EST a "nonstarter" -- HMM

[Teazle]

"... EST, for “electronic sellthrough,” remains essentially a nonstarter." -- Thomas K Arnold, para 9 of the story at this link:

http://www.homemediamagazine.com/tks...ling-downloads

[ZoetMB]

Originally Posted by Teazle

"... EST, for “electronic sellthrough,” remains essentially a nonstarter." -- Thomas K Arnold, para 9 of the story at this link:

http://www.homemediamagazine.com/tks...ling-downloads

It doesn't really matter to the industry because a back-catalog stream earns them pretty much the same revenue as a back-catalog DVD.

In general, people did not own VHS, especially at the beginning of its life when a front-line video release cost $90. People do buy DVD, but that's because it became inexpensive and more recently, basically the same price as a rental for back-list and minor titles. J&R, as just one example, has a huge section of 2 for $7 DVD titles and there are plenty of famous movies in there. And many BD titles can now be had for as little as $8.

The demographic who used to rent are now the demographic who stream. Why do they stream instead of buy? Because it's cheaper and because they can. Most of today's movies aren't so great that people want to see them again. They're considered disposable, so people "rent" them and watch them once. This is not rocket science. (The possible exception are children's titles because kids tend to watch their favorites over and over again, plus, a title can be used for the "next kid").

Furthermore there's a psychological factor with virtual media: because they can't hold it in their hands, the average person doesn't feel it's worth anything. This is why people who would never shoplift don't feel guilty illegally downloading. They simply don't perceive a download as real.

IMO, there's no way to turn streamers into downloaders (sale). If they wanted to own, they would have bought the DVD or BD. And there's nothing wrong with people who want to own continuing to buy physical media and those who don't streaming a rental.

[Steedeel]

Too many presumptions Zoet. most people i know watch films more than once. Also, many renters of VHS became collectors, me included. It seems to me (just my opinion of course) that everytime someone brings up a negative about streaming you spring to its defence, yet positive bluray news you seem to throw a spanner in the works. Are you sure you are a bluray fan?

[lazersby]

EST grew 38% last quarter per the DEG entertainment report, so I'm not sure "nonstarter" would be the most apt description.

October 26, 2012
Attached is the DEG’s Third Quarter 2012 Home Entertainment Report compiled by DEG members, tracking sources and retail input.

Overall Consumer Spending Up 1 Percent for the Year

Industry Strengthened by 13% Growth in Blu-ray Disc Sales

Expanding Digital Demand Leads to 38% Surge in EST Spending and
8% Rise in VOD Spending

[Anthony P]

Originally Posted by ZoetMB

It doesn't really matter to the industry because a back-catalog stream earns them pretty much the same revenue as a back-catalog DVD.

In general, people did not own VHS, especially at the beginning of its life when a front-line video release cost $90. People do buy DVD, but that's because it became inexpensive and more recently, basically the same price as a rental for back-list and minor titles. J&R, as just one example, has a huge section of 2 for $7 DVD titles and there are plenty of famous movies in there. And many BD titles can now be had for as little as $8.

The demographic who used to rent are now the demographic who stream. Why do they stream instead of buy? Because it's cheaper and because they can. Most of today's movies aren't so great that people want to see them again. They're considered disposable, so people "rent" them and watch them once. This is not rocket science. (The possible exception are children's titles because kids tend to watch their favorites over and over again, plus, a title can be used for the "next kid").

Furthermore there's a psychological factor with virtual media: because they can't hold it in their hands, the average person doesn't feel it's worth anything. This is why people who would never shoplift don't feel guilty illegally downloading. They simply don't perceive a download as real.

IMO, there's no way to turn streamers into downloaders (sale). If they wanted to own, they would have bought the DVD or BD. And there's nothing wrong with people who want to own continuing to buy physical media and those who don't streaming a rental.

agree with most of what you say, except for one BIG point, and I guess the reason this does matter.

rental does not bring in the revenue or profits that purchasing does. I don't know if the studio makes a few bucks or pennies more with physical over digital or digital over physical. But the studio makes a lot more if someone decides to buy a film instead of renting it. So if EST is a nonstarter that is important point against the argument that digital will replace physical.

[Anthony P]

Originally Posted by lazersby

EST grew 38% last quarter per the DEG entertainment report, so I'm not sure "nonstarter" would be the most apt description.

yes it is (unless you wanted to use something stronger) 38% growth in something that is negligable is still negligible. If you are near or over 50% of the market 38% growth would be a lot. But when starting out 38% is next to no growth and you would expect it to be in the triple digits (for example at such an early stage BD was growing at over 200%). And a big chunk of that 38% growth is probably derived from the promotions such as bring in your physical media and for 5$ you get to keep it and have a Vudu copy. And for YoY the growth was only 27% http://www.degonline.org/pressreleas...L_10.26.12.pdf

[ack_bak]

Arnold makes some good points. I have been saying for years that the push towards digital infrastructure will result in a push towards consumers renting again vs buying. I know for me, part of collecting optical discs is the physical package itself. I do not get the same excitement collecting a bunch of digital movies.

I think the studios are in for a rude awakening as consumers transition to digital and prefer cheap streaming or renting to buying.

[Teazle]

As I interpret it, the piece seems to amount to this:

Many of those people hitting the $5 DVD bargain bins in the "boom" period (esp. c. 2005-6) did so not b/c they wanted to _own_ a film, they just wanted to watch one, and it's cheaper and quicker to buy it for $5 than rent it for $4 and make two extra trips to and from Blockbuster Video.
So late in the DVD era the purchase boom was artificially inflated in the sense that many buyers had no intrinsic interest in owning.

Today this bottom-feeding convenience-oriented segment of the home video market has gone to streaming -- more convenient even than buying at $5, you don't even need to drive to WalMart. And since this price-driven market just wants something quick & cheap to watch once, there's no point in buying the digital product, a rented stream is enough.

EST doesn't seem to fit in anywhere in the home video business at present. HD is well established and people who want to own a copy are usually quality-sensitive enough to get the Blu-ray. The sales figures are continually (& increasingly) bearing this out.

So it's true that there's a partial move away from ownership, esp. on the part of the ppl who had no interest in owning to begin with but did so anyway b/c for a short period it was easiest and cheapest. I'm not sure how interesting that observation is at bottom but there it is.

The real question is, if EST is ever going to start to catch on in the next 10 yrs, why hasn't it happened like 2-3 years ago? It's anachronistic and idle, at this point, to keep saying (like it was 2007) "DLs are just around the corner and once they're technically feasible and everyone is online DLs are going to take over.") Hence the writer calling EST a "nonstarter".

[Steedeel]

I wonder if in a few years time, EST has failed completely and Bluray is approaching it's natural end, we may have a Spotify style service that allows unlimited streaming of movies for a set fee every month. Say 1080p at high bitrates ,720p at decent bit rates and SD for those that do not care (but very solid dvd quality all the same.) If sell through stops working altogether it is hard to see what will happen.

In the mean time i will continue storing my blurays in a bunker ready for such a day!

[Prox]

This guy just doesn't fully understand what makes purchasers purchase a new format. We don't want more apps and log-ins and numerous systems that don't work with each other. We want simplicity and quality. Digital copies currently excel at neither.

[KRW1]

Originally Posted by Steedeel

I wonder if in a few years time, EST has failed completely and Bluray is approaching it's natural end, we may have a Spotify style service that allows unlimited streaming of movies for a set fee every month. Say 1080p at high bitrates ,720p at decent bit rates and SD for those that do not care (but very solid dvd quality all the same.) If sell through stops working altogether it is hard to see what will happen.

In the mean time i will continue storing my blurays in a bunker ready for such a day!

I can't see that happening because studios won't want one provider to have all their product available all the time to everyone who subscribes, so you'll invariably end up missing titles. You can see this now with Netflix/Lovefilm and their exclusives. If you want to see most new releases you have to subscribe to both and a third if you want more obscure/arty releases.

[Steedeel]

Yes, but it is possible one company could eventually get control similar to apple with music several years ago. Unlikely, but possible?

[KRW1]

Originally Posted by Steedeel

Yes, but it is possible one company could eventually get control similar to apple with music several years ago. Unlikely, but possible?

Possible, I suppose and if anyone could do it, it would be apple. I think movies are more complicated, though and even with Itunes, not every band is on there yet.

However, even with music, download isn't the replacement for CD. For example, even though I can buy Wish You Were Here on itunes, why would I when I've just bought the SACD version? So, for me at least, its not even replaced a 'dead' format. It's just a different option, not a replacement.

[Anthony P]

Originally Posted by Prox

This guy just doesn't fully understand what makes purchasers purchase a new format. We don't want more apps and log-ins and numerous systems that don't work with each other. We want simplicity and quality. Digital copies currently excel at neither.

agree

[Anthony P]

Originally Posted by Steedeel

Yes, but it is possible one company could eventually get control similar to apple with music several years ago. Unlikely, but possible?

it is also possible that I am named king of the world. I just don't see it happening, because the movie industry is so different from the music industry. Apple got that control because they sold a sexy little device called the ipod, which they then made it a lot easier to buy titles from them then anywhere else. For home use sexiness is useless and for portables there will always be too many choices. The music and movie industry is also very different because movies have local rights but the movie studios are huge locally. What I mean is that Gladiator is distributed in Europe by Universal but in the US by Paramount, Alliance distributes LOTR.... in Canada while it is WB in the US. The simple reality is that the distributors in each country are different, now it could be that the same "company" has the rights for different places but even then they are run differently (for example Disney UK releases Songs of the south but Disney US/Canada thinks it might have a negative backlash and so they won't release it here. That is why there is Netflix US, Netflix Canda, Netflix UK.... they might all be owned by Netflix, but each one is separate because each market is different and even if there is a film available in all three markets Netflix has to get the local copy (i.e. it would need to pay the company that owns the US, UK and Canadian rights to that movie. Part of this difference between movies and songs is just normal. If I want to listen Ritchie Valens' "La Bamba", it will be in Spanish, but if I want to watch [REC], I don't want it in Spanish since I would not understand what they are saying so I need it either dubbed or subbed. The opposite is true for Hollywood films, in Italy they would need Italian, in Greece it will be Greek and in Spain it will be Spanish and the studio that made the films (especially when they were much smaller) did not have the resources to do the translations in all those markets so they would sell the rights to that movie for that country. The other historic thing is that let's say my parents wanted to buy the new Beetles album, they went to the store and bought it, the store bought X copies from a distributor and paid for them that distributor might have bought Y copies from an importer.... that eventually bought it from the record label. On the other hand what if they went to watch the movie in the theatre (there was no home video back then), in order to get that film every theatre owner will pay a different amount so for the studio that made the film it is much easier to sell the rights to a Canadian distributor that then needs to deal one on one with the different theatres and chains and can handle stuff like "x% of the box office"

So with record labels you have a few big players but mostly weak ones with very long reach. With the movie industry you have very strong players but with very small reach. So it should be much harder since Apple (or anyone else) can’t stranglehold the studios and they would need to do it in every country one at a time.

[Teazle]

Originally Posted by Steedeel

Yes, but it is possible one company could eventually get control similar to apple with music several years ago. Unlikely, but possible?

Hopefully antitrust laws will protect us from this. IMHO Amazon and itunes have too much market share already. Esp. amazon for e-books.