Aren't Universal and Paramount Doing Fine?

[cdmoran]

looking at the 80/20 studio sales misses one key factor. With the low HDDVD sales the hardware manufactures will not have enough volume to continue to manyfacture and sell the players, so over time theire will be fewer and fewer players for the HDDVD and their sales will slip. Consumers do not want to have to buy two different players for what is essentually the same product. They will buy hte one that gives them the most and suffer without the other.

[Denzelio]

Toshiba's latest announcement will be aslong as Universal and Paramount are still with us that “While we're disappointed by today and every other days events, it is still extremely early to spot which format will eventually win."

[seto]

It's like comparing being a big fish in the small pond or the little fish in the ocean. Up to a certain point would there be an advantage to being the big fish in the small pond but as soon as the fish is as big as the pond that is all the potential profit you are going to get. Problem is that the pond isn't growing any bigger.

Let's say Warner drops HD DVD and with current sales trends HD DVD makes up 15% of the market (best case scenario). Let's split it evenly amongst the two remaining major HD DVD supporting studios Paramount and Universal. Thats 7.5% of the potential market. Let's look at the remaing portion of the HiDef market. You have 85% of the HiDef home media market spread amongst many studios but the only big fish in that pond that compete with Universal and Paramount are Warner Brothers, Buena Vista, 20th Centruy Fox, Sony Pictures, and New Line Cinema. All the other studios have much smaller shares of those markets. If they jumped into Blu-ray production the initial costs would hurt Universal. However, since Paramount already invested in that technology jumping back in would not be a significant factor or cost. Their captures of the market share would be be pretty significant.

By jumping to the Blu-ray pond it also signifies the utter and complete loss of HD DVD. This will spark a new growth in consumer base. It all comes down to profit by margins. Sure, they may own 100% of the HD DVD but is that 100% as profitable as owning 15% in Blu-ray?

[Sporty]

Already been pointed out, but...

HD-DVD isn't been doing as well as %20 right now.

Warner takes the lion share of HD-DVD software sales currently, so even when Warner stops HD-DVD releases Batman Begins, 300 and Planet Earth will probably sell more then nearly all Paramount/Universal releases other then first week sales.

Ignoring Warner, indie releases are higher then Paramount/Universal and Dreamworks releases. Most of those Indie releases are on both formats.

Major releases raise sales on the format's. So BD has more major releases coming which will raise BD media sales, nearly ever week. HD-DVD might get a small bump for Beowulf, American Gangster but a lot of weeks they have nothing exciting coming, that will depress media sales for that format even more.

So saying 2 studios selling on a format that gets ~20% is doing OK then you really have to ignore that neither of those studios are releasing in full force, neither are taking the bulk of the sales, and they are selling to a smaller and smaller install base (comparatively) every week.

If you look at the sales numbers, BD releases typically sell at higher volume, which is why staying HD-DVD isn't 'cornering' the market to themselves, but cutting off the bulk of their HDM sales.

[sj001]

Even if Universal & Paramount COULD theoretically have 20% or so of the market, which they have less of lately, even WITH WB, this will drop off rapidly as people migrate to Blu-ray. Retailers dropping the format, phasing it out, and putting it in clearance bins will just sound alarm bells for any average person browsing. They will not be able to hold out much longer.

[SGRSBSKIER]

Universal and Paramount/DW are suppose to make up 30% of the HDM market. Since the WB announcement HDDVD has not made up more the 17% and that includes WB which makes up 20% of the HDM market. At the moment BD has about 70% of available movies and HDDVD has 50% (which in June they will have 30% actually more due to left over WB titles).

But WB makes up 40% of HDDVD, and if WB makes up 40% of HDDVD sales Universal and Paramount/Dreamworks has been making up less than 10% combined the past 2 weeks. So Universal and Paramount/Dreamworks makes up 30% of the HDM market title wise but sales are around 10% the past 2 weeks, which is about half of what they had SI before the start of the year and 45% of what they had last year. (those numbers assume that HDDVD studios sells equal to their studio market share WB 40% and Universal/Paramount/Dreamworks 60%)

[Chaka]

Originally Posted by SGRSBSKIER

Universal and Paramount/DW are suppose to make up 30% of the HDM market. Since the WB announcement HDDVD has not made up more the 17% and that includes WB which makes up 20% of the HDM market. At the moment BD has about 70% of available movies and HDDVD has 50% (which in June they will have 30% actually more due to left over WB titles).

But WB makes up 40% of HDDVD, and if WB makes up 40% of HDDVD sales Universal and Paramount/Dreamworks has been making up less than 10% combined the past 2 weeks. So Universal and Paramount/Dreamworks makes up 30% of the HDM market title wise but sales are around 10% the past 2 weeks, which is about half of what they had SI before the start of the year and 45% of what they had last year. (those numbers assume that HDDVD studios sells equal to their studio market share WB 40% and Universal/Paramount/Dreamworks 60%)

What are the words coming out of your mouth?

[Blu-Dog]

Originally Posted by Slapper

If by "fine" you really mean "frantic", then yes, they're fine.

The good ship HD DVD has sunk. Fortunately Universal and Paramount remembered their Blu lifevests and bailed out. All they have to do now is make it back to shore. They're a little miserable being out in the cold and alone, but they'll be ok. Hey, I think I can see them coming over the horizon right now...

That crowd behind them with the torches and pitchforks are the stockholders.

[Maxell]

Warner probably accounts for most of the 20%-ish. And hddvd doesn't have a decent new release until maybe Beowulf on Feb 26, while Blu-ray is getting new decent releases every week. "Now available in DVD and Blu-Ray high Def".

[Giyomu]

20% sale just with uni & para is just a nice score isn t it??
we need these 20% !

[NutsAboutPS3]

Originally Posted by swivel

I don't think your math is correct. When you look at the 80/20 ratio, that is the ratio of all Hi-Def discs sold.

What I think JasonS meant is that even if Uni/Para had 20% of the current high def market (which they don't), they would still be better off switching to Blu because that would cause more people to adopt high def media, growing the total number of disc sales that they have a 20% share of.

Share of the cake vs size of the cake. All studios available on Blu -> end to customers sitting it out -> bigger cake for everyone.

[SGRSBSKIER]

Originally Posted by Chaka

What are the words coming out of your mouth?

WB has 20% of the titles available.
At the moment 50% of titles are on HDDVD. Universal/Paramount/Dreamworks makes up 30%. WB titles account for 40% of all HDDVD titles. If WB sales ratio for HDDVD are the same as their title ratio, 40% of HDDVD sales belong to WB.
Going by the past 2 weeks HDDVD had around 16%.
40% of 16 is 6.4.
So WB HDDVD probably accounted for 6.4% of sales past 2 weeks.
that leaves Universal/Paramount/Dreamworks making up 9.6% of the sales the past 2 weeks.
So Universal/Paramount/Dreamworks make up 30% of all titles available on HDM but the past 2 weeks accounted for less than 10% of the sales.

Is that easier to understand?

[swivel]

Thanks for your responses. (aside from the idiot who called me a troll, of course)

I'm just ready for this format war to be over with. I want to start building a library of Hi-Def movies, but am not willing to take any risk, no matter how small, before I get started.

I think the studios probably don't realize how many people there are like me out there who are fed up with this nonsense. From my reading of the history of the formats, I blame Toshiba quite a lot. It sounds like there was a good standard set, but since they were the chair of the commission, and couldn't get their way on HDi (vs Java), they bolted.

I see a lot of Sony haters, but clearly Toshiba caused this entire mess. I am glad that things look bad for them right now. I don't normally care enough to boycott a brand, but it will be a long time before I even look at something labeled Toshiba.

What kills me is that Blu-Ray is backed by a consortium, and has many CE manufacturers, but the press talks about them as if Sony "owns" the format. Meanwhile, there were only two CE manufacturers behind HD-DVD, and Toshiba is the one with a stranglehold on the tech. I don't get it.

[w_tanoto]

warner has released 125+ titles, while para only have 30+
so, the conclusion is that they are not doing very well, considering the number still includes warner

[Jiffylush]

By moving from HD DVD to Blu-ray they will more than double the market for their product instantly, and it will lead to increased adoption which will increase the market exponentially.

[Blu-Ray Buckeye]

Originally Posted by swivel

If the movie sell rate stays at 80/20, doesn't that mean that Universal and Paramount are doing just as well as everyone else?

If they account for 20% of the films, and also account for 20% of the sales, that means they are selling the same number of films as each Blu-Ray studio (averaged, of course).

So, while HD-DVD looks like it is losing, all of the studios are selling an appropriate percentage. Of course, Warner is still factored in, so this argument will only hold water if Uni and Para pick up the slack after Warner halts production.

Bad facts and bad math... solid work.

[Grisle]

This is stupid...no they're not doing fine and your math was lame.

[mystiksuicide]

Originally Posted by swivel

If the movie sell rate stays at 80/20, doesn't that mean that Universal and Paramount are doing just as well as everyone else?

If they account for 20% of the films, and also account for 20% of the sales, that means they are selling the same number of films as each Blu-Ray studio (averaged, of course).

So, while HD-DVD looks like it is losing, all of the studios are selling an appropriate percentage. Of course, Warner is still factored in, so this argument will only hold water if Uni and Para pick up the slack after Warner halts production.

I think your falling into the "fuzzy math." Remember that the vast majority of stand alone being sold now are blu-ray. Even if you fall for that idiotic PS3 are not sold as blu-ray players BS, the overwhelming amount of units are blu-ray. That 20% includes WB but will continue to shrink due to the fact the number of players are decreasing in percentages.

In other words that 20% percent means Universal and Paramount is having they're asses served to them on a blu-platter.

[davidPS3]

Interesting topic. But the fact remains that this war will be over by summer. Look at studio support, retailer support and customer support and everything in between. There is nothing and I mean nothing that HD DVD can do to change the outcome here.

Everyday brings more good news to the blu team. Just look at the annoucements from various segments of the business.

[swivel]

Originally Posted by mystiksuicide

I think your falling into the "fuzzy math." Remember that the vast majority of stand alone being sold now are blu-ray. Even if you fall for that idiotic PS3 are not sold as blu-ray players BS, the overwhelming amount of units are blu-ray. That 20% includes WB but will continue to shrink due to the fact the number of players are decreasing in percentages.

In other words that 20% percent means Universal and Paramount is having they're asses served to them on a blu-platter.

Wrong. As long as hardware sales stay 80:20 as well, they could keep the same market share as everyone else. And hardware sales are actually higher than that (ignoring the PS3, which I agree, is silly).