Retailers Pressure Studios on Web Deals 202
mikesd81 writes "Over at the Associated Press, there's an article about retailers pressuring movie studios for the same deals that online servies are getting. Target has sent a letter warning 'that Target might have to reconsider the amount of shelf space allocated for movies if studios undercut the wholesale price of DVDs by giving online services a better deal on digital offerings.' At issue is the low price some studios charge for films downloaded through such fledgling services as MovieLink, CinemaNow and Amazon.com's recently launched video store. The two-disc rerelease of Disney's 'The Little Mermaid' now retails for $14.87 at Wal-Mart and $14.99 at Target. The movie can be bought for $12.99 on iTunes."
In other news... (Score:5, Funny)
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Finally, a taste of their own medecine (Score:5, Insightful)
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Christian
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Yes, Apple does the same thing, ... (Score:2)
Given the iTMS goal of selling iPods, the yes. Apple does that with iPods.
iTMS does that directly, it is not a profit center itself as it is a marketing vehicle for iPod. Hence the 0.99 price, and low margins. Operating at or slightly over cost.
iTMS does that ind
Re:Finally, a taste of their own medecine (Score:5, Insightful)
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Re:Finally, a taste of their own medecine (Score:4, Informative)
CSS is a kleenex. You can sneeze a hole in it.
The actual problems with copying DVDs are the ways they deviate from the standard in order to make the DVD unrippable.
Philips actually came down on some people for using the COMPACT DISC logo on CDs mastered some funky way to make them not be rippable (without using a data track, they were unreadable in data drives, but worked fine in audio) and told them they had to unfuck the CD or stop using the logo or get sued. Not sure how it all fell out though. But regardless, the DVD consortium, if it had any integrity which we know it doesn't, would be doing the same thing.
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I always find it funny that the RIAA is trying every way possible to plug the anal log hole. At least they could start putting small packets of vasoline in every CD for when they finally come after you.
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How does that make it not DRM? Fairplay is also easy to break. So, I guess that means Apple doesn't use DRM? Hell, Apple even allows you to convert the files to a non-DRM format with their own software. The studios who sell DVDs don't give permission to do that, you have to break the (stupid) law to do that, but iTunes allows you to do it legally.
It's rather pathetic how people will rant about DRM, and then claim that DVDs are not DRMed because the DRM is easy
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The article is missing the point that one is apples and one is oranges. The used Apple product can't be put on Craig's list or E-Bay. A physical product can.
Would you like to get a film for $15 and resell it used for $8 when you are done, or pay $13 and have it die with your hard drive?
This is one of the factors why online digital sales are still beh
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I wasn't aware that Best Buy, Fry's, Krogers, Safeway, Albertsons, Publix, Circuit City, Ultimate Universe, New Generation, Silo, Costco, Hollywood Video, Blockbuster, NetFlix, Suncoast, and any other distributor of media utilize Target and Walmart channels for distribution.
Target and Walmart are effective wholesalers that makes them effictive distributors which gives them the advantage of undercutting smaller st
Huh?? (Score:5, Insightful)
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Re:Huh?? (Score:4, Insightful)
Bandwidth and server maintenance costs too, albeit not nearly as much as DVD packaging/shipping. Or does it?
Nowhere near. And if you're counting server maintenance, add the cost of the store, theft of stock (that gets passed on to the consumer too), and employee salaries, all of which cost much more for a real store.
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I'll submit that building and maintaining the infrastructure to deliver that much paid content in a timely and reliable fashion is not cheap.
And that's just the first week...
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Not practical to kiss them off yet. (Score:2)
In another few years, the movie studios could do just that.
But right now, B&M DVD sales are too much a part of their revenue stream to allow them to just walk away from it. Just think, if some movie studio said "no problem, we'll just sell exclusively through iTunes," how many consumers would see their movies? Not too many -- it's still only a small percentage of consumers who buy music online, and even fewer who buy movies online.
The B&M stores are go
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I'm not saying get rid of B&M, I'm saying if Wallmart won't sell DVDs anymore, you'll still have Best Buy, various record stores, Amazon, Blockbuster, and loads of other ways for people to buy normal DVDs. I don't think Wallmart will actually drop DVDs, though, because they get their strength from the idea that you can buy ANYTHING at Wallmart. I think they're bluffing.
Of course, I'm not expert, and you could accuse me of underestimating Wallmart's stranglehold on distribution channels.
SOP (Score:5, Informative)
Which business are you in? (Score:2)
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Who are you kidding a bit higher? DVD is alot higher then itunes. Have you ever tried to upsample a itunes movie to 720p or 1080i? It looks like someone vomited on your screen but do the same thing with a DVD and it actually looks better then it did at its native resolution.
Online movies less valuable to the consumer (Score:5, Insightful)
And online movies are less valuable to the consumer. Consider:
If there's a difference in value to the consumer, it only makes sense that there would be a (small) difference in price.
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I won't "buy" (acquire limited usage rights as granted by the copyright h
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With Apple's set-top box, that'll change a little bit for their store, since you'll be able to stream movies to your TV, but that's still a huge pain, considering you'll need a $300 box per TV to be able to do that. And considering there's still no other way to
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Of course, that connection is easy only if you have a notebook - desktops are not always within easy cabling distance of the TV. I know that, but you made a blanket statement that isn't necessarily slways true...
The disk
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Lack of Format Flexibility (Score:2)
These retailers are all being ridiculous. The costs of manufacturing, packaging and shipping these movies to them in a physical form should more than justify th
Absolutely they want to kill off DVDs. (Score:2)
Notice also, that Disney and Lucas are suddenly releasing a lot of material on DVD.
I think the studios are ready to bet big on Blu-Ray or HD-DVD to supplant DVD and are getting what they can f
I don't need the box art. (Score:2)
Most movies are watched only once or twice, to know that nothing is left behind after the watching is done would be a relief in many cases.
Re:SOP (Score:4, Insightful)
We asked panasonic and they told us to pound sand, if I was willing to buy 10,000 set's they would give me a deal.
You are trying to fight against massive volume and you will never win. Granted the dumb consumer will buy the $600.00 lower priced plasma from some e-tailer, spend $350.00 in shipping to get it to him, and if he has any problems we gladly help at the tune of $120.00 an hour because it was not purchased from us, or it's actually a different model shipped to them so it does not fit the hole we made, does not have RS232 for crestron integration, lack discreet IR codes, etc.... so it either get's sent back for antoher $180-300 in shipping or we do a change order to modify for the new device and end up charging for 2 hours of programming, labor and materials.
so in the long run they saved nothing by buying it below my cost elsewhere. But then most consumers are not that bright to begin with. they see a shiney at low-low prices and ignore all the added expenses.
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I bought an LCD Projection 50" TV online about a year and a half ago. Price in brick and mortars: $3000. Price online: $2000. Delivery $150. I got it in two days. I was a little skeptical about how great a deal I got so I put it on my Amex for protection in case the site was bogus. I had no problems whatsoever though.
You sound like a high end, high service type shop that probably does a decent job of informing your customers, which is great (though usually one pays through th
Re:SOP (Score:5, Insightful)
This is why Detroit and Redmond are still in business and why Walmart does so well.
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Then you shouldn't have any problem keeping them as customers. It's simple: ask them how much they will pay in shipping (I bet they'll be surprised that the website really isn't any cheaper after they add in shipping). Ask them if they prefer to wait 5-7 business days for their purchases.
Also, perhaps you should consider not stocking items for which
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And where are you without manufacturers?
I understand your interest in not having manufacturers cut out the middle man, but don't forget that's exactly what you are--a middle man. It sounds like both the manufacturers and your customers are questioning the value you add to the transaction. You'd better have a good answer if you want to stay in business.
So what was you answer? Why should customers bother shopping at your store?
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In this case, it really pisses me off as a consumer. These are different products with different costs and different benefits. It's even worse in the ebook business: a large number of the books I want to buy in e-formats are being sold at *hardcover* prices. It is absolutely inexcusable to make the consumer pay for the production costs of a book when there are essentially no p
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What you're saying makes sense, and I haven't really thought about that. At the same time, these complaints seem unfounded since it's a different distribution method entirely distributing what is in many ways a different product. I can understand why Wallmart and Target wouldn't like it, but at the same time, it seems a little crazy for them to be threatening this way.
The way I figure it, people love TV and movies. They're going to want to see them. The studios love making them and love selling them an
WTF?!?! (Score:5, Insightful)
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Re:WTF?!?! (Score:4, Insightful)
Can you say the same for any file on a hard disk, DRM'd or not? My oldest DVDs have outlasted something like five or six failed hard drives at this point, and I was a relatively late adopter of DVD.
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You must not have kids.
About 50% of my physical DVDs have been destroyed beyond usability by my kids scratching them when inserted and removing them. I've paid the Disney tax more than once for the same material.
So far my kids haven't managed to damage a single bit of the movies on my file server.
Oh, and for those that say when the hard drive goes so does all your media, don't be an idiot. Make backups.
... and the choir shouts Hallelujah! (Score:4, Insightful)
I'm not saying that $15 is a fair price for a DVD either. It costs the manufacturer, last I heard, about $2.50 for the DVD and packaging (including the DVD production costs, discounting the original film production cost which is, on average, fully recouped during its theater run).
Heck, if net-neutrality really disappears, the cost of the iTunes download may skyrocket. I can't blame Target and Walmart for trying though. It's all about putting the squeeze on the vendors.
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18G of movie (HD-DVD/Blu-Ray) can't play on "standard equipment" either.
-matthew
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Compared to the "only Apple Corp and no one else" nature of iTunes, it's almost GNU.
There WILL eventually be an in dash HD-DVD or BlueRay DVD player for my car just like there's an in-dash old style DVD player in there already.
No such "iTunes" device exists. At best, some car stereos offer "integration" with the only vendor's devices.
2 bucks for a case? (Score:5, Insightful)
Doesn't it seem reasonable that a downloaded copy should be a little bit cheaper than a physical copy? I mean after all, when purchasing a downloadable copy of a movie you save the cost of:
I'm sure there are more savings, those are just the few real obvious ones.
It sounds to me like the Tar*Mart's of the world are just being greedy.
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Its an issue with obsolenence (Score:4, Insightful)
Good companies evolve and move to where the markets are, they don't cry about how they are so hard done by because a competitor has them beat.
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Lest we forget, Walmart and Target both sell CD's in their stores still even though downloading music is a very established business. This is a negotiation tactic, trying to
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The problem is that great ideas are hard to come by, and "insanely great" ideas are extremely rare... So, when a leaner, more agile company that operates according to this economy of scale comes along and tosses asi
Re:Its an issue with obsolenence (Score:5, Insightful)
Good companies evolve and move to where the markets are, they don't cry about how they are so hard done by because a competitor has them beat.
Smart companies evolve and move to where the markets are *while* crying about how they're being abused, in the hopes that it will slow down the movement enough that they can stay ahead of it.
Not saying it's "right", but it's reality.
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Except that they are already doing it in a way the consumer wants. No, really, they are. Most consumers do not want to watch a .avi or .mp4 file on their computer; they want a physical DVD to pop into the $20 DVD player they bought at Target/Wal-Mart the week before. This is what I really don't get in all of this; Target/Wal-mart and any other retailer in th
Could it be? (Score:5, Insightful)
Man, I don't know whether I actually want to believe what I'm seeing or not...
Now if only they could put the same pressure on the RIAA...
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Walmart and Target are what's called monopsonistic buyers. Which is the exactly opposite of a free market.
In a free market the consumer has the power. This is negotiation between corporations. Whatever Walmart/Target and Disney/Apple finally agree to, the consumers just have to bend over and take it. The consumer has no say whatsoever in the price of anything here. That is not a free market.
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I grok what you're getting at as per the two retailers and the weight they carry, but I gotta be picky on something: WalMart and Target often (if not mostly) compete directly against each other, and against others, in any given city or town. By definition the term "monopoly" in any form would have a very hard time applying to either of them (esp. when you throw in other DVD-selling entities like KMart, ShopKo, BestBuy, and Circuit City, as well as regional big-box reta
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A retailer is both a buyer and a seller. When selling goods there may be some competition (though that is dinimishing) but when they are buying its a whole other story. If you are a supplier and Walmart is selling a majority of your inventory, you are basically owned by Walmart, since if they decided to drop your product, you'll have to close up shop.
Now a monopsonistic buyer can cancel out the effects of a monopolistic supplier, but in this case the monopsonistic buyer is also a seller itself and that s
Apples vs. Oranges: 640x480 movie file != DVD set (Score:5, Insightful)
Re:Apples vs. Oranges: 640x480 movie file != DVD s (Score:2)
But Daaaadddd...I wanna watch it nooooowwwwwwwwwww!!!
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Buffering 0.0001%...
Homer says it all... (Score:2)
Homer: 40 seconds? Oooo, but I want it now!
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(That, and your trusty DVD+-R...)
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WTF? (Score:3, Insightful)
For an extra $2, I get the discs with full-quality DVD video on them, and I can burn them in whatever format I want, and use them on any DVD-equiped TV. Not to mention a handy-dandy carrying case with some nice graphics from the movie on it.
Seriously, if ITMS was selling it for like $6, I could see retailers being pissed, but $12.99? Give me a break.
You damned felon - rat out your source! (Score:2)
So, either you need to demonstrate that you can code an entire decryption and storage program for transferring those movies, or we just might need to have you talk to Bruno about where you acquired your illegal decryption software. You see, it's legal for you to do this on your own, but nobody is allowed to help you, by law.
Isn't modern government swell! [/sarcasm]
BTW - I think the digital movie-only
If one explains in plain english how to do it.... (Score:2)
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And don't don't forget all of the extras, languages, etc that aren't part of online efforts.
As I've said before, I would -love- to buy movies online. But they have got to make it worth it for me. These crippled, compressed wastes of bandwidth are worth a lot less than a DVD I can use as I please. (Well, not legally, but still.)
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Think about all the clueless computer users, for whom just burning a CD/DVD is a big deal that required note taking and step by step instructions.
Now consider that they do not have the ability to comprehend downloading a program like Gordian Knot and ripping/encoding their own DVD Rips, much less using whatever craptacular tool might come with their burning software.
$12.99 is a magical price, because it
Target has the advantage (Score:3, Insightful)
$15 at Target
$13 at iTunes
$1 at the movie rental kiosk
I'm going with the movie rental kiosk, unless I want to keep the movie for a long time so I can watch it many times... I'll go with the DVD at Target. So I don't think Target has much to fear here as far as lost revenue.
I will say, that Apple's DRM is just a whee bit better than DivX, although not by much... Sheesh!
Class play (Score:5, Insightful)
1. "we threaten to reduce shelf space for DVD-s" -> they don't know of online offers will decrease DVD sales, but they add few numbers and decide it's plausible, therefore worthy of protection
2. let's say Hollywood proceeds with undercutting them online
3. retailers reduce shelf space: as a result from this, DVD sales decrease. Retailers say: "you see? you're ruining out business"
4. Hollywood increases online prices to match DVD's in fear not to lose from DVD sales
5. People refuse to buy vaporware DRM-ed download for the cost of a DVD and online sales wane
6. Aftergame: retailers are happy they eliminated the competition (online), Hollywood is happy they kept their DVD sales (not that they'll stop bitching about otherwise), customers: screwed.
The wrong approach for Walmart (Score:2)
Uh, sorry... (Score:4, Informative)
$9.99 - Library purchase
$12.99 - Pre-release and new releases for the first week
$14.99 - After one week as a new release and before it becomes a library purchase (Take a look at Annapolis - $14.99. It was $12.99 the first week Apple started to sell videos)
So, Apple gets one week where they are $2 cheaper before Target matches and Wal-Mart undercuts their pricing. They are just complaining that they have new competition.
I could see their point except for a few things (Score:2)
iTunes Video Resolution (Score:2)
You do know that their video is 640x480 now, don't you? I realize it's not 720x480, but for a standard 4:3 video, it's basically the same thing. I could understand the point if they were still doing 320x240. Of course, just because the resolution is basically the same as broadcast NTSC, doesn't mean the quality is the same. I do realize that the quality of the iTunes downloads is not likely to be as high as a 4:3 DVD.
Offer the retailers DVDs on a spindle (Score:2)
If the retailers want to sell "the same thing" let them buy the pre-recorded DVDs on a spingle. No
And the point is? (Score:3, Interesting)
So for $14.87 you can get 2 already made discs at Walmart, in a nice storage case, with plenty of extra bonus material, that will play on any (region 1) DVD player, or for less than 2 dollars less you can spend your own bandwidth to deliver a copy to you, and provide your own packaging and media, that contains only the movie, is of a much poorer quality, has a DRM infestation that will keep you from using it where you want to use it, and eventually you will not be able to play back on the system you want to play it back on. If you buy the Wal-Mart version you ratain right of first sale and you are free to resell it if you want, or lend it to friends, or even give it away. If you have the downloaded version you can't legally do any of these. And somehow Wal-mart wants to claim that this alternate outlet puts them at a disadvantage? I'm sure they would like to have a complete monopoly of distribution, but any argument that cheaper on-line sales unjustly undercuts them is completely bogus, and if anything it might even improve their sales when the on-line mark realizes what a bad purchase they made. It certainly makes the Wal-mart price for a couple of mass produced and packaged discs look like a great deal in comparison to on-line pricing.
Equipment Costs (Score:2)
Don't forget the fact that those region 1 DVD players can be had for $30, instead of having to pay $500 for a computer (or more for a Mac), plus $250 - $350 for the convenience of having an iPod to carry the movies around on, plus $300 for the Apple iTV set-top box to actually be able to watch the movies on your TV. I know that most people
Can't compare online to hard media (Score:2)
That said, I think that the online copies ought to be even cheaper (high price of $10, and maybe $7.50 for "older" titles, $5.00 for "classics"), for just that reason.
This will definitely be interesting to watch, to see
Wouldn't buy a movie as download anyway... (Score:2)
Studios Win Again (Score:5, Insightful)
Retail DVD costs: Media, replication, packaging, distribution, slotting fees, spoils and other logistics problems, and varying amounts of advertising. Throw in the loss of control of the DVD content. That's your priviledge to make and keep personal copies, freedom to play the movie when and where you want. Don't forget the graft required to get stuff on the shelves of your average big box retailer, loss of control of the distribution channel once it hits the retailer's dock and a million other tiny headaches.
Retail Download: Zero duplication costs, nominal distribution costs, advertising. *Total* control of distribution, ability to control when and where the consumer can play the content. (windows media player 11 has this feature) Beyond that granular control of the rights conferred upon the consumer through DRM.
Consumers are willing and happy to trade their freedom for $2. The studio pocket millions of extra dollars.
For every j@ck@ss that thinks this is the "free market" at work, will they please explain where the innovation is in this model? How is the consumer market for movies -more- competitive as a result? I can't see how consumers benefit in an industry controlled by an oligopoly.
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$2?? (Score:3)
Although I don't find myself buying movies at brick and mortar stores. If I'm really going to buy a movie (pretty rare) I'll just order it from Amazon or something. Usually it is for a gift. I don't see much point in owning movies except for the few really great ones that you might actually watch more than once or twice. But even then, repeat viewing loses its appeal as I get older.
-matthew
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I'd be more than willing to pay an extra $2 for the convenience of packaging and burning to disc. I mean, I'd probably do it anyway myself if I downloaded it. The blank media itself nearly takes up that $2. I say a $2 difference isn't enough to make the download time, time burning, and media worth it
You would if you could, but you can't - that's one of the reasons 12.99 is a pretty bad deal. You can play it on a computer, and that's about it.
Not Fair... (Score:2)
Then, maybe, just maybe, Target and Wal-Mart will actually have an argument.
Heh Heh (Score:2)
Studios sent a letter back saying "Wal-mart sells enough discs for two target chains put together, and then some, so we don't need you. don't let the door hit your ass on the way out. By the way, your business model is doomed, suckers." Enclosed was an audio CD containing 74 minute
No DVD extras with iTunes movies (Score:2)
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Those are extra I could certainly do without.
Idiots (Score:2)
There is less money to ship the things (Score:3, Insightful)