eat" subscription model have been just the ticket for homebound penny-pinchers. Netflix turned heads last month with the announcement that it topped the 10-million member mark, just weeks after closing out 2008 with 9.4 million subscribers. That's a rare feat these days for an entertainment company dependent on discretionary income.

A major driver of Netflix's growth is the DVD renter's welcome perk of offering subscribers to any Netflix unlimited plan the ability to stream movies online at no additional charge. That didn't seem like a big deal when the service was limited to awkward PC streaming. But it's a huge incentive now that you can stream more than 10,000 Netflix flicks into your living room through devices like TiVo (Nasdaq: TIVO) DVRs and Microsoft (Nasdaq: MSFT) Xbox 360 consoles.

Freebird as an encore
While Netflix offers Web streams at no additional cost to the subscriber, it's clearly footing some sort of bill itself. StreamingMedia.com decided to take a stab at nailing the bandwidth costs behind the streams this week.

It used the typical Xbox 360 video encoding rate, estimated the kind of pricing that content delivery networks Limelight (Nasdaq: LLNW) and Level 3 (Nasdaq: LVLT) are likely charging, and arrived at a price of $0.06 for a standard-definition movie and $0.09 for an average flick in HD.

That's a great rate compared to the company's bread-and-butter DVD-mailing business. Each movie shipped costs the company roughly $0.80 in postage alone, before we consider the mailer packaging costs and related distribution-center overhead. The comparison gets even better when you consider the wear and tear on physical DVDs, the amortized difference between what Netflix pays for a new DVD and what it ultimately unloads it for, and just the general inventory hassles that don't exist in digital delivery.

Slam dunk, right? Well, let's back up a bit. There is a physical limit for physical rentals. It takes, at best, two days to swap a viewed DVD for a new one. Online, a viewer is just seconds away from the next rental. The ability to stream content online may not necessarily slow the pace of physical DVD rental consumption.

Bow before royalty
We also haven't touched on royalties. The reason that new releases are rarely available through Netflix's streaming service is that studios can't afford to devalue their product that way. New flicks are available for streaming through companies like Apple (Nasdaq: AAPL) and Amazon.com (Nasdaq: AMZN), but the studios are there to collect juicy royalties on every virtual rental.

"That's why many of the content licensing deals Netflix has in place are a one time cost no matter how many movies are watched," explains StreamingMedia.com.

Fair enough, but weren't most of these deals inked when Netflix was simply pumping catalog content into computers? Won't the studios of even cobwebbed content demand more in the future?

In just the first few months of Xbox 360 availability, Netflix and Microsoft announced that 1.5 billion minutes were consumed by more than a million Xbox 360 GOLD subscribers. It will be hard for filmmakers to accept small, one-time payments when a variable model is better suited for the explosive growth of online streaming.

Let the end credits roll
All of this, for now, is moot. Online streaming is helping grow the membership rolls at Netflix. The healthy income statements show that the company is effectively managing its costs. The wide disparity between streaming overhead and DVD rentals under today's cost structure probably make online streaming accretive to the bottom line.

That may not always be the case. What if more couch potatoes kill off their cable subscriptions, relying more on Netflix streams? There are already blogosphere whispers (thus far unsubstantiated) claiming that Netflix is throttling online users -- giving active streamers cheaper, lower-quality flicks. If it's true, that makes sense. A member watching a high-def flick through Netflix every night is costing the company nearly $3 every month on bandwidth alone.

Ultimately, Netflix may have to pull the unthinkable and actually cap streaming usage, the way it did when it initially rolled out the service. It will do everything possible to avoid that, I'm sure, since Watch Now streams are a great selling point for Netflix as a service.

However, there is a price to every stream -- even if it's included at no additional cost.

The price increase justification doesn't add up since blu-ray replication, disc costs and retail prices have dropped

Care to back up that claim? I've seen nothing that shows that blu-ray replication costs have dropped. Last time I checked (it was late last year) Sony DADC and maybe 2 bigger replication factories. I believe the total lines capable of replication was 8.

I'm curious to read up where you got the info. IMO if there was drop in replication costs that would reflect in overall prices and right now unless the movie is an age old title remastered to Blu-ray, where they have to cut the price to sell them or they made more copies then they could sell, I haven't really seen any drastic drop in prices. Most movies at retail are still $24.99-$29.99.

Last I saw (Oct. 2008)

http://www.emedialive.com/images/default.aspx?imageid=5280


State of things from April 2009

One thing that isn’t standing out with smaller replicators is Blu-ray Disc.

“The whole Blu-ray Disc cycle hasn’t really taken off yet, or filtered down to the smaller, mid-size replicators,” Virgie said.

That was confirmed by Technicolor in March when its parent company, Thomson, blamed a nearly 31% year-over-year drop in profit due largely to lower worldwide volumes and price declines in physical medias, not offset by the growth in Blu-ray and distribution. For 2008, Technicolor’s DVD replication volume was down 5%, and Thomson posted a loss of $2.49 billion.

Expedia Media is unique in that it has BD25 lines, and is getting ready to install two BD50 lines. Sony DADC, Cinram and Technicolor handle most of the Blu-ray work for the industry.

http://www.homemediamagazine.com/replicators/ancillary-business-a-mixed-bag-15327


The Blu-ray session brought to the forth – once again – the “extortionate” cost of AACS licensing for independent replicators, and the challenges of competing against Sony DADC.

“The AACS charges four times,” says a disgruntled Laurent Villaume, CEO of French replicator QOL. “A licensing contract for the publisher, a license for the replicator at $15,000/year plus a $1,250 key per title, and €0.03 per disc. Given that piracy is taking away a lot of revenue potential, spending all this money on AACS is ridiculous, especially on catalogue titles.” This AACS cost is an obstacle to the growth of BD, because a number of independent publishers would like to release movies, but the fixed cost is too high particularly at this point in time when sales are still modest.

Not only is authoring and premastering of a BD disc complicated operations, but having to redo a test disc because of a mistake, however small, requires a new, expensive AACS key. “It’s already a complicated process and very expensive for smaller content owners,” notes Chris Nealy, VP European Operations, Sonic Solutions. “The system is set up for the big studios. It needs to be affordable to smaller studios. After all, DVD became a big success when it spread outside the Hollywood studios. AACS LA needs to reflect this reality.”

Another recurring theme is the difficulty for independent replicators to compete with “BD inventor, manufacturer, distributor” Sony DADC – who control nearly 90% of the market. “A level-playing field via a global licensing system for disc and players is in order,” said QOL’s Villaume. “I had feared that some companies did not want to play the BD games on the basis of the sharing of royalties.”

With a monopoly on the manufacturing side, Sony DADC does not make it easy for the other replicators to commit the huge investment necessary,” argues Jean-Michel Cathonnet, VP European Logistics & Distribution, Cinram. “If Hollywood studios will not share their production requirements with independent replicators with local knowledge, as was the case with VHS, they will be faced with a dearth of capacity as DVD replicators will have little incentive to convert to Blu-ray.”



http://www.dvd-intelligence.com/display-article.php?article=638

All of this seems to be that costs have not dropped and that we are not even close to getting large scale Blu-ray replication due to BDA members greed. Namely Sony who wants to control all production/replication of Blu-ray, which doesn't surprise me since that was the point of a proprietary format for anything they've done so far (read UMD, Memory sticks etc).

To tie this in, into the whole topic of the thread. With this, they will have no way of reaching 50% of the market by 2012. Unless they allow and lower the costs of licensing and replication for Blu-ray discs. Something that ESCA optimistic estimate is not taking in consideration.

Care to back up that claim? I've seen nothing that shows that blu-ray replication costs have dropped. Last time I checked (it was late last year) Sony DADC and maybe 2 bigger replication factories. I believe the total lines capable of replication was 8.

I'm curious to read up where you got the info. IMO if there was drop in replication costs that would reflect in overall prices and right now unless the movie is an age old title remastered to Blu-ray, where they have to cut the price to sell them or they made more copies then they could sell, I haven't really seen any drastic drop in prices. Most movies at retail are still $24.99-$29.99.

Last I saw (Oct. 2008)

http://www.emedialive.com/images/default.aspx?imageid=5280


From April 2009



http://www.homemediamagazine.com/replicators/ancillary-business-a-mixed-bag-15327

PacificDisc Announces Lower Blu-ray Replication Pricing (http://www.blu-ray.com/news/?id=2725)

PacificDisc Announces Lower Blu-ray Replication Pricing
Posted May 20, 2009 02:26 PM by Juan Calonge

Replication company PacificDisc has increased its Blu-ray capabilities by bringing the mastering in-house and announcing aggressive new pricing. According to Bob Novelli, VP of Marketing, "this makes entry into the BD space much more affordable for the independent producer, which is our target market."

As a reference, current pricing for an order of 5,000 bulk BD25 discs would be $9,350, including replication, AACS and mastering (but excluding shipping and taxes). That is to say, overall unit price would be $1.87 per disc.

As is always the case in replication, the per-disc cost varies depending on order size. A larger order of 10,000 units would cost $16,600 ($1.66 per disc), whereas a small order of 1,000 units would run a bill of $3,580 ($3.58 per disc), again including mastering, AACS and replication.

These prices are noticeably better than those that were applied in the recent past. For example, the pricing for replicating 5,000 bulk BD25s (not counting AACS and mastering) has decreased from $3.15 per disc in August 2007 to $1.47 per disc now, or a drop of over 50 percent.

AACS fees have also dropped by around 20 percent (from $1,585 + $0.05/disc to $1,300 + $0.04/disc). However, they continue to be steep for smaller runs. For example, an independent producer ordering 5,000 discs must pay $1,500 in AACS fees alone - in other words, compulsory AACS costs him 30 cents per disc.

Blu-ray Disc – A chance to win for the industry
Dieter Daum
CEO, Sony DADC Global
MEDIA-TECH
Frankfurt
May 6th, 2008 (http://www.media-tech.net/fileadmin/templates/expo08/pdf/presentations/Mediatech%20Keynote%20Speech%20DDAUM.pdf)

This charts the reduction in cost for BD50 per unit as well as increases in yield rates in comparision to DVD.

http://www.freeimagehosting.net/uploads/82900c68a1.png (http://www.freeimagehosting.net/)

PacificDisc Announces Lower Blu-ray Replication Pricing (http://www.blu-ray.com/news/?id=2725)


Thanks.

It seems that price hasn't changed for smaller runs but mostly for 10,000+ runs. I guess that's positive.

It still remains a problem with the number of replication factories. This obviously doesn't translate to retail as much.

Here's an interesting analysis of Netflix's streaming offerring as well as the inherent pros and cons.

http://www.fool.com/investing/general/2009/03/19/netflix-pays-the-price-for-free-streams.aspx

Great article! Thanks for posting this.

There is one point that I did not see mentioned in the article. Netflix mentioned that based on their initial studies that people who use the streaming are averaging less discs shipped per month. Even if a person cuts out one disc per month, that is $.88 less shipping costs for one customer.


From the article:

A member watching a high-def flick through Netflix every night is costing the company nearly $3 every month on bandwidth alone.

A customer watching a high def movie every night is likely NOT going through as many physical discs as before.... :-)

A customer watching a high def movie every night is likely NOT going through as many physical discs as before.... :-)

And I believe this trend will only increase and why the article posted here on AVSForum a while back explaining that as more and more Blu-ray players and home entertainment units supporting some kind of streaming or Netflix actually create less optical media (be it DVD or Blu-ray) purchases or rentals and the more there is the more it will become relevant.

This is an interesting thing to observe as it affects the growth of Blu-ray as well.

As for Blu-ray hitting 50% of the DVD market in 2012, I'd have to agree with some people here. The question is what DVD market will look like in 2012 and how big is going to be. If one market is shrinking and the other one is growing, it makes it easier for the growing market to reach 50% of the failing market. It would be more precise and straightforward if they pointed out whether that 50% will be comparable to today's DVD market or the market in 2012. Add the fact that those who stream are less likely to use optical discs is definitely playing a role.

Great article! Thanks for posting this.

There is one point that I did not see mentioned in the article. Netflix mentioned that based on their initial studies that people who use the streaming are averaging less discs shipped per month. Even if a person cuts out one disc per month, that is $.88 less shipping costs for one customer.


From the article:



A customer watching a high def movie every night is likely NOT going through as many physical discs as before.... :-)

There is a potential downside with streaming though which may necesitate Netflix to "manage" it's use. While there is a savings per streaming rental per disc rental, the physical disc rental model allowed for a natural limitation of rentals per month. With streaming there isn't that built in limitation so a member could potentially rent 1-3 movies or TV programs per day via streaming if not capped. That could potentially increase Netflix's costs rather than decrease it. Therein lies the potential problem. As stated in the article: "A member watching a high-def flick through Netflix every night is costing the company nearly $3 every month on bandwidth alone."

It'$ all related:


Increased bluray pricing = improved operating leverage = increased earnings. Period.

Hence, the increased bluray pricing is being used to pay for streaming.

Case solved.

given that netflix runs a reasonable business, IF they are taking earnings out of Blu Ray and investing it in streaming, guess where they believe their investment has the highest returns on?

It would be foolish to take money out of Blu Ray and put it into streaming IF a $ invested in Blu Ray added more value to the company.

One can easily make the case that Blockbuster has a better Blu Ray strategy than Netflix. Online and store rentals. But Netflix clearly has the better streaming strategy. Guess who is valued more?

Case solved.

PacificDisc Announces Lower Blu-ray Replication Pricing (http://www.blu-ray.com/news/?id=2725)



Blu-ray Disc – A chance to win for the industry
Dieter Daum
CEO, Sony DADC Global
MEDIA-TECH
Frankfurt
May 6th, 2008 (http://www.media-tech.net/fileadmin/templates/expo08/pdf/presentations/Mediatech%20Keynote%20Speech%20DDAUM.pdf)

This charts the reduction in cost for BD50 per unit as well as increases in yield rates in comparision to DVD.

http://www.freeimagehosting.net/uploads/82900c68a1.png (http://www.freeimagehosting.net/)

This is good. but most computers still don't offer blu ray drives. They are optional even for high end Dells and HP. Sony is the only one making Blu Ray drives mandatory and they're no longer cometitive in the PC market.

By 2000 all laptops my company offered already came with dvd drives. 2009 and not a single computer we get comes with a blu ray drive.

As a movie format blu ray may end up OK, but as a computer format its doing very very poorly compared to DVD.

I believe last year we had the 5% enthusiasts enter the Blu Ray market, then when prices fell end of last year we got the other 5% price sensitive enthusiast enter the market by early this year. And since Jan of 09 the market penetration of Blu ray which is really people switching from dvd to blu ray has been at 10%. I doubt it'll go beyond 20% by 2012 unless studios decide to price blu rays at or below dvd prices.

There is a potential downside with streaming though which may necesitate Netflix to "manage" it's use. While there is a savings per streaming rental per disc rental, the physical disc rental model allowed for a natural limitation of rentals per month. With streaming there isn't that built in limitation so a member could potentially rent 1-3 movies or TV programs per day via streaming if not capped. That could potentially increase Netflix's costs rather than decrease it. Therein lies the potential problem. As stated in the article: "A member watching a high-def flick through Netflix every night is costing the company nearly $3 every month on bandwidth alone."

Netflix streaming quality (especially their silverlight crap player) is so bad that no one in their right mind could watch more than a couple of movies on a big screen in a week!

Right now it's OK as a free product. It just isn't there qualitatively. Hulu doesn't have as much content but their video quality is far superior to Netflix on my HTPC and 60 inch plasma. Netflix Watch Now is very mediocre right now, mostly VHS quality.

I have a 20mbps cox connection.

There is a potential downside with streaming though which may necesitate Netflix to "manage" it's use. While there is a savings per streaming rental per disc rental, the physical disc rental model allowed for a natural limitation of rentals per month. With streaming there isn't that built in limitation so a member could potentially rent 1-3 movies or TV programs per day via streaming if not capped. That could potentially increase Netflix's costs rather than decrease it. Therein lies the potential problem. As stated in the article: "A member watching a high-def flick through Netflix every night is costing the company nearly $3 every month on bandwidth alone."

The limiting factors for streaming are time and (for now) content.

Many people simply do not have time to watch a movie every day of the week, let alone 3 or 4. Most do not have the desire to watch a new movie every day of the week!

The typical person will not be consuming a movie every day of the week.

And let's suppose someone who used to watch 12 movies a month via Netflix (DVD) does start streaming a new HD movie once per day. Even if they decide to watch two movies (one streaming and one physical) 6 times a month, it would still result in 6 less physically shipped movies a month. That would result in Netflix paying the post office $5.28 less that month.... a net delivery savings of $2.28 in an extreme case of someone going from watching 12 movies a month to watching 37 movies a month.


When all is said and done, the delivery costs of using the USPS as a means of delivery content is so high that streaming is still beneficial to the studios and Netflix even if consumption of content increases with streaming. 1/3 of all Netflix subscriber revenue ends up going to the USPS. That is an awful lot of cash that both Netflix and the studios would rather see going into their pockets.

http://forum.blu-ray.com/images/smilies/imported/rofl.gif
Some folks needs to do a little research into BRM (Business Reply Mail). If you believe that Netflix and Blockbuster is paying 88¢ for round trip postage then there is no help for you. IIRC, the BRM rate before the recent rate increase was about 6¢ each way (12¢ total). IMO, Netflix probably pays less than 10¢ round trip because of their volume. USPS site does not list volume rates that Netflix does.

http://forum.blu-ray.com/images/smilies/imported/rofl.gif
Some folks needs to do a little research into BRM (Business Reply Mail). If you believe that Netflix and Blockbuster is paying 88¢ for round trip postage then there is no help for you. IIRC, the BRM rate before the recent rate increase was about 6¢ each way (12¢ total). IMO, Netflix probably pays less than 10¢ round trip because of their volume. USPS site does not list volume rates that Netflix does.

Netflix pays first class postage rates, although the USPS has indicated they may add a surcharge due to extra handling requirements when shipping "DVDs".

From Netflix's SEC filing:

Increases in postage delivery rates could adversely affect our gross profit if we elect not to raise our subscription fees to offset the increase. The U.S. Postal Service increased the rate for first class postage on May 12, 2008 to 42 cents. The U.S. Postal Service has announced an increase in the rate for first class postage effective in May 2009 by 2 cents to 44 cents and it is also expected that the U.S. Postal Service will raise rates again in subsequent years in accordance with the powers given the U.S. Postal Service in connection with the 2007 postal reform legislation. The U.S. Postal Service continues to focus on plans to reduce its costs and make its service more efficient. If the U.S. Postal Service were to change any policies relative to the requirements of first-class mail, including changes in size, weight or machinability qualifications of our DVD envelopes, such changes could result in increased shipping costs or higher breakage for our DVDs, and our gross margin could be adversely affected. For example, the Office of Inspector General at the U.S. Postal Service issued a report in November 2007 recommending that the U.S. Postal Service revise the machinability qualifications for first class mail related to DVDs or to charge DVD mailers who don’t comply with the new regulations a 17 cent surcharge on all mail deemed unmachinable. We do not anticipate any material impact to our operational practices or postage delivery rates arising from this report. Also, if the U.S. Postal Service curtails its services, such as by closing facilities or discontinuing or reducing Saturday delivery service, our ability to timely deliver DVDs could diminish, and our subscriber satisfaction could be adversely affected.

Note that the rate of $.88 round-trip also lines up with Netflix's statements that 1/3 of their revenue ends up going to the USPS.

Netflix pays first class postage ratesThe BRM is first class mail.

although the USPS has indicated they may add a surcharge due to extra handling requirements when shipping "DVDs".If they do then Netflix’s operating cost of doing business will be impacted, till then it is immaterial.

The BRM is first class mail.

If they do then Netflix’s operating cost of doing business will be impacted, till then it is immaterial.

They do not ship BRM. They ship standard first class.

In their earnings report they are discussing the rate of $.44 each way, although it sounds like they receive a discount because of how outbound processing works. I do not know the standard discount, but I am guessing it is not more than 10% (or $.05).

Inbound mail is the full $.44

I will make a mental note to use the estimated round trip shipping cost at $.83 instead of $.88 in future postings.

From their SEC filings:

Cost of Revenues

Postage and Packaging.

Postage and packaging expenses consist of the postage costs to mail DVDs to and from our paying subscribers and the packaging and label costs for the mailers. Between January 8, 2006 and May 13, 2007, the rate for first-class postage was $0.39. The U.S. Postal Service increased the rate of first class postage by 2 cents to $0.41 effective May 14, 2007 and by one cent to $0.42 effective May 12, 2008. We receive discounts on outbound postage costs related to our mail preparation practices.

Then explain why bluray was initially free.:confused:

Why did Netflix charge the least ($0) when bluray was most expensive for them (2006/2007) and the most ($1-4) when bluray is less expensive to them (2008/2009)?


Are you guys still debating the Netflix Blu-ray/Streaming conspiracy?
Do people honestly believe that Netflix raised Blu-ray prices to pay for streaming and not to offset the added costs of Blu-ray discs?
What is the motive? Are they trying to discourage BD use and force people to use streaming?

As I said before the 2 events are completely unrelated. By offering unlimited streaming with unlimited plans Neflix can increase revenue by getting users to switch to those more expensive plans. It also is a bonus that will attract users to Netflix and away from competing services which will also increase revenue. They can then take that added revenue and pay the bills that they rang up for beefing up the streaming infrastructure.

IMHO, we have people upset that Netflix is charging a dollar more for Blu-ray and they want something to blame. Rather than understanding that BDs typically cost more than DVDs, they try to find a scapegoat.

Good idea - back on topic . . .

That is 3.5 years away. And here is an issue that has not been discussed. That 50%. Is it total revenue? As in sales and rentals or is it sales only? And if sales only - then why?

BD may make 10% at the end of 2009. To go from 10% to 50% in 3 years? Riiiiight. :rolleyes:

Thanks, for getting back to the topic. I said before that the video market is fragmenting more and more every year. There is no way Blu-ray can reach 50% of the market in 3 years. There will be too many other options. The fact is by then almost every BD player (IMHO and many insiders too) will support BD, DVD and streaming, so even if there was a BD player in every home, people will be using them for multiple formats.

They do not ship BRM. They ship standard first class.

In their earnings report they are discussing the rate of $.44 each way, although it sounds like they receive a discount because of how outbound processing works. I do not know the standard discount, but I am guessing it is not more than 10% (or $.05).

Inbound mail is the full $.44

I will make a mental note to use the estimated round trip shipping cost at $.83 instead of $.88 in future postings.

From their SEC filings:
Where in the SEC filing does it state they USE 1st class shipping?
The filing only states facts about the 1st class postage increase but no mention that is the rate/method used by Netflix.
The statement seems to use the increase as a benchmark/talking-point to indicate price increases but does not mention what rate Netflix is ACTUALLY paying. Almost like they are trying to justify their extreme profit loss from their streaming service and saying they can save their investors money if they ship less DVD's and do more streaming even though they are giving it away for FREE :confused: .
FREE != profit

Basically, indirectly trying to say "let us give away streaming because shipping DVD's will cost more money in the immediate future" without making a statement on how much(%) of a postage increase and how it will effect their profits. Sounds like cooperate spin to justify profit loss.

Thanks.

It seems that price hasn't changed for smaller runs but mostly for 10,000+ runs. I guess that's positive.

It still remains a problem with the number of replication factories. This obviously doesn't translate to retail as much.

The cost for smaller studios and smaller replication runs for AACS will be lowering soon:
AACS License Fees Slashed
Posted July 2, 2009 03:40 AM by Juan Calonge

Blu-ray Disc The final AACS license (see our news posts of June 8 and June 12) also addresses one of the most frequents complaints small studios and replicators had about Blu-ray: the license fees. As summarized in a note by Sonic Solutions, AACS fees have dropped for all content holders, but the biggest savings are for first-time and low-volume publishers.

These are the fees and how they change:

AACS Content Provider Agreement Fee: this is the fee that a studio or content holder must pay to become an AACS Content Provider. It used to be $3,000 up front. Now it is payable in annual $500 increments, and the Content Provider can terminate its agreement at any time. This one change makes it possible for first-time and low volume content holders to get going with BD with a much lower start-up investment and at affordable per-title costs.

Content Certificate and Order Fulfilment Fee: this fee is for each glass master produced. It has dropped from $1,300 per title to $500 per title.

Media fee: this fee is applied for each disc replicated, and it stays unchanged at $0.04 per disc.

For example, the AACS costs for a first-time Blu-ray Disc publisher (for a run of 2,000 copies) has dropped from $4,380 (3,000 + 1,300 + 0.04 * 2,000) to just $1,080 (500 + 500 + 0.04 * 2,000), that is to say, a saving of over 75%.

For a publisher that has already been publishing on BD and hence has already paid his Content Provider Agreement Fee, the fees to publish a run of 2,000 units have dropped from $1,380 to just $580.


http://www.blu-ray.com/news/?id=3027

Since 2007 we have seen replication costs drop 50%. My guess is that we will see a similar drop between 2009 and 2012.

And it really makes you wonder what the larger studios are paying for runs of 100K or more, or 1,000,000 or more.

The cost for smaller studios and smaller replication runs for AACS will be lowering soon:


http://www.blu-ray.com/news/?id=3027

Since 2007 we have seen replication costs drop 50%. My guess is that we will see a similar drop between 2009 and 2012.

And it really makes you wonder what the larger studios are paying for runs of 100K or more, or 1,000,000 or more.

Wouldn't that mean it won't cost anything?

50% + 50% = 100%

Wouldn't that mean it won't cost anything?

50% + 50% = 100%

I think he meant 50% of the amount after that. So 25% of the original.

Where in the SEC filing does it state they USE 1st class shipping?
The filing only states facts about the 1st class postage increase but no mention that is the rate/method used by Netflix.

Really? Them talking about the EXACT prices of first class mail and indicating how it could impact their business is not enough?

There are other sources that state that Netflix is indeed paying first class postage rates, and Netflix CEO Reed Hastings has repeatedly discussed subscriber revenue as going 1/3 to the Studios, 1/3 to Netflix and 1/3 to the Post Office which financially fits in perfectly with first class postage rates.

But before I post any other data or links. Do you truly believe that Netflix is paying something other than first class postage?


The statement seems to use the increase as a benchmark/talking-point to indicate price increases but does not mention what rate Netflix is ACTUALLY paying. Almost like they are trying to justify their extreme profit loss from their streaming service and saying they can save their investors money if they ship less DVD's and do more streaming even though they are giving it away for FREE :confused: .
FREE != profit

Basically, indirectly trying to say "let us give away streaming because shipping DVD's will cost more money in the immediate future" without making a statement on how much(%) of a postage increase and how it will effect their profits. Sounds like cooperate spin to justify profit loss.

Netflix is not losing money on their offering. Their entire revenue source is their subscription service which included DVD and the streaming service. Their growth has been phenomenal and their financials are solid.

Again, Netflix has repeatedly stated that 1/3 of subscriber revenue currently goes to the Post Office, which is a massive expense. Any company that consumes 1/3 of their revenue is not overexagerating the impact that expense has on their bottom line.

They do not ship BRM. They ship standard first class.I no longer subscribe to Netflix but I happen to have a Blockbuster DVD/BD mailer. You can clearly see that it is BRM and it is First Class. Feel free to post a picture of a Netflix mailer showing that it is not a First Class BRM mailer.

As stated earlier I would be surprised if either Netflix or Blockbuster is paying much over 10¢ for round trip mailings.

http://farm4.static.flickr.com/3459/3700731843_c5205d2775.jpg

I no longer subscribe to Netflix but I happen to have a Blockbuster DVD/BD mailer. You can clearly see that it is BRM and it is First Class. Feel free to post a picture of a Netflix mailer showing that it is not a First Class BRM mailer.

As stated earlier I would be surprised if either Netflix or Blockbuster is paying much over 10¢ for round trip mailings.

http://farm4.static.flickr.com/3459/3700731843_c5205d2775.jpg
Just for fun...

Explain how 1/3 of Netflix revenue is going to the Post Office based on $.10 round trip postage rates.

Just for fun...

Explain how 1/3 of Netflix revenue is going to the Post Office based on $.10 round trip postage rates.Will do right after you prove Netflix not using First Class BRM mailers.

Just for fun...

Explain how 1/3 of Netflix revenue is going to the Post Office based on $.10 round trip postage rates.

http://i302.photobucket.com/albums/nn84/bt12483/netflixEnvelope.jpg

Overview:
For an annual permit fee, a Business Reply Mail (BRM) permit is available for distributing business reply cards, envelopes, self-mailers, cartons, and labels. BRM allows the permit holder to receive First-Class Mail and Priority Mail back from customers by paying postage only on the mail returned. The BRM permit holder guarantees payment of First-Class Mail postage plus a per piece charge for pieces returned by the USPS (see payment options below).

...

Payment Options (507.9.0):

For a complete listing of Business Reply Mail prices, see Notice 123-Price List.

Basic BRM—
Annual permit fee of $185.00.
Per piece charge of $0.74 in addition to the First-Class Mail or Priority Mail postage. Paid through an advance deposit account or by cash/check on delivery.



High-Volume BRM—
Annual permit fee ($185.00) plus a BRM annual account maintenance fee of $585.00 for each account at each delivery unit.

Per piece charge of $0.083 in addition to the First-Class Mail or Priority Mail postage. Paid through an advance deposit account.

Best suited if return volume for letters is approximately 891 pieces or more per year.



Basic Qualified Business Reply Mail (QBRM)—
Annual permit fee ($185.00) plus a BRM annual account maintenance fee of $585.00.

Per piece charge of $0.052 plus a lower QBRM automation First-Class Mail postage price. Paid through an advance deposit account.

Used only on barcoded automation-compatible cards and letter-size mail weighing up to 2 ounces if design is approved for QBRM by USPS before distribution (507.9.3). A unique ZIP+4 code is assigned by the USPS for each price category of QBRM to be returned (one for card-price pieces, one for letter-size pieces weighing 1 ounce or less, and one for letter-size pieces weighing over 1 ounce up to 2 ounces).

Best suited if return volume is approximately 851 pieces or more annually.



High-Volume QBRM—
Annual permit fee ($185.00) and a BRM annual account maintenance fee ($585.00) and separate quarterly fee of $1,925.00. Mailers can pay quarterly fee for any consecutive 3-calendar-month period.

Per piece charge $0.007 plus lower QBRM automation First-Class Mail postage price. Paid through an advanced deposit account.

Best suited if return volume is approximately 42,778 pieces or more quarterly. http://pe.usps.gov/text/qsg300/q507a.htm

You figure it out.

Will do right after you prove Netflix not using First Class BRM mailers.

I showed the proof. Netflix discussing first class postage rates and how it impacts their business. Their financials line up with this.

Now show me how you $.10 round-trip idea could be based on any sort of reality based on Netflix's financials and Hastings repeated discussion on how 1/3 of subscriber revenue goes to the USPS.

I am going to make a bold prediction that you will make an excuse to not do this because you know you are wrong and your numbers don't work. :p

This is fun! Watching people intentionally trying to spread misinformation because the facts disturb them...

Some folks needs to do a little research into BRM (Business Reply Mail). If you believe that Netflix and Blockbuster is paying 88¢ for round trip postage then there is no help for you.

FWIW... just received a NetFlix. "First Class". Return envelope "First Class Permit Reply Mail". Not BRM. My research is complete. :p

I showed the proof.That is not proof, I suggest that you look at the post right above yours.

FWIW... just received a NetFlix. "First Class". Return envelope "First Class Permit Reply Mail". Not BRM. My research is complete. :pYour research may be complete but your reading skills needs some work. See the post above!!

I no longer subscribe to Netflix but I happen to have a Blockbuster DVD/BD mailer. You can clearly see that it is BRM and it is First Class. Feel free to post a picture of a Netflix mailer showing that it is not a First Class BRM mailer.

As stated earlier I would be surprised if either Netflix or Blockbuster is paying much over 10¢ for round trip mailings.

http://farm4.static.flickr.com/3459/3700731843_c5205d2775.jpg

Such a envelope alone is probably more than 10 cents.

I read just fine... I didn't see "Business Reply Mail". :confused:

The cost for smaller studios and smaller replication runs for AACS will be lowering soon:


http://www.blu-ray.com/news/?id=3027

Since 2007 we have seen replication costs drop 50%. My guess is that we will see a similar drop between 2009 and 2012.

And it really makes you wonder what the larger studios are paying for runs of 100K or more, or 1,000,000 or more.

There was a thread on this a few months ago. It had some good info. There is more to disc costs than just replication.

I read just fine... I didn't see "Business Reply Mail". :confused:

I did see "First Class Mail Permit".

And I see "First-Class Mail US Postage PAID" on my Blockbuster envelope.


Plus that all lines up with the financial data. It is known and accepted that these DVD-by-mail companies pay First Class postage rates. It is why analysts discuss how increases in First Class mail rates will impact these businesses.

My question is...
The first example of a return envelope is "business". Mine is not. So... what's the difference (based on my reading skills)? And... there are obvious differences between the two return mailers. ;)

I read just fine... I didn't see "Business Reply Mail". :confused:I did not see any permit number in you picture. I do not know the rules regarding the printing of the permit number on the envelope, do you? Do you know of any USPS Reply Mail that is not Business Mail? If so, can you provide a link? How do you explain the discrepancy between your picture and the one posted by bt12483?

It should be clear to anyone that Blockbuster and Netflix are using USPS First Class BRM. What we don’t know is the exact rate paid. IMO, they are paying less than the amount shown by bt12483 (highlighted in Red) because of the very high volume.

It makes one want to http://forum.blu-ray.com/images/smilies/imported/banghead.gif because we have been down this road several times. Some people never learn!!

Plus that all lines up with the financial data. It is known and accepted that these DVD-by-mail companies pay First Class postage rates. It is why analysts discuss how increases in First Class mail rates will impact these businesses.
But you seem to claim they are paying the standard consumer rate.
I believe that is the discussion.
Yes, they are paying 1st Class postage but at the standard consumer rate is what most of us are debating that they/Netflix is NOT paying but a much lower rate like most businesses(BRM).

As I mentioned before, the mention of 1st Class postage in their SEC filing and using the consumer rate increases as a reference appears to be a talking point.

But you seem to claim they are paying the standard consumer rate.
I believe that is the discussion.
Yes, they are paying 1st Class postage but at the standard consumer rate is what most of us are debating that they/Netflix is NOT paying but a much lower rate like most businesses(BRM).

As I mentioned before, the mention of 1st Class postage in their SEC filing and using the consumer rate increases as a reference appears to be a talking point.

They are paying the full rate on the return mail.

They are getting a discount on outbound mail because they can bundle it. The best estimate I have read is an $.08 discount on the outbound mail.

Again, these numbers add up and support Netflix's claim that 1/3 of subscriber revenue is paid to the post office.

It should be clear to anyone that Blockbuster and Netflix are using USPS First Class BRM. What we don’t know is the exact rate paid. IMO, they are paying less than the amount shown by bt12483 (highlighted in Red) because of the very high volume.

Incorrect. Every analyst discusses how Netflix (and Blockbuster) are impacted by First Class mail rates ($.44 each way). It also matches up with their financial statements, and Reed Hastings discussion on how 1/3 of subscriber revenue goes to the post office.

You are welcome to show a model where $.10 roundtrip shipping(or thereabouts) fits in with their financial statements. Of course you won't, because you can't. All the data and information supports them paying full First Class USPS rates (minus an outbound discount for doing bundling).

But you seem to claim they are paying the standard consumer rate.Plasmaman, IMO it will not do any good to argue with this person. We have posted pictures (Netflix and Blockbuster) showing that they are using First Class BRM. Links and quotes have been posted for USPS information.

Apparently the person belives Netflix is stupid enough to pay full 1 piece First Class mail rates.

Not sure if it helps, but when I searched USPS I found that they charge businesses 38 cents for a 1 ounce flat mailer and 55 cents for a 2 ounce flat mailer. This was for First Class and I plugged in 10 million units.

Discount/Bulk Calculator – Compute prices for all discount mail- Business Price Calculator (http://dbcalc.usps.gov/)

From what I have read Netflix saves about 1/2 for returns because they pick them up directly from the Post Offices. They say this saves them about 100 million a year.

How much does a Netflix mailer with a disc weigh?

Plasmaman, IMO it will not do any good to argue with this person. We have posted pictures (Netflix and Blockbuster) showing that they are using First Class BRM. Links and quotes have been posted for USPS information.

Apparently the person belives Netflix is stupid enough to pay full 1 piece First Class mail rates.

I simply believe in facts and information. Ultimately, ignorance serves no one.

Posting info from the Post Office does not tell us what Netflix pays in shipping. Reading how Netflix specifically cites First Class postage rates and how it impacts their business is key. So is data analysis.



The Post Office has reported that they ship approximately 2 million DVDs out from Netflix a day.

Another customer success highlighted during the session was Netflix, which mails about 2 million DVDs each day — exclusively with the Postal Service.

http://www.usps.com/communications/pccinsider/2009/pcc_0519se.htm

Netflix ships First Class mail. Their CEO has repeatedly stated that 1/3 of subscriber revenue goes to the post office.

Hastings: No. In streaming, anyone can do the mechanics of it. It'd be a very competitive market. The difference is in the DVD world, of all our revenue -- a third of it goes to studios, a third of it goes to the post office and a third is for us. The gross margin is about 33%. In streaming, two-thirds will go to the studio, the post office will get none, and we'll get a third.

http://www.hackingnetflix.com/2009/04/hollywood-reporter-interviews-netflix-ceo-reed-hastings.html


Let's assume that Netflix ships 261 days a year (Monday-Friday) and not factor in holidays.

2,000,000 DVDs sent out a day. Assume the same number (on average) are returned a day. Let's use the roundtrip rate of $.80 (that factors in their discount for bundling the outbound discs).


2,000,000 * .8 = $1,600,000 USPS shipping costs per day.

$1,600,000 per day * 261 days = $417,600,000 in USPS shipping costs per year.

Netflix's 2008 Fiscal Year revenue was 1.364 billion.

$417.6 million / 1.364 billion = 30.6%

That is just about the 1/3 number that Netflix CEO Reed Hastings has repeated says goes to the Post Office (as a percentage of revenue).

This clearly proves that the $.80 roundtrip rate is very close to their actual shipping costs. If you have a data model that counters this, please provide it.

I simply believe in facts and information. Ultimately, ignorance serves no one.

Posting info from the Post Office does not tell us what Netflix pays in shipping. Reading how Netflix specifically cites First Class postage rates and how it impacts their business is key. So is data analysis.



The Post Office has reported that they ship approximately 2 million DVDs out from Netflix a day.



http://www.usps.com/communications/pccinsider/2009/pcc_0519se.htm

Netflix ships First Class mail. Their CEO has repeatedly stated that 1/3 of subscriber revenue goes to the post office.



http://www.hackingnetflix.com/2009/04/hollywood-reporter-interviews-netflix-ceo-reed-hastings.html


Let's assume that Netflix ships 261 days a year (Monday-Friday) and not factor in holidays.

2,000,000 DVDs sent out a day. Assume the same number (on average) are returned a day. Let's use the roundtrip rate of $.80 (that factors in their discount for bundling the outbound discs).


2,000,000 * .8 = $1,600,000 USPS shipping costs per day.

$1,600,000 per day * 261 days = $417,600,000 in USPS shipping costs per year.

Netflix's 2008 Fiscal Year revenue was 1.364 billion.

$417.6 million / 1.364 billion = 30.6%

That is just about the 1/3 number that Netflix CEO Reed Hastings has repeated says goes to the Post Office (as a percentage of revenue).

This clearly proves that the $.80 roundtrip rate is very close to their actual shipping costs. If you have a data model that counters this, please provide it.

You are over simplifying the numbers/percentages to justify your claims without taking into account operating & material costs to run their business.
By using your 33/33/33 percentage breakdown of their revenue, it's like you are saying the people who work for Netflix do it for free as well as any equipment/materials needed to run their business.
We all know operating & equipment/material costs to run a business is not cheap/free & should be part of the equation.

You are over simplifying the numbers/percentages to justify your claims without taking into account operating & material costs to run their business.
By using your 33/33/33 percentage breakdown of their revenue, it's like you are saying the people who work for Netflix do it for free as well as any equipment/materials needed to run their business.
We all know operating & equipment/material costs to run a business is not cheap/free & should be part of the equation.

I am not using it to describe their entire business, just the small piece we have been discussing here (namely USPS postage rates). How Netflix manages their third of the revenue to manage operations is irrelevant to the topic.

If you notice, Netflix CEO Reed Hastings is very clear to state that 1/3 of the revenue goes to the USPS, and not 1/3 goes to shipping. That distinction is made clear to show that other packaging costs (material and labor) is NOT included in that 1/3 that goes to the USPS.

My data is very clear. If you have any data model that supports a different pricing structure (taking into account analyst statements, Netflix financial statements and statements made by Netflix executives), please feel free to post them.

Now we're arguing about how much Netflix/BB Online pays for shipping. Are we ever going to get back to the topic?

now I remember why I stopped posting in this part of the forum. so much spin.

Think about it. Bluray came out 3 years ago. So now they are predicting what will happen in 3 years....

Would we accurately be able to predict what role the US will have in the world in 2200?

Especially in the times that we are in, using past data of similar models is simply irrelevant... and mostly wishful thinking by those that have an agenda to push.

I hope it does. It would really drive down my costs for bluray purchases.

Now we're arguing about how much Netflix/BB Online pays for shipping. Are we ever going to get back to the topic?

Yes, because there is a direct correlation between Netflix shipping and Blu-ray’s market share in 2012. It all has to do with Netflix raising BD prices in order to subsidize their streaming service, and also how they are forcing giant CE makers to support Netflix on their BD players (with pictures of CEO’s wives and stuff like that). If you ask Oliver Stone, he has more details.:D

Now we're arguing about how much Netflix/BB Online pays for shipping. Are we ever going to get back to the topic?

I am as shocked as anyone how long these side conversations have gone.

You would think people would look at the facts and say "Oh.. I did not know that. I guess I was wrong." Instead they want to hold onto their original assertion even though they obviously did not have the proper data when they made their original statement.

I feel somewhat that things have gone so far off-topic, but it really is an interesting case study on how people look for information to support their ideas, rather than using information and knowledge to form opinion.

I did not see any permit number in you picture. I do not know the rules regarding the printing of the permit number on the envelope, do you? Do you know of any USPS Reply Mail that is not Business Mail? If so, can you provide a link? How do you explain the discrepancy between your picture and the one posted by bt12483?

It should be clear to anyone that Blockbuster and Netflix are using USPS First Class BRM. What we don’t know is the exact rate paid. IMO, they are paying less than the amount shown by bt12483 (highlighted in Red) because of the very high volume.

It makes one want to http://forum.blu-ray.com/images/smilies/imported/banghead.gif because we have been down this road several times. Some people never learn!!

Ye gads.

Blockbuster and Netflix are not paying the standard consumer first class rates. Its only in their filings as a benchmark reference. With all the drop in unit volume, the USPS is happy to have them as a major customer.

now I remember why I stopped posting in this part of the forum. so much spin.

Think about it. Bluray came out 3 years ago. So now they are predicting what will happen in 3 years....

Would we accurately be able to predict what role the US will have in the world in 2200?

Especially in the times that we are in, using past data of similar models is simply irrelevant... and mostly wishful thinking by those that have an agenda to push.

I hope it does. It would really drive down my costs for bluray purchases.

Things can change extremely fast. We went from Sony saying the HDM war may be a stalemate, to a Blu-ray victory in just a couple months. Some new technology could take the world by storm or a whole slew of other things could happen in that 3 year time frame.

I did not see any permit number in you picture. I do not know the rules regarding the printing of the permit number on the envelope, do you? Do you know of any USPS Reply Mail that is not Business Mail? If so, can you provide a link? How do you explain the discrepancy between your picture and the one posted by bt12483?

That's correct... there is no permit number.
I do not know the "rules' either. Apparently, neither do you.
No I don't, but it does not state "business" as posted in the previous example.
No... I cannot provide a link nor can I explain the "discrepency". All I do know is that "MY" return mailer is not printed to denote "business". I do know that when I return a DVD, they get it and send a new one that's in my queue.

Can you explain it, because apparently there is a difference. MAybe it differs by area for cost effectiveness.

How much does a Netflix mailer with a disc weigh?I do not know the amount for Netflix. A Blockbuster mailer, as received, weighs 1oz. The return weight would be even less. The BD disc weighs 0.6 oz. and the mailer with the sleeve weighs 0.4 oz. These readings were taken on a PitneyBowes (http://www.pitneyworks.com/meter/indexNT.cfm?ml=W0908K0000Q57A&mktpgm=DAAAARA0SC). A BD, sleeve and two #10 common envelopes (24# bond paper) weighs 1oz.

I did not see any permit number in you picture. I do not know the rules regarding the printing of the permit number on the envelope, do you? Do you know of any USPS Reply Mail that is not Business Mail? If so, can you provide a link? How do you explain the discrepancy between your picture and the one posted by bt12483?

It should be clear to anyone that Blockbuster and Netflix are using USPS First Class BRM. What we don’t know is the exact rate paid. IMO, they are paying less than the amount shown by bt12483 (highlighted in Red) because of the very high volume.

It makes one want to http://forum.blu-ray.com/images/smilies/imported/banghead.gif because we have been down this road several times. Some people never learn!!

Link to another discussion on the topic

http://community.netflix.com/forum/topics/just-how-much-does-it-cost-to

Reply by Alan-Not So Nice Not So Helpful on January 6, 2009 at 3:14pm
Yeah. I'm one of those bulk mailers you're referring to. :-)

"I've asked the employees at the BMAU in Oxnard, CA (which is one of the distributing cities for Netflix) and they told me that Netflix pays single piece first class. I have no reasons to doubt them."

They get a discount. Note that rates have increased, such as the non-machinable surcharge.

Regarding pricing, PRM DVD mailers present their mailings
at a business mail entry unit, and most pay First-Class
presort automation letter rates for outbound mailpieces.
Postage for the return envelopes is prepaid at full First-
Class Mail rates and is collected when the outbound pieces
are mailed. Mailpieces that fail one or more of the
nonmachinable criteria in the Domestic Mail Manual (DMM)
are assessed a nonmachinable surcharge of $0.17 per
piece.

http://www.uspsoig.gov/FOIA_files/MS-AR-08-001.pdf

Either you believe those guys or not :)

Can you explain it, because apparently there is a difference. MAybe it differs by area for cost effectiveness.No, I can not. Some entities that does mail-out billing will include postage paid return envelope and most of the time will include their permit number. What I do know is that Blockbuster clearly shows what they are using. I find it hard to believe that Netflix would pay-out much more per piece than Blockbuster.

Either you believe those guys or not :)

And if you don't believe them, just look at the data:



The Post Office has reported that they ship approximately 2 million DVDs out from Netflix a day.

Another customer success highlighted during the session was Netflix, which mails about 2 million DVDs each day — exclusively with the Postal Service.

http://www.usps.com/communications/pccinsider/2009/pcc_0519se.htm

Netflix ships First Class mail. Their CEO has repeatedly stated that 1/3 of subscriber revenue goes to the post office.

Hastings: No. In streaming, anyone can do the mechanics of it. It'd be a very competitive market. The difference is in the DVD world, of all our revenue -- a third of it goes to studios, a third of it goes to the post office and a third is for us. The gross margin is about 33%. In streaming, two-thirds will go to the studio, the post office will get none, and we'll get a third.

http://www.hackingnetflix.com/2009/04/hollywood-reporter-interviews-netflix-ceo-reed-hastings.html


Let's assume that Netflix ships 261 days a year (Monday-Friday) and not factor in holidays.

2,000,000 DVDs sent out a day. Assume the same number (on average) are returned a day. Let's use the roundtrip rate of $.80 (that factors in their discount for bundling the outbound discs).


2,000,000 * .8 = $1,600,000 USPS shipping costs per day.

$1,600,000 per day * 261 days = $417,600,000 in USPS shipping costs per year.

Netflix's 2008 Fiscal Year revenue was 1.364 billion.

$417.6 million / 1.364 billion = 30.6%

That is just about the 1/3 number that Netflix CEO Reed Hastings has repeated says goes to the Post Office (as a percentage of revenue).

This clearly proves that the $.80 roundtrip rate is very close to their actual shipping costs. If you have a data model that counters this, please provide it.

The studios are the ones making out pretty well IMHO. Netflix has to pay for the movies on DVD, Blu-Ray and for streaming. Not a bad deal for them when you think about it.

To Wendell:
Unless you work for NetFlix or the USPS and have a definitive answer... perhaps you could be less confrontational. ;)

Either you believe those guys or not :)Either you believe the USPS or not

High-Volume QBRM—
Annual permit fee ($185.00) and a BRM annual account maintenance fee ($585.00) and separate quarterly fee of $1,925.00. Mailers can pay quarterly fee for any consecutive 3-calendar-month period.

Per piece charge $0.007 plus lower QBRM automation First-Class Mail postage price. Paid through an advanced deposit account.

Best suited if return volume is approximately 42,778 pieces or more quarterly.

The studios are the ones making out pretty well IMHO. Netflix has to pay for the movies on DVD, Blu-Ray and for streaming. Not a bad deal for them when you think about it.

Without a doubt!

Right now I believe that Netflix is trying to convince them of the benefits of single licensing (and revenue sharing), with the idea that it is beneficial to the studios to support a model that will catch the public's attention before kiosks totally devalue the prices of new releases.