[BrutalBodyShots]

I would think the basic laws of supply and demand would set DVD prices. Most new movie releases on DVD start out at $19.99 which is understandable since people are willing to pay that initially.


What I am looking at however are older movies - and by older I mean essentially anything a year or two past "new release" status, so say 2-20 years old. Is it still supply and demand that sets the prices or is it something more?


You can go back 5-7 years and find brand new DVDs in your local Best Buy, Circuit City, WalMart, etc that range in price from $4.99 - $19.99. It seems that some movies never drop below their $19.99 initial release price, and if they do it is only to $14.99 but often times I don't see these movies as being "good" or "successful" movies at the box office.


One example is the movie Traffic from 2000, which I felt was a great movie and apparantly others did as well as it won 4 Academy Awards - you can pick it up now for $4.99-$6.99 most places. Meanwhile, there are tons of B-movies from around the same time that I've never heard of or have heard are horrible selling for $9.99 or more. Why is that?


I picked up the extreme version or whatever it was called of Terminator 2 the other day (the one in the silver case) for $4.99 as well when you have movies like Point Break and Child's Play 2 from that era selling for twice that at $9.99. I have a hard time believing that there is a higher demand for Child's Play 2 than Terminator 2 today.


Another movie that has held its "value" sort of speak is Casino from 1995. That movie is 12 years old and still selling for $14.99 most places.


What do you guys think? We all know it costs less than a buck for all of these movies to be produced and packaged. Aside from supply and demand what forces do you all feel contribute to DVD pricing?

 

[khyron]



Quote:
Originally Posted by BrutalBodyShots /forum/post/0


I would think the basic laws of supply and demand would set DVD prices.

They do, but I think what you're missing is that since the dawn of time, the profitability of the media publishing business (in almost any entertainment medium) has been all about tweaking the supply and prices to control demand.


Haven't you ever noticed how often music or movies are rereleased with nothing changed but the UPC and maybe the cover art?

(and of course the most evil is Disney and their "vault" concept)

 

[lostsoldier]

DVD pricing is determined by a dolphin in a pool. He points at pictures, which in turn are translated by a sign language speaking gorilla(one of the ones taught by Koko). They consult the dolphin every 6 months, and that's where the pricing comes from.


I got Wall Street at Wally World for $6.99, but Mortal Kombat II kost me $12.99. Go figure.

 

[spyder696969]

lostsoldier,


You're confused. That's from the South Park episode where they tell how Family Guy plotlines are made.

Serously, it's part of a cyclical process. Movies start at premiums, drop for initial sales, rise again to regular retail, then gradually fall until most DVD owners are sated. After that, the prices either stabliize at a set manufacturer price or start to escalate again as the movie grows continually older. There are exceptions, of course, as with Disney and re-released materials, but that's typically how I've seen it happen.

 

[Dean Roddey]

Unless lowering the price is going to cause enough more sales to make up for the lowered price (or unless you just want to dump your stock of them), there doesn't seem to be a lot of incentive to drop the price way down. It's probably not unlike most low volume products I guess. In order to make it even worth selling that low a volume (when it still costs you just as much, or maybe more because of the low volume, to produce it), you charge more than you might otherwise.


That's still the law of supply and demand, just working at the other (low volume) end of the scale.

 

[watchformore]

A sudden price drop on an older title can also be an indication of the impending release of an updated version.

 

[smithb]

My take is that most of the movies you find in the bins from $4.99 - $9.99 aren't the retail prices but the prices the stores decided to discount them. Thus, I don't think it is fluctuation in studios changing retail prices but stores trying to either get buyers in or unload DVDs that aren't selling.

 

[lostsoldier]



Quote:
Originally Posted by spyder696969 /forum/post/0


lostsoldier,

You're confused. That's from the South Park episode where they tell how Family Guy plotlines are made.

Are you serious? I haven't watched South Park since we found out Cartmens mom is Cartmens dad. Good times.


I think what bugs me the most is that retailers pretty much charge what they want. Go to the FYE at my local mall, $19.99 is where DVD's start at. Those same movies can be found at my local Best Buy starting at $9.99 at the Wal-Mart they can be found in the bargain bin starting at $4.99. For the same titles!!!!


During Christmas shopping last year, I found "Wall Street" at Wal-Mart for $4.99. Later that day I was at FYE at the mall, and they were selling it for $15.99. I'm going to bet that if had gone to the local Best Buy, it would have been $9.99.

 

[Dean Roddey]



Quote:
I think what bugs me the most is that retailers pretty much charge what they want. Go to the FYE at my local mall, $19.99 is where DVD's start at. Those same movies can be found at my local Best Buy starting at $9.99 at the Wal-Mart they can be found in the bargain bin starting at $4.99. For the same titles!!!!

That's the way it is with with most products, so I'm not sure why DVDs would be any different. If you want the lowest price, it's your responsibility to find it and go there if you want that price. If they all charged the same thing, that would be collusion.

 

[BrutalBodyShots]

Guys the fact that the same movie can be $6.99, $9.99 and $14.99 at three different stores is not what I'm getting at... it's that at the SAME store you have a decent movie/decent demand title like Terminator 2 selling for half the price as a poor excuse for a movie in Child's Play 2 with little demand.

 

[smithb]

Between Terminator 2 and Child's Play 2, which one do you think the stores ordered more of. It may be as simple as that they went for a higher quantity of Terminator 2 and have more left in stock then a movie like Child's Play 2 that they probably only ordered a few of.


I kept seeing a two disk special edition of the original "Hills Have Eyes" at BB for $29.99. With the remake out I was always interested in how the original was since it seemed to have a following. All of the sudden this past Halloween it was on sale for $6.99 so I picked it up. I'm sure at $29.99 they were probably lucky to sell any and then decided to dump there stock for a big discount.

 

[spyder696969]



Quote:
Originally Posted by lostsoldier /forum/post/0


...Go to the FYE at my local mall, $19.99 is where DVD's start at...

At FYE, penny candy starts at 10 bucks.

I'm shocked they don't charge for breathing their air.

 

[BrutalBodyShots]



Quote:
Originally Posted by smithb /forum/post/0


Between Terminator 2 and Child's Play 2, which one do you think the stores ordered more of. It may be as simple as that they went for a higher quantity of Terminator 2 and have more left in stock then a movie like Child's Play 2 that they probably only ordered a few of.

They obviously ordered more of the one with higher demand, Terminator 2. And being that there is higher demand for that title, I'd expect it to be priced accordingly. I don't have any concrete numbers, but I'd venture to guess that if a store was selling X copies of Child's Play 2 per week they would be selling 15X copies of Terminator 2 per week.

 

[opus123]

It's basically everything Bodyshots just said... Movies are still kinda priced to the old For Sale or For Rental model... with a few exceptions.


If the studio expects that millions can be sold, they price it to move, so that all potential buyers do not percieve an obstacle in making a purchase. This also drives up the number a retail chain orders, and increases the number of impulse purchases.


If a studio doesn't expect many consumers will be willing to buy, they price it just high enough that they maximize profit without preventing/alienating their core consumers/fan-base.


For example.. look at a season of Desperate Housewives versus say.. Forever Knight. Could be anywhere from $50-80 difference in price for 22 hourse of programming. If they priced Desperate Houswives at $100+ they'd sell significantly fewer copies, but if they priced Forever Knight at $30 they wouldn't sell many more than they would at $100+... as the Forver Knight fan base is small but loyal, and those outside that 'base' aren't potential customers.


Then there's Star Trek.. which is just mass-profiteering. Mainly because Trek falls somewhere in between these 2 categories since they do have a very large but (unfortunately overly) loyal base. If they priced the sets more reasonably, they would sell quite a bit more... but i'm guessing the financial modelling simulations show profit maximization at the premium pricing.

And don't get me started on George Lucas and his manipulation of fan loyalty...


Anyway, once this is done... retail chains want to maintain SOME selection, but cater to the vast majority of purchases.. which is on RECENT releases. Since were many years deep in DVD's... space becomes a premium, so they want to clear out old stock. Terminator 2 was probably purchased with a lower wholesale price than Chucky 2.. and they have more T2 on hand... so they price it to sell to clear space. ALSO, with more copies of T2 in circulation.. the pricing needs to be that much more aggressive as most 'buyers' of that title already own it...


I'll shut up now.. sorry.

 

[smithb]



Quote:
Originally Posted by BrutalBodyShots /forum/post/0


They obviously ordered more of the one with higher demand, Terminator 2. And being that there is higher demand for that title, I'd expect it to be priced accordingly. I don't have any concrete numbers, but I'd venture to guess that if a store was selling X copies of Child's Play 2 per week they would be selling 15X copies of Terminator 2 per week.

The point being that the ratio of what they have in stock vs the rate they are selling them may not be favoring as well for Terminator at this point. Without the concrete numbers it is hard to say but based on the pricing I would say that Terminator 2 is no longer selling all that well so it is time to dump the supply.


Remember also that there was a high expectation for Terminator 2 when it came out. Most that really wanted it probably bought it in the first week. While Childs Play 2 is a so-so release and has probably sold in a more evenly paced fashion.


It is fairly common these days to see big budget releases sold by BB in the 2 for $20 after just 6 months because they ordered so many and after the first week of the specials the demand goes down and they are left with the stock.


So it seems pretty common to me at least and a pretty standard practice of supply vs. demand. Especially when you may have a 100 to 1 ratio regarding supply between a blockbuster and a so-so release.

 

[BrutalBodyShots]

Excellent posts above. Thank you.

 

[Sean Nelson]

One of the things to remember is that there's a big difference between how old the movie is (ie, it was shot in 1980) and how long the DVD has been sitting around in the store (ie, the 1980 movie was just released on DVD two weeks ago). The DVD production run and initial "suggested retail price" is based on the studio's guesstimate of how much demand there will be. If they overproduce and/or overprice, the DVDs will sit around in the stores for a long time and at some point the stores will start lowering the price in order to clear out the stock.

 

[ChrisWiggles]

The invisible hand.


Duh.