Physical & Digital EST: The Future of Home Video Discussion Thread

[Anthony P]

Originally Posted by alchav21

I don't like to play the Provider Shuffle, so I balance some with Ads. I know they have to start making a Profit to stay in Business.

This is not OTA where advertisers pay a fixed amount based on assumed market. If ads are not playing on your device(bcause you avoid it because of the ads) the streaming provider is not making any money from ads. On the other as a member they have to pay for the content you are not watching.

You guys try to Support Disc

I don't try and support disks they support me. was I a bit sad when Metro video, Inet video, HMV Canada shut down? Yes (many lost their job, I liked glancing titles that I could do there no more, there was more competition for prices) but I was not prepared to over spend to keep them open. Last month when I was away did I feel a need to go on-line to buy films on disks just for the sake of giving studios my money, even though I new I won't be able to watch them until I got back? No I was happy watching the films that I had packed for my trip.

I'll put my Money on Streaming!

no one is telling you not to do that. I know most of the people that replied to you are also paying for streaming. You have to stop looking at these discussions as some form of ideological crusade.

[Anthony P]

Originally Posted by Vilya

Physical media is profitable, something that most streaming services have yet to accomplish, and that is why discs are still offered in an ever increasing selection of titles despite declining overall sales.

the problem is the comparison does not make sense. Studios spend a lot of money to make content. Physical media, theaters... is a way for them to make that money back to pay for that film they financed. They make BDs that are then sold to retailers, If the retailer makes enough money to pay for rent , wages.... that is a different question and that only involves the retail shop (or rental shop). yes Disney owns Disne+ but Marvel (to not use Disney) makes money when diskstore buys that Marvel BD (that they will sell to me) and marvel makes money when they lend distribution rights to Disney+ for people to watch on streaming. diskstore might lose money because their costs are higher than revenue and Disney+ is definitely hemorrhaging money beause their costs are a lot higher than revenue. But if diskstore or one day disney+ make money it is irrelevant to Marvel since they will just sell/lease content elsewhere if thoe places shut down.

[Anthony P]

Originally Posted by Steedeel

What are you talking about?

I think he thinks average cost for consumer to buy= average cost of studio to make a copy.

[Steedeel]

Originally Posted by Anthony P

I think he thinks average cost for consumer to buy= average cost of studio to make a copy.

I was also baffled about the discs he said I bought. I didn’t.

[Anthony P]

Originally Posted by Steedeel

I was also baffled about the discs he said I bought. I didn’t.

you know Vilya, Steedeel are extremely similar and easy to mix up, they have one letter in common.

[PenguinInfinity]

Originally Posted by Anthony P

I think he thinks average cost for consumer to buy= average cost of studio to make a copy.

The studios are obviously selling everything at cost. It would be wrong of them to try to make a profit.

[alchav21]

Originally Posted by Anthony P

I think he thinks average cost for consumer to buy= average cost of studio to make a copy.

No I don't think Average Cost is what the Studios pay to make a copy, this is what you guys pay to buy a BD or 4K. The Profit to the Studios is the difference between the Selling Price and the Cost to Produce that Disc. There are a lot of factors involved, but if you look at the Total Disc Sales Revenue in the Red they are not making a Profit.

Why do you think Disney pulled out of Australia, they want to see if that makes a difference to their Subscriber Streaming. The Studios just want to get back in the Black and make a Profit. IMO going forward it will be Box Office Revenue and Streaming!

[Steedeel]

Originally Posted by alchav21

No I don't think Average Cost is what the Studios pay to make a copy, this is what you guys pay to buy a BD or 4K. The Profit to the Studios is the difference between the Selling Price and the Cost to Produce that Disc. There are a lot of factors involved, but if you look at the Total Disc Sales Revenue in the Red they are not making a Profit.

Why do you think Disney pulled out of Australia, they want to see if that makes a difference to their Subscriber Streaming. The Studios just want to get back in the Black and make a Profit. IMO going forward it will be Box Office Revenue and Streaming!

There is no revenue from streaming. Why do you think these streaming services don’t reveal viewing data for each show? Why is transparency such a huge deal?

The future of streaming is ad supported free content. It’s not a future us film fans care for in the slightest, but you love ads, so enjoy!

[PenguinInfinity]

Originally Posted by alchav21

No I don't think Average Cost is what the Studios pay to make a copy, this is what you guys pay to buy a BD or 4K. The Profit to the Studios is the difference between the Selling Price and the Cost to Produce that Disc. There are a lot of factors involved, but if you look at the Total Disc Sales Revenue in the Red they are not making a Profit.

The only number you've mentioned is the average cost that customers pay for Blu-ray and 4K. Please provide your source for the cost to produce Blu-ray and 4K discs so we can see the difference between the two and calculate the profit margin.

Wendell previously quoted a number for the cost to produce 4k Blu-ray discs:

Originally Posted by Wendell R. Breland

Side note, Stacey says the BOM for this $8.05 per unit. I assume this covers the cost of the 3 disc, case, booklet, inserts, etc. Don't know how many sets they will order but one would assume they are nowhere near the numbers for most movies on disc therefore do not get large quantity pricing.

That's $8.05 for three 4K Blu-ray discs. The studios can easily make a profit by selling one 4K Blu-ray disc for an average of ~$23. They even frequently sell them for $10-$15 and still make a profit.

[PenguinInfinity]

Originally Posted by Steedeel

The future of streaming is ad supported free content. It’s not a future us film fans care for in the slightest, but you love ads, so enjoy!

The future of streaming is just like the past and present of TV.

Meet the new boss, same as the old boss.

[Vilya]

Originally Posted by alchav21

No I don't think Average Cost is what the Studios pay to make a copy, this is what you guys pay to buy a BD or 4K. The Profit to the Studios is the difference between the Selling Price and the Cost to Produce that Disc. There are a lot of factors involved, but if you look at the Total Disc Sales Revenue in the Red they are not making a Profit.

Why do you think Disney pulled out of Australia, they want to see if that makes a difference to their Subscriber Streaming. The Studios just want to get back in the Black and make a Profit. IMO going forward it will be Box Office Revenue and Streaming!

The disc sales revenue reports only tells us how much money disc sales generate; it tells us nothing about how much it costs to manufacture them or how much profit was made. You falsely assume that because disc sales are declining that there is no profit being made. You have never provided any evidence to support your absurd assertions that discs are losing the studios money. Streaming, in its present form, is what is losing them money.

If it costs $3 per unit to make something, but each unit sells for $10 then a $7 profit is being made per unit sold. If 1000 units are sold, then a $7000 profit was made. If later only 500 units were sold, a profit of $3500 was made. The sales declined 50%, but the product is still profitable. It still sells for more than it costs to make. I am certain that you understand none of this.

Streaming, on the other hand, sees double digit revenue growth year after year, but still fails to be profitable for all but maybe one provider. Their costs grow faster than their does their revenue. I am not suggesting that streaming is going to fail, but something will have to change to correct this chronic imbalance and that change will probably not be for the better from a consumer's point of view.

Disney's decision in Australia is not a positive development, but pulling out of one market is in no way the same thing as pulling out of all markets. Disney continues to sell discs in markets that they deem worthwhile to be in and it remains to be seen if Disney will license titles to independent labels that operate there.

The studios and their licensees continue to offer physical media because there is still a profit to be made in doing so. Companies do not keep making products that lose them money while also offering a wider selection of that very same product. Another fact that is ever beyond your comprehension.

[Vilya]

Originally Posted by PenguinInfinity

The only number you've mentioned is the average cost that customers pay for Blu-ray and 4K. Please provide your source for the cost to produce Blu-ray and 4K discs so we can see the difference between the two and calculate the profit margin.

Wendell previously quoted a number for the cost to produce 4k Blu-ray discs:

That's $8.05 for three 4K Blu-ray discs. The studios can easily make a profit by selling one 4K Blu-ray disc for an average of ~$23. They even frequently sell them for $10-$15 and still make a profit.

Explaining this to him is as futile as arguing with a robocall.

Yet, the challenge of trying is hard to resist somehow.

[veritas]

Originally Posted by Steedeel

There is no revenue from streaming. Why do you think these streaming services don’t reveal viewing data for each show? Why is transparency such a huge deal?

The future of streaming is ad supported free content. It’s not a future us film fans care for in the slightest, but you love ads, so enjoy!

Personally I think the future of streaming is majority catalog titles on a service that costs half what they want now. ad companies pay shit they Aren't giving a company 5 dollars a month per person. It really doesn't make much sense to pay 100 mil for black Adam when older movies like iron man probably cost under 10 mil.

Catalogs at rather cheap rates make more sense for basically everyone. customers get a great deal and studios don't shoot themselves in the foot as as 300 mil movies lose 300 mil in box office revenue from people waiting for it to go on streaming. It also stabilizes the the market for physical and vod as the wait could actually be long enough that people might wait.


I'm a collector but its hard to sell even me on a disc of a movie I like when it hits streaming at the same time or even before the disc.

[Steedeel]

Originally Posted by veritas

Personally I think the future of streaming is majority catalog titles on a service that costs half what they want now. ad companies pay shit they Aren't giving a company 5 dollars a month per person. It really doesn't make much sense to pay 100 mil for black Adam when older movies like iron man probably cost under 10 mil.

Catalogs at rather cheap rates make more sense for basically everyone. customers get a great deal and studios don't shoot themselves in the foot as as 300 mil movies lose 300 mil in box office revenue from people waiting for it to go on streaming. It also stabilizes the the market for physical and vod as the wait could actually be long enough that people might wait.


I'm a collector but its hard to sell even me on a disc of a movie I like when it hits streaming at the same time or even before the disc.

Maybe, yes. I mean, VOD is still streaming though. If you are suggesting cinema, then 4 month wait for PVOD, then VOD after 8 months and regular streaming premier after 1 year? I could see that working, but the likes of Disney and Warner (Max) need relatively recent films. The catalogue could be a buffer for FAST services.


However, studios will want to stay relevant and I think we are seeing the seeds of a gaming, movie universe. Apple, Amazon, Warner and Netflix are all aiming that way and I think we will see crossover with game and movie/tv bundles. Cross promotion and marketing could be easier with the “watch the movie then play the game” tagline.
That doesn’t have to mean a Disney style streaming service, there are millions of games that could be ripe for film or tv adaptations. Many genres and age ranges. For example, The Last Of Us, The Witcher, Mario, have all been a success.
The potential for an Elder Scrolls multi film franchise is huge, ditto Fallout or Call Of Duty IF creators can get the quality right.

I believe that’s where we are going, even though we are just seeing glimpses of that at the moment. Warner gave a hint of what to expect, with actors also performing voice overs for video games and actually appearing (digitally)in video games, animated series and tv shows.

[bhampton]

Originally Posted by veritas

I'm a collector but its hard to sell even me on a disc of a movie I like when it hits streaming at the same time or even before the disc.

I just can't get interested in an inferior product.

Guardians of the Galaxy was on Disney+ when I bought it but I try to get the most of my experience watching it and that means getting the best version of it offered to me.

I'll keep buying Disney UHDs even though I still subscribe to the service. However, Netflix's crackdowns have convinced my kids they need to get their own accounts to streaming services because me having the account for them no longer works. I love this and hope Disney follows suit. I'm fine with the amount of discs being released and I don't want any of the streaming services anymore.

[Steedeel]

Originally Posted by bhampton

I just can't get interested in an inferior product.

Guardians of the Galaxy was on Disney+ when I bought it but I try to get the most of my experience watching it and that means getting the best version of it offered to me.

I'll keep buying Disney UHDs even though I still subscribe to the service. However, Netflix's crackdowns have convinced my kids they need to get their own accounts to streaming services because me having the account for them no longer works. I love this and hope Disney follows suit. I'm fine with the amount of discs being released and I don't want any of the streaming services anymore.

Same, it’s going to be a different world when discs are no longer, for sure.

[Lee A Stewart]

Originally Posted by Steedeel

Same, it’s going to be a different world when discs are no longer, for sure.

Only for Videophiles. The masses won't be aware it even happens. They stopped buying discs long ago.

[Steedeel]

Originally Posted by Lee A Stewart

Only for Videophiles. The masses won't be aware it even happens. They stopped buying discs long ago.

Obviously, I mean I’m talking from film lovers/collector’s point of view, not the zombies. Film is a life long passion so an inferior product is going to have a huge impact.

However, we are far from that happening.

[Wendell R. Breland]

Originally Posted by Lee A Stewart

Only for Videophiles. The masses won't be aware it even happens. They stopped buying discs long ago.

In terms of global revenue disc sales was always a small part of the pie (see the orange bars). With the decline of box office power disc sales have declined as well. Disc don’t wear out so saturation comes into play as well.

[Show spoiler]

[Boccaccio]

I got curious about the Blu-ray production cost and the profits because Alchav seems to think it's a money loser.
I found this site where you can put in orders to produce almost any kind of physical media. ( no 4K though )

https://www.discmakers.com

For 1000 discs the cost comes down to 7.631 $ excluding tax ( average 7,6 per disc )

This includes a pressed BD-50, regular case, menu with 10 chapters, UPC code, AACS licensing, disc print all shrink-wrapped and shipped to any address in the US.
I didn't include design because I assume the companies have those themselves.

For 2000 discs the cost is 12.077 $ ( average already down to 6$ )

You can order more than 2000 but you have to call them and since I don't live in the US, I'm not going to do that.
But just imagine how much the price will go down if you order 20000 discs.
And this is all-in unless I'm missing something.
The boutique labels will also have to pay the licensing fees of course.

I think disc profits will be just fine.