L.A. Times Article: "Future Of DVD & Blu-ray Distribution" - AVS Forum | Home Theater Discussions And Reviews
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post #1 of 24 Old 01-16-2020, 07:13 PM - Thread Starter
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L.A. Times Article: "Future Of DVD & Blu-ray Distribution"

Remember DVDs? Two studios have a plan to preserve the near-dead format

By RYAN FAUGHNDERSTAFF WRITER
JAN. 15, 2020 11:15 AM

The market for DVD and Blu-ray discs has been on life support for years, as streaming has become the technology of choice for home video customers.

In the last decade, the U.S. market for physical discs has gone from a more than $10-billion business to roughly a third of that in terms of consumer spending, according to data from the Digital Entertainment Group.

But studios aren’t ready to give up just yet. Two major players, Universal Pictures and Warner Bros., have proposed an unusual plan to stay in the business of selling shiny physical discs.

The studios on Wednesday announced a plan to team up on a joint venture that, if approved by regulators, would handle North American distribution for DVDs, Blu-rays and 4K UHD discs for new releases, library titles and television shows. The idea is to combine resources to continue selling discs — while saving money.


The joint venture is expected to operate for up to 10 years, according to a news release.

Details are sparse and the venture won’t launch until the beginning of 2021. The studios did not say what the new entity would be called, or how many would work for it, but the move is expected to coincide with an unspecified number of job cuts in their existing home video divisions.

Industry veteran Eddie Cunningham, president of Universal Pictures Home Entertainment, will oversee the project.

The idea is a direct response to the collapsing DVD market. Physical disc sales plummeted 18% in 2019 alone, generating $3.3 billion in revenue in the U.S., according to DEG’s latest report. Meanwhile, consumer spending on subscription streaming services surged 24% to nearly $16 billion.

Yet physical discs remain important to some consumers, including fans of classic cinema. Not all titles are easily available for streaming. Also, though the category is shrinking, it remains an important source of revenue for the industry.

“The physical business is still an important and active category for the industry,” said Ron Sanders, Warner Bros’ president of worldwide theatrical distribution and home entertainment, in a statement.

The planned joint venture “presents a significant opportunity to continue to work with our retail partners to ensure the format’s strength and sustainability for years to come,” Universal Chief Distribution Officer Peter Levinsohn said.

Additionally, Warner Bros. and Universal plan to save costs by splitting up international DVD releases by country.

Los Angeles-based Universal will take on distribution of Warner Bros. discs in Germany, Austria, Switzerland and Japan, while Burbank-based Warner Bros. will handle Universal’s sales in Britain, Italy, Belgium, the Netherlands and Luxembourg.
https://www.latimes.com/entertainmen...u-ray-business
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post #2 of 24 Old 01-16-2020, 07:20 PM
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Gee, I wouldn't mind being in a dying business if it had $3.3 billion in revenue!! That said the PLAYER market is sure dying.
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post #3 of 24 Old 01-17-2020, 12:17 AM
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It's $3.3 billion and shrinking fast, in a years time you'd be looking at maybe 2 billion. It's like Blockbuster Video back in the late 90s where netflix was just starting. The writings on the wall.

At least the industry sees a way to remain and that the discs will still have niche uses and they want to preserve that. At least for a few more years - the question will be if discs last 10 more years, or become like laserdisc did in the DVD era - a highly expensive niche collector format. By 2025 we may be paying $50 for a movie on Blu Ray as it's now for videophiles or cinephiles. And super special collector sets will be $200 or more.
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post #4 of 24 Old 01-17-2020, 01:20 AM
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Well unfortunately streaming can't touch the picture quality or sound of the physical Blu Ray and 4k Blu Ray is even more ahead. We will lose lossless sound unless these streaming services add it down the road.
We still have live TV streaming services like YTTV and Hulu that do not even offer DD+ 5.1 to live channels that crappy, awful cable has had since the late 90s. Something stinks here.
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post #5 of 24 Old 01-17-2020, 02:07 PM
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Tells me the studios soon foresee a day when they won't be in the physical media business. Let's just hope they are willing to license out their properties when that time comes.
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Blu-ray Picture Quality Tiers (updated through July 13, 2017)
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post #6 of 24 Old 01-17-2020, 04:14 PM - Thread Starter
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Originally Posted by Hetfieldjames View Post
Well unfortunately streaming can't touch the picture quality or sound of the physical Blu Ray and 4k Blu Ray is even more ahead. We will lose lossless sound unless these streaming services add it down the road.
We still have live TV streaming services like YTTV and Hulu that do not even offer DD+ 5.1 to live channels that crappy, awful cable has had since the late 90s. Something stinks here.
exactly, give me a piece of physical media any day over (current) cable-provided streaming capability
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post #7 of 24 Old 01-17-2020, 11:11 PM
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It's $3.3 billion and shrinking fast, in a years time you'd be looking at maybe 2 billion. It's like Blockbuster Video back in the late 90s where netflix was just starting. The writings on the wall.

At least the industry sees a way to remain and that the discs will still have niche uses and they want to preserve that. At least for a few more years - the question will be if discs last 10 more years, or become like laserdisc did in the DVD era - a highly expensive niche collector format. By 2025 we may be paying $50 for a movie on Blu Ray as it's now for videophiles or cinephiles. And super special collector sets will be $200 or more.
It's like vinyl, new discs ain't cheap. Video is running the same course.

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post #8 of 24 Old 01-18-2020, 09:28 AM
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Good that they are trying bad that they are having to.

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post #9 of 24 Old 01-20-2020, 07:51 AM
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Well unfortunately streaming can't touch the picture quality or sound of the physical Blu Ray and 4k Blu Ray is even more ahead. We will lose lossless sound unless these streaming services add it down the road.
Kaleidescape PQ is as good (or better) than disc (4K). Most all titles have lossless sound (DTS, Atmos). But expensive!
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post #10 of 24 Old 01-20-2020, 07:52 AM
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Kaleidescape PQ is as good (or better) than disc (4K). Most all titles have lossless sound (DTS, Atmos). But expensive!
I never heard of it but thanks for the info. Expensive, like how much?
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post #11 of 24 Old 01-20-2020, 08:15 AM
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I never heard of it but thanks for the info. Expensive, like how much?
It is not streaming per se, but a digital download. Files are over 100 GB. Most new releases are 4K HDR but Blu-ray quality is available too.

DTS MA and Atmos. Downloads, I believe, are direct from studios.

Player (essentially a hard drive but a great user interface). Players (6TB) start at m $5K. Movies are $15-$35.

Www.kaleidescape.com

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post #12 of 24 Old 01-20-2020, 08:17 AM
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It is not streaming per se, but a digital download. Files are over 100 GB. Most new releases are 4K HDR but Blu-ray quality is available too.



DTS MA and Atmos. Downloads, I believe, are direct from studios.



Player (essentially a hard drive but a great user interface). Players (6TB) start at m $5K. Movies are $15-$35.



Www.kaleidescape.com
I just checked it out and it's actually not quite as expensive as I thought it'd be. Way out of my league but not totally insane. Sounds really cool though.
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post #13 of 24 Old 01-20-2020, 08:22 AM
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The interface is amazing. Awesome system.
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Goodbye to a great audio and video genius and writer... JOHN GANNON. I enjoyed your friendship, wit and a nice long run we took around Indianapolis at CEDIA years back... and for buying my Runco 980 Ultra years back... you saved my ass! Rest in peace.
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post #14 of 24 Old 01-21-2020, 12:06 PM - Thread Starter
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It is not streaming per se, but a digital download. Files are over 100 GB. Most new releases are 4K HDR but Blu-ray quality is available too.

DTS MA and Atmos. Downloads, I believe, are direct from studios.

Player (essentially a hard drive but a great user interface). Players (6TB) start at m $5K. Movies are $15-$35
I figure this system is used in movie houses?
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post #15 of 24 Old 01-21-2020, 12:15 PM
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I figure this system is used in movie houses?
AFAIK - only for home.

Unfortunately, ,most movie houses don't have PQ this good...

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post #16 of 24 Old 01-21-2020, 03:41 PM
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exactly, give me a piece of physical media any day over (current) cable-provided streaming capability
The trouble, again, is falling into the trap of one-size-fits-all. I'm okay with streaming for most movies, because there's relatively few that I want to own. There's more than booms and bangs. Glad to see there's a couple of studios who agree. Hopefully, Paramount and Columbia, too.

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post #17 of 24 Old 01-21-2020, 09:58 PM - Thread Starter
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The trouble, again, is falling into the trap of one-size-fits-all. I'm okay with streaming for most movies, because there's relatively few that I want to own. There's more than booms and bangs. Glad to see there's a couple of studios who agree. Hopefully, Paramount and Columbia, too.
yeah, as the article notes, one void they're filling are the availability of many classic film titles that are'nt necessarily easily found on NetFlix and other popular streaming sites. I fall right into that category. It's not so bad to pay, on average, say $20.00USD for a random title that you can readily watch any time, right? And if only the industry would re-issue these titles in simple physical packaging- ie. a single thin paper (cardboard) sleeve, like a CD, with a small reduced graphic of the original cover art. There you go........
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post #18 of 24 Old 02-24-2020, 06:38 AM
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On the upside is both the new PlayStation and Xbox coming in the 4th Q this year will have a 4K players in them.
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post #19 of 24 Old 03-05-2020, 07:28 AM
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sensible business decision. if they decided to pass on the savings back to consumers by lowering retail prices, I'm sure the volume sales would go up too.

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post #20 of 24 Old 03-05-2020, 07:37 AM
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Maybe millenials don't consider physical movies to be hipster doofus enough to take seriously like they do with their vinyl. Perhaps their children will revive disc formats when they see the tragic ignorance of how you don't actually own anything when is resides in the cloud somewhere yet you keep spending money on it even when you can't access it.
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post #21 of 24 Old 03-06-2020, 12:17 AM
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Well, given millennials are unable to afford housing, physical discs end up being a boat anchor when moving between rentals. But given retro, well probably see the revival of VHS first. After all, we had vinyl and now cassette is seeing a revival.

But I don't think prices are the main barrier to adoption - streaming is just more convenient when you can pick you movie off a list rather than search your collection and try to find the one you want to watch.
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post #22 of 24 Old 03-06-2020, 10:25 AM
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Redbox is pushing DVD rentals by offering a free additional DVD rental when you rent something. Let's see, I am renting one of the UHD discs so why would I be interested in another movie at DVD resolution, I'll pass.
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post #23 of 24 Old 03-06-2020, 10:53 AM
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this is a standard M&A (M for merger, what this is): instead of two companies staffing 2 separate departments of workers, they figured "synergy" can be created: hypothetically speaking, the amount of work previously performed by 2 separate departments can be done by 1, so they get rid of the other department of workers, pays and benefits and all that. less expense, higher bottom line profit to be shared. this basic approach has nothing to do with increasing top end revenue.


But, if there's more profit to be made/preserved, they have more financial elbow room to play with pricing, to existing customers, and has little to do with converting digital buyers to switch camps.


the logic tree is: 1. do you buy movies on disc? if Yes, then 2. do you buy every movies on disc at full-retail price? (aka "are you a value-purchaser") if No, then there's more top end revenue to be made.


For instance I buy loads of movies on Black Friday, usually the movies I don't feel "too hot" about to get when first released at full-retail, but on Black Friday, at those prices, "hmmm...why the heck not?" that means each one of those products, whether $5.99, $7.99 or $9.99, that's all the life-time value the company will get from me. Though, still better than $0 from me if the product was never on sale at discounted prices.



There are tons of variables, but let's just say a disc already sold plenty at pre-order (who pays those prices anyway?) and the majority at full-retail after launch period, instead of dropping prices to the "regular sales prices" of $18.49 or $15.01 in preceding months, they drop it further to $13 in August. Now I'm more inclined to "hmmm...why the heck not?" and watch the movie now, instead of waiting until the end of year. So the company gets $13 life-time value for that product from me, instead of $10 or $8 (on BF), that's a 20%-30% increase in revenue, not a bad deal on any day.



movies on disc is like any other consumer products, supply and demand curve is fully adjusted by change in prices. if 100 buyers would purchase at $15, but you drop the prices by $2, you lose that $2x100 potential revenue. but also if 200 more consumers are now willing to buy the product at $2 cheaper when otherwise not. you end up with more revenue made up by both higher volume and higher life-time-value.


in practice, all of these require a lot of data to tweak the mathmatics to find the "sweet spots", another benefit of merging 2 separate departments into one: they now have access to 1 bigger pool of consumer data to work with to maximize revenue/profit.


how much volume do discount sales make up the total disc sales? 20% I'm totally guessing. so $600M. if pricing can increase sales by 20%, that's still $120M additional revenue. Does it matter in the grand scene of changing digital tide? No. but at the end of day no one is going to mind any amount of additional revenue at not much more expense.



that's a standard M&A in a nutshell.

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post #24 of 24 Old 03-07-2020, 12:12 PM
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The logic tree is: 1. do you buy movies on disc? if Yes, then 2. do you buy every movies on disc at full-retail price? (aka "are you a value-purchaser") if No, then there's more top end revenue to be made.
For myself, value-purchaser. For gifts, value-purchaser, though not as severe.

I'm surprised anyone pre-orders, since there's the first discount on release date.

Recently, I'm surprised discounts don't come heavier, faster, at more frequent intervals. Seems like a new marketing strategy across numerous product, in attempt to wean the consumer from good sales expectation throughout the year. Big mistake IMO to underplay shopping 'til Black Friday.

I agree with your suspected 20% sales after heavier discounts, only because significant discounts didn't happen fast enough and consumers are turned off or forgotten the product by then.

I'm good at waiting. More often than not, patience pays. In the meantime, the supply chain is losing much money.

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