Well... short claims like that are not meant to capture the full picture. Empirically speaking, streaming people mostly rent (or view for free), and Blu-ray customers mostly buy. The DRM differences also come into play here. He simply stated 2 "formulae" which are open for interpretation.
Netflix Streaming Coming to PS3 Next Month
- Thread starter tha_con
- Start date
No. It means they need to adapt their business model much like the music industry is going through. This isn't 1950 anymore, and the means of delivery and customer expectations have changed. The same old brass in that industry keeps trying to go back to the way things were and not figuring out a way to capitalize on what people want now. If they decide to make not-so-inspiring movies, well guess what people will do less of? Buying said movies.
Re-read my comment you quoted. It applies to all channels: Blu-ray, DVD or digital download, whether they buy or rent. 
Plus the studios are definitely not "going back to the way things were". They are following the consumer trends closely and maximizing profit at the same time. If the consumers are not ready to dump packaged movies yet, why pre-empt them ? I know for a fact that they are doing a lot of experiments and modelling. It would be a mistake to think the movie studios are like the music studios. Their concerns are similar, but the movie studios are more proactive and forward thinking.
They are also pretty quick to recognize that DD can co-exist with disc-version.
Plus the studios are definitely not "going back to the way things were". They are following the consumer trends closely and maximizing profit at the same time. If the consumers are not ready to dump packaged movies yet, why pre-empt them ? I know for a fact that they are doing a lot of experiments and modelling. It would be a mistake to think the movie studios are like the music studios. Their concerns are similar, but the movie studios are more proactive and forward thinking.
They are also pretty quick to recognize that DD can co-exist with disc-version.
and I'm sure the portion of those who only use streaming instead of dvds are quite large.
When I got my bluray player I just started getting lburays from them and getting charged $1 more on my plan. When streaming came to my 360 I dumped the bluray option adn I have yet to get 1 dvd from netflix in the last year.
I'm sure when the dust settles it will be cheaper for them to go streaming only. No huge library to constantly update , check for mess ups , lost in the mail and what ever other problems crop up with having a physical medium.
Those physical hassles are part and parcel of the disc rental business, just like managing a server farm is an inherent part of the digital business.
I think NetFlix's eyes are on profitability and market share, not just cost. At this moment, we know the DD cost is larger than what it could bring in.
The disc rental business is making money, regardless (or in spite) of its cost. As long as it's making money to help sustain the DD part, NetFlix will continue that business. Just like iTunes Music Store was (is ?) sustained by iPod profit.
There will come a day where digital download reaches significant enough critical mass. Meanwhile, NetFlix estimated that their disc business will have another 20 years to go. It's enough time to help them extend their operation overseas.
Consumers will split, mix, share or switch between digital and disc rental based on the offered packages. At the same time, some will still buy DVD or Blu-ray discs. Otherwise, RedBox and Blu-ray growth would not be where they are now.
I think NetFlix's eyes are on profitability and market share, not just cost. At this moment, we know the DD cost is larger than what it could bring in.
The disc rental business is making money, regardless (or in spite) of its cost. As long as it's making money to help sustain the DD part, NetFlix will continue that business. Just like iTunes Music Store was (is ?) sustained by iPod profit.
There will come a day where digital download reaches significant enough critical mass. Meanwhile, NetFlix estimated that their disc business will have another 20 years to go. It's enough time to help them extend their operation overseas.
Consumers will split, mix, share or switch between digital and disc rental based on the offered packages. At the same time, some will still buy DVD or Blu-ray discs. Otherwise, RedBox and Blu-ray growth would not be where they are now.
View on demand is not new? It´s been an option for a long time here, first it was primitive (many channels with movies running back to back and buying access for 24 hours), but it´s getting more and more complete. Netflix and Blockbuster is view on demand with a long ping time. Streaming is still rental.
I am still convinced that Streaming is first and foremost a competitor to the old rental model since i can rent all the blu-ray i want now.
As it gets more widespread and accessible it might eat into the sales of Blu-Ray since "there is no reason to own" when you always have the movies at your fingertips. But that is a convenience thing winning over a trip to the blockbuster or the "hassle" of mailing and adding discs to a netflix queue. It reminds me alot of the old discussion where the access to cheap rental of movies were supposed to "doom" the sales of VHS or was it the other way around
specwarGP2
Regular
You actually believe a large portion of renters are willing to forgo DVD library for the crappy streaming library? Sure...
But we don't know the bluray costs. We only know they are charging more over the dvd model which is making money with the streaming featuer that is costing money. The question is if that $2 they are charging is to break even on supporting bluray (with out taking away from profits the dvd service is offering) And if bluray is making money why they aren't charging for DD ? You would think on some of the cheaper plans an option to stream unlimited would also next them an additional $1-2 over what they currently charge. They are bundling DD because they see it as their future and want to get the numbers up so that more companys will allow them to put up shows and movies quicker on dd .
We don't know if this is factualy correct. We know the DVD busniess is making money. We do not know yet if blruay is making them money or breaking even or even loosing money
Be kinda hard if there isn't another optical format i'd say. I don't see people going out to buy new bluray players in 3 or 4 years to support another new hd tv resolution and if bluray players don't keep getting upgraded then users will continue to move towards DD which is easier to adapt than bluray.
Right now movie selection and prices are not where they need to be for DD. Renting still costs more than Redbox. Bluray growth is high because its what people are used too and as I've pointed out the biggest sellers are coming with DD copies included in the blurays or sometimes even DVDs as with Disney.
All the while the prices are dropping and dropping ot get users to go for it.
Perhaps because the initial infrastructure buildup is significant ? Hastings specifically mentioned that streaming is not making money (yet), and they have no intention to offer streaming separately.
However, they offered Blu-ray rental without streaming. Would not make sense to just breakeven, or lose money with Blu-ray.
They need to compete against iTunes and other DD companies. Of course, they need to expand it asap by leveraging on their disc based business.
By the fact that Blu-ray rental was offered standalone, it should not be losing money. Blu-ray subscribers have grown to 10% of their base (increase from low single digit). It would not make business sense to lose money on it.
There is no need for another optical format. Blu-ray has enough legroom to store more. e.g., 3D movies are around the corner.
To support higher resolution (what for ?), both DD and Blu-ray players will need to be upgraded. Network and server bandwidth needs to be there too. It may not be as simple as mailing out a higher density disc like what NetFlix has been doing for DVD.
That's because BDA has been focusing on the enthusiasts and collectors. These consumers are willing to pay extras for the goodies. The studios packed the extras in to raise the reference price. Moving into mainstream, they will need to lower the price to increase the volume.
They don't offer bluray without streaming . in fact netflix is behind DD more than bluray , if they weren't they wouldn't be willing to loose money trying to get it into as many homes as they can
its not stand alone. Its in addtion
Tvs keep advancing 60hz , 120hz , 240hz , panel sizes keep going up 100inch 120inch as panel sizes grow again and once growth stops in these other areas and home sizes continue to increase people will want higher resolution ev en if we don't want it they will want to resell us everything again.
Bluray does not have an infinte storage amount and the more layers you add the more expensive it gets. Mean while hardrives will continue to come down in price and there is allways a new device out there for DD to be installed on. Bluray players or even next gen consoles with ever increasing power to allow them to play higher and higher specced DD. The transition is many times easier for DD because it can be part of other house hold items. You have netflix 1.0 with 480p well no problem your new cable box has netflix 2.0 with 720p. Your 360 had netflix with 720p max and low bit rates ? The xbox next has 1080p with medium bit rates and so on.
I see it as them not being able to sell the product alone and having to bundle it with other things. Like I said even Disney has to bundle 2 additional items to get the blurays to move at a cost just over or sometime similar in price to two disc double edditions of the product on dvd.
I don't really get the spinning of this. With UP on bluray what do you think is the money maker. The packed in bluray ? The packed in DD or the packed in DVD ?
They did before. My wife subscribed to the plan. Now they add in the streaming portion.
NetFlix dominated the disc rental business. DD is something new for them, and there are many strong players. They have no choice but to compete aggressively. This is perhaps one of the reasons why Hastings insists on combined disc and streaming rental service.
The industry seems to be keen to push 1080p 3D content. 4k x 2k is for digital cinema, and will not be practical to stream across the Internet in the short term.
250Gb Blu-ray is already in the works. DD transiting to higher resolution may or may not be easy because it depends on a lot of factors along the network path before reaching the consumers' homes. It is not merely a player issue.
You can see it anyway you want. Doesn't mean it has to happen that way. The studios and analysts mentioned that their strategy has been to target the enthusiasts. This fall represents a start to target the more mainstream consumers, beginning with cheaper new titles. The bundling increases the reference price (and hence margin). It limits the market instead of help promote sales. More people will buy if the price is cheaper -- with or without pack-ins, as evident by Blu-ray sales on Amazon and other outlets.
What spin ? These are marketing principles.
The money will be made with the total package, but marketed under the Blu-ray name.
specwarGP2
Regular
Yes, that makes perfect sense. People buy the UP 4 disc special edition BD just to get the digital file and DVD and use the BD as a coaster. The only spinning that's going on is in your head
Yes, that makes perfect sense. People buy the UP 4 disc special edition BD just to get the digital file and DVD and use the BD as a coaster. The only spinning that's going on is in your head
http://www.bestbuy.com/site/Up+-+Blu-ray+Disc/9506073.p?id=2019957&skuId=9506073&st=UP&lp=4&cp=1
Or you know UP on Bluray at best buy for $20 bucks with the dvd and DD included.
Which is just $4 more than the basic DVD verison
http://www.bestbuy.com/site/Up+-+Wi...53.p?id=2019957&skuId=9506153&st=UP&lp=1&cp=1
So the bluray verison needs not only the $16 dvd edition but also a DD edition and then on top if it the actual bluray disc and sells for only $4 more than the dvd.
I think its certianly spin from Bluray disc association and bluray / sony fans .
I don't see a way in which this is good for teh industry . Bluray was supposed to allow them to charge more for the disc and now its selling not only just $4 more but also includes the dvd and dd cutting out even more revenue. Of course when you have this verison out there DVD sales will be done. It makes no sense to buy the dvd verison for $4 less when you can get 3 verisons of the movie for just $4 more
I haven't seen a 4 disc bluray set. But i'm sure that is in the vast minority of those thing sold. Like the $150 wizard of oz bluray and the $150 snow white.
Edit
I also wanted to say that the two disc dvd is $20 http://www.bestbuy.com/site/Up+-+Wi...62.p?id=2019957&skuId=9506162&st=UP&lp=2&cp=1
I stil ldon't understand how replacing dvd's with bluray when you need to sell the dvd and DD with it is a good thing for the industry.
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because DVD quality is SO incredible sucky and mediocre yikes.. how the "¤##"¤ can the same people that fight over the least pixel difference between console platforms accept DVD quality over anything.
And to answer you question, a Blu-Ray packed with DD and DVD is perfect for the typical UP purchase, DVD for the car and kids room, Blu-Ray for the Home Theater. DD for the PC.
Renting BluRays in our store is a big plus at the moment - in my region BD acceptance is still a little low, and as a result last time we went into the store and thought we'd like to rent Wolverine which had just been released that week, they were all gone. So my wife went to the counter to ask, and as I half expected, the reply was 'I'm sorry mam, we only have the bluray version left'. Obviously, my wife and I weren't sorry - if they'd only had the DVD version left, I'd have picked a different movie.
specwarGP2
Regular
Which is exactly what Disney wants you to think because they want everyone to migrate over to BD. So they package and price the BD in a way so that anyone with half a brain will choose the BD version over the DVD.
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Sure. A lot of people thought Blu-ray couldn't win the HD war too. ;-)
The DVD sales is falling anyway with or without Blu-ray. The latter represents a growth business for them. Therefore it is important to fuel its growth to reach the masses. Even with the bundling, the studios are still making money because those costs are sunken. DVD copy is done. Digital copy is done for digital distribution too (just a different DRM). It's a matter of adjusting value judgement with pricing.
Blu-ray was supposed to allow them to charge more for the disc and now its selling not only just $4 more but also includes the dvd and dd cutting out even more revenue. Yes ! But going to mainstream may make more money to sustain the bundling. Limiting it at a high price will restrict its growth. HD movie viewing is a mass market experience (HDTV price has come down).
In addition, because Blu-ray is evolving, the industry will be able to smack a premium on 3D Blu-ray later on. Don't be surprised if Blu-ray opens up new revenue stream for the studios moving forward.
The studios also hope that some will replace their existing DVD libraries with Blu-ray, if they get hooked at $20.
Your stlil not explaining on this is porfitable.
All new releases are doing this , Star Trek , Angels and demons and even older titles are coming in these bundles.
How exactly is this helping them. Do the studios think they will sell in the future at $20 bucks without the dvd and DD ?
How do they justify giving up roughly another $25 -$30 in revenue that could have been made by selling the dvd and dd by themselves.
Right now you have 3 products together selling for slightly more than the original product.
I just picked up beerfest at best buy for $5 bucks. $2 less than the dvd verison.
Doesn't seem like bluray is doing well to me
All new releases are doing this , Star Trek , Angels and demons and even older titles are coming in these bundles.
How exactly is this helping them. Do the studios think they will sell in the future at $20 bucks without the dvd and DD ?
How do they justify giving up roughly another $25 -$30 in revenue that could have been made by selling the dvd and dd by themselves.
Right now you have 3 products together selling for slightly more than the original product.
I just picked up beerfest at best buy for $5 bucks. $2 less than the dvd verison.
Doesn't seem like bluray is doing well to me
For increased volume.
So each copy has to be positive. Otherwise, they'd just lose more money as more people buy, which is absurd. The DVD and digital copies are all sunken cost and can be made for cheap. The distribution chain will take 33%-50%.
The only uncertainty is the title development cost. Their demand modelling will help them estimate the volume. All the studios are pretty much old hand at this now.
The cost of pressing a DVD and a Blu-ray is certainly lower than $10. The cost of doing a digital copy is small too since it is a virtual goods. The last I read, in the early HD war days, pressing Blu-ray costed a couple of bucks per disc. It has to be cheaper now because of the increased volume after the HD war, even before this price drop. Moving forward, the new $20 price will push down volume pricing further.
You just gave more business to them whether you think they are making money or not.
I bought Up this afternoon too.
Silent_Buddha
Legend
You actually believe a large portion of renters are willing to forgo DVD library for the crappy streaming library? Sure...
I already know of quite a few people who have done just exactly that. They no longer buy DVD's and have no intention of moving to BD.
A few of them purchased a X360 purely for those purposes. None of them have even bought a game yet.
Then again I also know a few people that have upgraded to BD. But the largest group of people I know still use DVD.
With regards to pure renters, most of the people I know have moved to streaming media. And only rent DVD's when the streaming version isn't available. Convenience in this case trumps all.
Regards,
SB
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