Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

[Fixter]

So I have spent most of my adult life being a videofile, stretching back to Laserdisc when I was in college, and if I really look at all the times I have paid for new versions of a movie in a different format it makes me kind of want to throw up.

Sad or crazy depending on how you look at it, I actually thew 600+ laser discs in a dumpster because I couldn't even give them away. So now I sit with 1000+ Dvd's and 600+ Blu-rays and ugh..too many Hd-DVD's and have waited on the side lines continuing to buy blu's. The D2D for $1 or $2.50 to me is an awesome deal and has forced my hand to move to the cloud but there are a few things that bother me, and maybe some have been said before, but I am curious as woo what others who have been doing this longer think.

1. Pricing- the $2-$ fee for conversion to digital is great and I am willing to pay that on any of the discs I have, however when I say to myself that I will no longer acquire discs of any kind (storage has been my nemesis from the early days lol) because now I can finally just enjoy the content.

But I have a concern when I see pricing of an online only version like the Oz bundle coming in at over $30. When I buy a disc of any kind, in general I am getting so much more than what I am getting online. Even simple stuff like trailers, captioning (which I use) and commentary (which I used to use but haven't in so many years it doesn't matter that much.) So I am really looking at paying SIGNIFICANTLY more if I go digital only because my cost is really the feature film in most cases.

At the D2D price this is acceptable because I can still keep my disc if I like. But on a straight purchase I expect more value because the cost of the format is so much cheaper. There are no manufacturing, printing or wholesale distribution costs involved here. We are talking about digital file delivery to the distributor like VUDU/UV and then the ongoing costs associated with maintaining the servers that are doing all the work. I know that right now this is a free service, but I am smart enough to know that at some point my large collection is going to have an annual cost to me to keep. In addition the purchase of a digital only version of a movie is much better for the studios long term. No disc means no used market, we all know that the used market is something that bugs the people with the digital rights. They only get paid once if that disc is resold 10 times.

I have to think the people in charge know all of this, but as someone who wants this to be the answer I have waited on for so long to be adapted by the masses make it make more financial sense to buy electronic and stream than to buy the disc.

2. D2D - for the studios we know really are not going to buy into this (i.e. Disney)I offer this suggestion- let me convert my discs for a reasonable fee as we do now but in true apples to apples- give me all the features/ extras I have now and then make me send in my discs for you to destroy, keeping me from paying the fee and the dumping my collection on the used market. Then when a new better format like 4k become available to stream give me a window to upgrade that for the same nominal fee. I'll keep paying the fee on the ones I want to up convert and you keep control of your content. Seems like we'd all get what we want.

Stepping down off my soap box now...

[Walter-S_North_Carolina]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

At the D2D price this is acceptable because I can still keep my disc if I like. But on a straight purchase I expect more value because the cost of the format is so much cheaper.

Mr. Fixter.

Hello. Welcome. I will give you my view for your consideration.

The value you are attempting to quantify from an EST (electronic sell through) purchase I think can be made in this way.

Principally, you are paying a premium in most cases (sometimes a lateral cost to packaged media) for EST due to the feature of convenience. This is the same as a bag of potato chips in a convenience store costing 30% more then the same bag in the back lot warehouse club when bought in bulk.

In this case, the convenience store is at your fingertips.

Further, the idea of a redundant array storage network housing my entertainment titles on a platform I as a consumer would never even be able to dream to afford is too a feature which is worthy of note.

Some people enjoy searching for titles to buy on packaged media and then do a D2D conversion on them in order to save a few dollars compared to the EST method.

In my view, the convenience of pressing my remote twice and saving the effort is worth the few dollars delta.

That is just my view though.

-Walter

[Woodoo4Vudu]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

I know that right now this is a free service, but I am smart enough to know that at some point my large collection is going to have an annual cost to me to keep.

[Fixter]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

Walter,

I don't disagree with most of your assertions, including the "few dollars more." My concern really comes from the idea that I think that there is a sense that this is a premium (ultimate convenience) and that dictates more value thus more cost to the consumer.

Wide spread adoption of technology usually drive prices down as the cost of manufacturing falls and more competitors enter the mark space, as well as the legacy or previous iteration of that technology will fall in price. Like LCD vs LED TV's and now 1080p vs 4k.

While this is a technological advance and leaves legacy technology available it is not the same as when Blu-ray first emerged where you have two physical product that other than technology still have to get to market in the same way and the better technology can justify the higher cost for R&D of new technology.

So a movie with much much lower deliver to market cost means more profit to the studios. And lets face it, the cost for this system for me to have 1 movie in my database of 1000 is the same because we are all accessing the same set of files. So I am no taking up any more storage than the amount of data to track who I am , what I own, etc. It's genius and simple and its what we all have dreamed of and you are right could never afford. But that doesn't mean that I want to lose the ability to buy more movies at an affordable price than a few at a premium for convenience.

And I like the chips analogy, it's great but isn't the reason of the cost being much higher per ounce not just the convenience but the incremental costs of production, packaging, distribution, shelf space etc for that smaller portion controlled package that makes us shell out 50 cents an ounce for Doritos? Or worse yet bottled tap water?

I just feel like no matter how convenient it makes it, if the costs to the vendor have been so greatly reduced which is only true like this in the digital world. If you look at this article about Netflix and stream costs, http://gigaom.com/2010/07/29/the-rea...the-bandwidth/ it seems to me that the studios are going to charge us whatever we are willing to pay and right now I don't want them thinking I will give it all up and spend too much extra for just convenience alone.

All this being said, I live the concept, convenience and I am hooked and I hope that the folks at VUDU, who seem so responsive to a lot of posts, continue to help push for better product from the studio and don't just take whatever we can get. I am just so glad I am not stuck with iTunes for my movie watching......

[MaxH]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

The real problem is that the studios set the prices, and they see EST (and thank you for defining that, Walter, as I had seen that used for VOD before buy hadn't seen an explanation) as taking away from their DVD/Blu-ray sales unless they can actually make more money on the EST.

I'm hoping that the Apple ebook price fixing lawsuit will discourage the agency model that seems to be the only way EST is sold today...but I'm not holding my breath. Still, it's encouraging that the DOJ is going after them for price fixing. Eventually I hope that Vudu simply pays "wholesale" prices for digital content and gets to determine what price it actually charges the end user.

[Walter-S_North_Carolina]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

...if the costs to the vendor...

I think it is important to define who the "Vendor" is in this case.

Vudu is an EST / iVoD vendor. They sell to the consumer market. M-Go is the same. Amazon Instant Video another and of course iTunes is the Sears Roebuck of the digital market space.

These vendors all seem to charge very close to the same price for titles.

We do not know the details concerning the licensing.

I personally suspect it is similar to Cable and Satellite PPV where they pay for the number of simultaneous views.

At one point for a new release they may suspect they will need 500 and buy that for 3 months and then change it to 100 and then to 25 as the popularity fades over the coming subsequent months and then come to some resting point for an archived title around 10.

These can all be bundled together and worked out with individual studios for a wide variety of deals. Also, this is just speculation on my part. I do not actually have any knowledge on how this licensing works, but think I may be right.

The point I am making is since all the iVoD vendors charge about the same, we can assume it is the studios who are fixing the price and do so, as you suggest, dependent on what they feel the market will bear. In this sense, the "Vendor" is the studio, not Vudu.

IMHO, you can not fault a studio for charging what they feel the market will bear. We live in a form of free market and they produce a product which if the consumers feel is of good quality, should result in an operating profit for them. I do not fault them for finding a method for increasing their profit from the utilization of technical means.

I work in technology. All day long I think of ways of using technology to improve the operating expenses of my employer so they too can enjoy a larger profit from the products they offer.

[MGmirkin]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

In my view, the convenience of pressing my remote twice and saving the effort is worth the few dollars delta.

That is just my view though.

-Walter

The studios must LOVE you...

I couldn't disagree more.

Currently, Digital-only sales are utterly and completely overpriced. Storage, maintenance & delivery costs are trending toward zero (as storage and bandwidth go up and prices go down), as all such things tend to. And once "produced" and "uploaded" there's basically no further "production cost" (physical media, cases, slip covers, artwork, etc.). So, over time, for the same title, "production cost trends towrd zero in the digital environment too."

However, the "price" for digital movies and TV is currently set in the tens or twenties of dollars. The same as a physical media counterpart. Except that you get NO FEATURES (usually, though it seems like that might be changing slightly, as I've seen some "special feature bundles" for new movies on the site in the last few months, which is kinda' net I guess, though whether competitive with the "features" on physical media, I don't know).

I find the current pricing schemes to be just that, "schemes." Behind-closed-door dealings and either monopolisitc or oligopolistic arm-twisting by the studios to keep prices set artificially high and squeeze out price competition. In my opinion, this is pretty bad for the consumer 'cause there's little or no downward price pressures of: competing vendors, "sales," "used" markets, etc.

Personally, I think the price of digital-only needs to come down, and that studios need to adopt a new strategy. Rather than re-charging us through the nose from the SAME titles over and over again, or artificially inflating the prices of digital-only releases. They should opt for going the other way. They should really take a cue from the video game industry and trend toward "micro-transactions." And I do mean micro. Price stuff "affordably." Don't make it into an "expensive status symbol." Make it ubiquitous. Rather than wringing out every last dime for a given title, reduce the price and encourage people to buy in bulk. In the end, you'd most likely get more buy-in as people see the "value" and thus make up for up-front price losses in the overall bulk of sales. Whether you sell 1,000,000 things at $5 each or 500,000 at $10 each, you've still wrung out the same $5,000,000 from your customers' pockets. But, if one looks at it from the customer's perspective in terms of "perceived value" and "satisfaction." I'm thinking you'll have a happier customer base if they're receiving better perceived value, and they'll tend to buy MORE on account of said perceived "value."

As others have said, heck yeah, the disc2digital program costs of $2-5 is a great deal and I'm happy for it. IF actual prices were commensurate (for barebones-only releases), I'd buy things all day long. But if studios want me to pay "retail" prices for their digital products, they're crazy, at present because they don't present the same value. Why would I pay MORE for something with LESS FEATURES? Just because it's easier to press "buy now" on a remote? HARDLY. If a DISC has NO special features, I'm not going to pay the same prices for it as a fully loaded "special edition." That's just a straight fact. As I currently see it, the digital-only option is basically a "barebones" release. Yes, there's a fractional "convenience factor." But once that "ooh ahh, this is easy!" honeymoon phase wears off (pretty quickly), it becomes a numbers game again... $20-25 is just TOO high. $7-10 is about right for older "catalog" titles. I figure around $15 might be okay for "new releases." We're talking "barebones" here. If they want to increase the value, they need to actually GIVE US value. Special features, etc. etc. Something equivalent to what we get if we just buy a straight up BLu/DVD currently.

And frankly, most Blu/DVD ARE CHEAPER {!} than their digital counterparts, and with more features. And these days they're starting to COME WITH the UV digital copy as part of the package. So, again, I renew my question, why should I have to PAY MORE to GET LESS? Why should I buy a digital copy and NOT GET the Blu+DVD that I could get at the physical brick & mortar store in addition to the UV redemption code? To me, it doesn't make sense. It's like saying "you can buy this Blu-Ray+DVD+UV combo for $20" or "you can JUST buy this digital-only copy, but we're still going to charge you $20." How is THAT right? It's kind of like saying, "we'll sell you a 1-pack at a 3-pack price." NO... If it usually comes in a 3-pack and I'm only getting 1, I should only be paying for 1. One could almost use the analogy of going to a bar. The cost of living in a bar is higher the second you walk in the door. They'll sell you a shot for what you could go down the street and buy a bottle from a liquor store for. It feels a bit like that's what the studios are trying to do and convince you they're not doing it. Really, they are... They'd love to be able to charge you more and give you less for it, just like the 200% markup on bar food & drink. It's kinda 'crazy.

Just my opinion. Sorry for the soapbox... I'm just not feeling the "value" of digital-only. With my "credits" for having been part of Beta, I DID buy some movies. But, I'll be honest, I looked for the CHEAPEST ones, the ones that were "on sale." Thankfully there were a few at the time (father's day). The $10 movies felt about right, as far as prices go for digital-only. I just couldn't see may way clear to paying "full retail" for less than what you get when BUYING RETAIL. And I'll probably continue to think that way for the foreseeable future. I'm hoping that as the digital future develops they'll start "adding value" to digital versions. I'm sure it's a pipe dream they'd add value retroactively to existing "barebones" digital-only purchases. Maybe some day there will be an "upgrade" option (cheaply, kind of like D2D?) to convert a "barebones" release to a "full-featured" release?

[MGmirkin]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

These vendors all seem to charge very close to the same price for titles.

We do not know the details concerning the licensing.

The point I am making is since all the iVoD vendors charge about the same, we can assume it is the studios who are fixing the price and do so, as you suggest, dependent on what they feel the market will bear. In this sense, the "Vendor" is the studio, not Vudu.

Imagine that, the Studios collude to artificially inflate the prices rather than allowing the prices to be truly "free market."

Boiled down, that's pretty much my point above. Personally, I think that the artificially inflated prices do not represent the "actual value" of the products, not that they have an inherent value or that there is any kind of "shortage" possible in the movie market space other than an artificially produced one. So, it's not really a supply & demand type market. Supply is manufactured "on demand," really just "replicated." And it's not difficult to replicate digital things. There's a request & the existing "thing" is served up down the digital pipe. It's certainly nothing like gold or helium where there may only be a limited finite supply of it in the entire world.

And again, "digital only" is basically a "barebones" stripped-down product. You get LESS than if you bought the equivalent thing in a brick & mortar store, where you'd ALSO get either the DVD, the Blu or these days probably BOTH... Why should we be artificially forced to PAY MORE and GET LESS simply because it's the whim of the Studio that we should?

[Walter-S_North_Carolina]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

The value of any comodody is set by the invisible hand. Not by the cost of production.

I do concede all your points are valid, save two. Those are small matters though. Since the two of us do otherwise agree, I do not feel it a matter needing to be debated.

The two flaws in your points (minor though they are);

1) you misunderstand herd mentality. If I look out my window one hot afternoon, and see a field full of thirsty people meandering about and I know there is no where to find any lemonade, I can not be faulted for parading out with two or three pictures of glistening lemonade and charging $12.99 per 4 oz cup. This would leave me with a profit of about $12.49 per glass. I am not mother Teresa. If that is what you are looking for, Calcutta.

2) $20 for an HDX EST copy cost less then $30 for a Bluray combo pack.

Otherwise, I do agree with you completely, but in my case, I am afflicted with severe lethargy and find the remote click method suits my tastes, a few dollars more or no.

I do understand you feel differently and I completely respect that.

[ttall]

Re: Thoughts on studios slow to move to UV and pricing (Insert *DISNEY* if you like)

I tried to find away to request MGM titles, but all I found was a number 1-888-223-2369. It was on the MGM site. It is a fox support number, strange!! I asked for MGM disc to digital but I don't know if it goes anywhere past the gut I was talking with.