PSP UMD movie sales falter

[expletive]

Because, unless you think PSP owners do NOT buy DVD's, it's simply making it more enticing for them to.

Not to mention it will still attract people who've been waffling on the purchase by letting them see there WILL be cheaper UMD purchasing option.

Of course it helps. (Helps "sell more UMD's," certainly. You can still question if it brings in enough extra purchases to counteract the price difference they'll be losing.)

We've come full circle Its this logic that i was questioning initially. PSP installed base is going up yet UMD sales are going down. I guess i'm saying this:

1. I dont think that UMD movie prices, availability, or anything with UMDs is whtas keeping people from buying PSPs.

2. I dont think that me buying,for example, 10 DVDs and getting 7 UMDs for free with them now makes me any more likely to buy a PSP then i was before.

 

[mckmas8808]

We've come full circle Its this logic that i was questioning initially. PSP installed base is going up yet UMD sales are going down. I guess i'm saying this:

1. I dont think that UMD movie prices, availability, or anything with UMDs is whtas keeping people from buying PSPs.

2. I dont think that me buying,for example, 10 DVDs and getting 7 UMDs for free with them now makes me any more likely to buy a PSP then i was before.

So you're saying people with PSPs just don't want UMDs. Okay good arguement, but I still think that the price has something to do with it. after buying 3 or 4 UMDs all over the price of $20 a person and starts to get tired of it. Lower to price to $9.99 - $14.99 and let's see what happens.

And lets not forget UMDs are selling, it's just that every UMD isn't selling 100,000 units thats making movie studios take this routes. And some of those older movies don't even need to sell 100,000 units.

 

[expletive]

So you're saying people with PSPs just don't want UMDs. Okay good arguement, but I still think that the price has something to do with it. after buying 3 or 4 UMDs all over the price of $20 a person and starts to get tired of it. Lower to price to $9.99 - $14.99 and let's see what happens.

So you tink that if UMD movie prices dropped, that makes someone a PSP customer now, if they werent before?

 

[Ty]

So you tink that if UMD movie prices dropped, that makes someone a PSP customer now, if they werent before?

I guess it depends on how valuable is the feature of portable movie watching? If you don't care at all, then it wouldn't matter if UMD movies are free. But if it's something you just gotta have, then you're going to be relatively price insensitive.

If it's a desired feature, then the next barrier to entry is the price of the movies. Lowering that should positively drive more PSP sales.

That said, if someone just isn't interested in the PSP as a game machine, I doubt cheaper UMD movies would get them to buy a PSP.

 

[ban25]

The situation will be more interesting when the new formats hit because iHD, if I am remembering what its called in the AACS, allows you to rip to a portable device format (I noticed that in the Bill Gates keynote when they were displaying HD DVD). Does the PSP only play movies from umd or can they go onto the memory sticks as well. Because if I buy a BD-ROM or HD-DVD I will already have the legal means to transfer that over to my portable devices. Bleh, I need to do some more PSP studying...

You can rip MPEG4 video to the PSP using a some free utilities or one of Sony's own. I have a pair of 1 GB memory sticks I usually throw a few TV shows or movies on when travelling. The battery life is quite good when playing from the memory stick -- probably around 7-8 hours.

 

[patsu]

We've come full circle Its this logic that i was questioning initially. PSP installed base is going up yet UMD sales are going down. I guess i'm saying this:

1. I dont think that UMD movie prices, availability, or anything with UMDs is whtas keeping people from buying PSPs.

2. I dont think that me buying,for example, 10 DVDs and getting 7 UMDs for free with them now makes me any more likely to buy a PSP then i was before.

I think to answer your questions, you have to divide them into 2 parts:

* The UMD + DVD/Blu-ray bundling move applies to Sony's content division
You are already a PSP user and they want extra dollars and cents from you using UMD as an excuse. Bundling allows a vendor to sell more UMDs by masquarading the UMD price inside DVD/Blu-ray. This plays with your "Willingness to pay" ( http://www.pitt.edu/~super1/lecture/lec11871/001.htm ). The vendors earn more per consumer.

* Then once you have a sizable collection of UMDs, you are more likely to buy a Sony devices that has built-in UMD support (feature for feature comparison with another brand). Currently this part is not played out yet. The other lock-in is the memory stick.

 

[mckmas8808]

So you tink that if UMD movie prices dropped, that makes someone a PSP customer now, if they werent before?

No, but if they were a PSP owner and NOT a UMD buyer; lower prices could and would change some people's minds. If you had a PSP and Spiderman 3 came out for $12.99 and you wanted the movie, why wouldn't that look like a good deal?

 

[Corwin_B]

If it's a desired feature, then the next barrier to entry is the price of the movies. Lowering that should positively drive more PSP sales.

That said, if someone just isn't interested in the PSP as a game machine, I doubt cheaper UMD movies would get them to buy a PSP.

Right now, I'm sitting on the fence with regard to the PSP. There are a couple of released games I'm interested in, and a pretty solid 2006 line-up, but the price is stopping me, considering there are currently only a few games I'd like to play.

Media features would be a big plus, but I know I'd lose interest in ripping/reencoding movies after going through it a few times (did it already with my PDA, which has pretty good movie playback). UMD/DVD bundles would probably tip the scale for me, that or a price drop. If none happens, then I suppose I would wait for a couple of extra months until more games I like are released.

 

[cthellis42]

We've come full circle Its this logic that i was questioning initially. PSP installed base is going up yet UMD sales are going down. I guess i'm saying this:

1. I dont think that UMD movie prices, availability, or anything with UMDs is whtas keeping people from buying PSPs.

2. I dont think that me buying,for example, 10 DVDs and getting 7 UMDs for free with them now makes me any more likely to buy a PSP then i was before.

I seriously don't get this. When does price NOT "keep people from buying XXX?" That is simply what it does. Lots of people didn't purchase DVD's until the players and the media got cheaper, and lots of people will stay WITH DVD's and not get HD DVD's until the players and the media are in their purchasing range.

It's a slightly different "player" situation with the PSP than those examples, but certainly not the media. Price is always the major factor. Obviously it won't have as big an affect on PSP sales as lowing the PSP's cost, but it can certainly draw in some people. (And if they're quasi-interested gamers, make them go that route for portable media playing than another. "Well, I'd like to play the games ANYway, and now...!"

Regardless, the bundling isn't to sell more PSP's--it's to sell more UMD's. But, of course, depending on how prominent their presence and recognizability would get because of it, that will have a carry-back affect on the PSP as well. Not to mention the more UMD sales that are out there, the more people are watching movies on their PSP's and--more importantly--the more of them are watching them around other people and attracting their attention and interest in the device. Exposure = marketing, plain and simple.

Media features would be a big plus, but I know I'd lose interest in ripping/reencoding movies after going through it a few times

They just need some good standalone Flash and Java players. I would NEVER get bored of it if I had those around!

 

[expletive]

I seriously don't get this. When does price NOT "keep people from buying XXX?" That is simply what it does. Lots of people didn't purchase DVD's until the players and the media got cheaper, and lots of people will stay WITH DVD's and not get HD DVD's until the players and the media are in their purchasing range.

It's a slightly different "player" situation with the PSP than those examples, but certainly not the media. Price is always the major factor. Obviously it won't have as big an affect on PSP sales as lowing the PSP's cost, but it can certainly draw in some people. (And if they're quasi-interested gamers, make them go that route for portable media playing than another. "Well, I'd like to play the games ANYway, and now...!"

Regardless, the bundling isn't to sell more PSP's--it's to sell more UMD's. But, of course, depending on how prominent their presence and recognizability would get because of it, that will have a carry-back affect on the PSP as well. Not to mention the more UMD sales that are out there, the more people are watching movies on their PSP's and--more importantly--the more of them are watching them around other people and attracting their attention and interest in the device. Exposure = marketing, plain and simple.

I'm talking about UMD discs driving PSP sales. Regardless of how low prices go for UMDs, people without PSPs arent buyin 'em.

Question is if theyre giving them away for free with DVDs or BR discs, does that make a PSP any more attractive for someone who doesnt 'need' it to begin with.

How does giving UMDs away increase sales? Advertising for them? You think people with PSPs dont know about UMDs?

 

[patsu]

I'm talking about UMD discs driving PSP sales. Regardless of how low prices go for UMDs, people without PSPs arent buyin 'em.

Question is if theyre giving them away for free with DVDs or BR discs, does that make a PSP any more attractive for someone who doesnt 'need' it to begin with.

How does giving UMDs away increase sales? Advertising for them? You think people with PSPs dont know about UMDs?

In general, you're correct. Bundling UMD with DVD will not convince people with no portable gaming, video and music need to buy a PSP.

However giving UMD away (for free ?) with a DVD will increase the awareness of UMD and PSP (if they explain enough). It's a little like advertising. Since it generates more awareness about PSP, it can increase the likelihood of sales perhaps only modestly (e.g., as gifts, novelty, reach out to those who didn't know about PSP but has the needs).

In all fairness, I doubt Sony will do that because it's an expensive route. I think they only intend to bundle selected UMD and DVD at a slightly higher price. Interestingly, having the UMD logo stamped on top of a DVD casing will serve to expose UMD and PSP brand too (but less effectively).

 

[cthellis42]

I'm talking about UMD discs driving PSP sales. Regardless of how low prices go for UMDs, people without PSPs arent buyin 'em.

Question is if theyre giving them away for free with DVDs or BR discs, does that make a PSP any more attractive for someone who doesnt 'need' it to begin with.

How does giving UMDs away increase sales? Advertising for them? You think people with PSPs dont know about UMDs?

I already listed what it would do. DIRECTLY drive... some, but probably not much. Everything else, however, still adds up over time. If UMD's sell more they get more shelf space (which sits right NEXT to DVD's. There are already more of them next to the DVD section in Wal-Marts than I was expecting--selling more will keep them there and expand that) and attract the wandering eye. If UMD's sell more, there's more of a chance you'll see people bringing their PSP's with them out and about TO watch movies and attract attention--or even just become an unconscious reminder when said people think about making purchases along either of those lines later. If UMD's sell more it increases the chances of other devices playing along with the format and widening the standard--to which the PSP will still be the most notable device and therefore the more prominent lure. (At least I would imagine so. ) If UMD's sell more and are recognized as being well-priced (at least in those bundling circumstances for right now), then anyone still turned off by the PSP's price may be more inclined to pick it when it DOES drop down some.

Basically, the point is cost ALWAYS makes a difference, and it certainly will lead to more sales. "How much more" can be argued about, and "would it actually bring in more profit" can be as well, but considering it's made it around the first lap but has at least three more to go... Growth in ANY attached area is good.

There is no "need" for portable devices of ANY nature (ok, perhaps a cell phone But you know what I mean), there is just "desire." Said desire always butts heads with cost-of-entry and cost-of-maintenance and cost-of-continued enjoyment, so... It would just make sense that lowering the cost in ANY are makes a lower bar for "desire" to jump over.

In general, you're correct. Bundling UMD with DVD will not convince people with no portable gaming, video and music need to buy a PSP.

Lowering the price of milk will also not convince lactose intolerant people to buy it by the gallon.

You just wiped out all the PSP does with that "in general" comment, so how COULD it have any relation? Those same people also aren't buying DS'es, portable DVD players, iPods...

We're not marketing to blind people, here. There is always SOME level of carry-over to basically ANYONE buying DVD's. And that's a lot of buyers to pique.

 

[overclocked]

expletive

Isnt the point here really that people that owns or plans to own a PSP is more likely to buy UMD-movie if its cheaper?
If we divide PSP users in three groups.
First group only play games.
Second plays games and watch movies from the memstick instead of UMD.
Third buys and plays both games and buy UMD movies.

The first group is not going to change but the second witch seems to be the majority of users out there fits in . I imagine this group is the target and many would start to buy UMD-movies.

 

[patsu]

Lowering the price of milk will also not convince lactose intolerant people to buy it by the gallon.

You just wiped out all the PSP does with that "in general" comment, so how COULD it have any relation? Those same people also aren't buying DS'es, portable DVD players, iPods...

We're not marketing to blind people, here. There is always SOME level of carry-over to basically ANYONE buying DVD's. And that's a lot of buyers to pique.

In general, expletive is still correct. Pricing does not create needs (Pricing is irrelevant if utility is zero). Lowering the price of UMD will not convince someone who does not need a PSP to buy one. Whether the same person will buy DS, iPod, ... is irrelevant.

Like I said, bundling UMD with DVD may generate more awareness. This is a separate dynamic from lowering price.

That said, it's still more effective to target existing PSP owners to sell more UMDs. Casting a wide net by bundling UMD into every DVD is less targeted and can be wasteful. I don't think Sony is doing that.

 

[NANOTEC]

I wonder if this is a hint as to how Blu-ray will do on PS3.

 

[mckmas8808]

I wonder if this is a hint as to how Blu-ray will do on PS3.

Honestly I hope it is. Regardless of what you see or hear UMD's sales are pretty good in relation to how many different devices you can play the media on. Now imagine if other companies like Panasonic, Samsung, Hitachi, Pioneer, etc. were making UMD devices that you could play UMD's on for say $150. UMD's would be doing much better, but I know this is not happening so....

Basically what I'm saying is other companies will be making Blu-ray players so expect the number of Blu-ray media to sell high in comparison to what DVD did when it first started. And this would be completly due to a videogame product that is promised to sell.

 

[cthellis42]

In general, expletive is still correct. Pricing does not create needs (Pricing is irrelevant if utility is zero). Lowering the price of UMD will not convince someone who does not need a PSP to buy one. Whether the same person will buy DS, iPod, ... is irrelevant.

No, it's more that the example is irrelevant. Or, rather, taking too narrow a look. Do you really think that--as many iPods as are selling now--they wouldn't sell more if songs on iTunes suddenly halved in price? You don't NEED to buy songs on iTunes to buy or enjoy an iPod to the fullest (I've bought a sum-total of one song, because I needed it in a hurry. ), but they are still connected services, and part and parcel of the "cost" people think about when determining if they want.

As I said before, none of these devices possess needs. Lowering the price lowers resistance to purchasing what you desire, so you pick up those on the border. There are always going to be plenty of people "on the border"--they just have different checkboxes to fill before they decide to go for it.

In the case of UMD movies on the PSP, it's certainly arguable that the effect is lessened (certainly less than if iTunes dropped their prices notably, since music is the primary service), but it still picks up people.

If someone's been pondering picking up a PSP but only sees a few games that they like and don't want to spend that much on UMD's, lowering the cost may finally tip them over.
If someone's been curious specifically about the portable movie playing but didn't like the price, lowering the price lets them keep it in mind, pay more attention to the PSP in general, and see a game they really WOULD like...

Then, the moment they own a PSP, they start laying out for games AND peripherals AND UMD's... While the statement "regardless of how low prices go for UMDs, people without PSPs arent buyin 'em" is true on the surface (but not 100% true, as there are still people like me who pick up games/media/etc in advance of actually owning the device because we think we WILL eventually own one, and don't want to pass up on good deals or time-sensitive offers, etc. I've done that so far with laserdisk players, the GameCube, PS2, and PC games/utilities I didn't yet have the configuation for), is it utterly pointless. The market does not exist in small boxes with hard walls and people who can't see beyond them. Lowering cost will--quite directly--convince people to BUY a PSP, which makes for MORE people to buy UMD's. (And games, and peripherals...) And then contribute to all the secondary and tertiary effects listed as well.

People who buy DVD's and HD DVD's are (obviously) into movies. UMD's are movies. The PSP plays them. Is anyone here claiming that no one who buys DVD's and (later on) HD DVD's would have ANY interest in UMD's? Because that is the only circumstance where saying it would have no influence on driving PSP sales exists. Personally, as I think the vast majority of people have and interest in movies and TV shows, and that most of them make DVD purchases from time to time, this becomes a good way to catch their eye with what the PSP has to offer.

One can freely toss around criticisms and question how many people would actually be convinced. Personally, I think that the secondary affects would have more impact in PSP sales than the primary affects, but they play into and off of each other, but it is still a part of the "cost of entry" and "cost of ownership" and WILL have an affect--even if it doesn't do much until it accumulates with later cost drops, new bundling offers, etc. (It still makes it lower, which draws in more people.)

I'd rather we do THAT than pretend there was anything poignant being said here. If you lower the cost of something--ANYTHING--closely associated with a device, it will have an affect.

 

[patsu]

No, it's more that the example is irrelevant. Or, rather, taking too narrow a look. Do you really think that--as many iPods as are selling now--they wouldn't sell more if songs on iTunes suddenly halved in price? You don't NEED to buy songs on iTunes to buy or enjoy an iPod to the fullest (I've bought a sum-total of one song, because I needed it in a hurry. ), but they are still connected services, and part and parcel of the "cost" people think about when determining if they want.

I'm afraid it is a lot more complex than that.

We are talking about different level of problems. The issues with UMD movie are:
* UMD requires an expensive PSP and very few people own a PSP
* Unlike music, the need for portable movie viewing is limited (i.e., it's not a mainstream behaviour today). Without such an existing demand, Sony will need to jumpstart the market somehow.
* Most people are used to watching movies on a large screen, and PSP does not have a TV output. Most people can also wait to watch a long movie, so they can always find a way to watch the same movie on DVD.

Under these circumstances, dropping UMD price does little to increase PSP sales (because the original urge to enjoy UMD is not there, strong[er] substitutes exist, not to mention most people don't have a PSP to enjoy their sample UMD to begin with). It is a larger question than just "worth".

This is why I mentioned that lowering price will not generate the need to watch UMD. Mathematically, lowering price just slides the demand along a "not so trilling" UMD demand curve. Then on top of that, we expect the UMD demand to further drive PSP sales (!). I fear we may be asking for too much here. Sony should just target existing PSP owners today to sell UMD.

Your example of iPod works because portable music is an established _market_. The demand is also proven to be huge to justify for low cost songs.

One can also argue that if we make UMD free or $0.99 per movie to undercut DVD's reference price, will it improve PSP sales ? Certainly (since the saving in movie cost will draw in movie buffs, *assuming* the selection is good) but will Sony survive ?

There are reasonable bounds to pricing. Very often people are tempted to drop their price to improve sales, but it should be thought through carefully. It does _not_ always work (especially for new products). I did that a few times, and there are scars to remind me.

EDIT:
Don't get me wrong. I like UMD and Sony's bold and aggressive moves.

 

[mckmas8808]

Lowering UMD prices would jumpstart UMD sales, I just don't know if it would be enough to make the movie studios happy.

 

[expletive]

cthellis42,

There have been instances where what youre saying plays out like that, where all that was necessery was a price decrease and something really 'caught on'. However, there have also been plenty of examples of products in a bargain bin where the price was so low theyre bascially giving them away, yet still no one buys them.

The examples youve presented here require such an elaborate string of events to occurr (shelf space and perceptions, consumers buying software for hardware they dont own) that its not compelling enough for me to feel its possible, much less likely.

I respect how passionate you are about this but i stand by my original opinion that lowering the price of UMDs will not attract a relevant # of new PSP owners. In the end, i actually think that UMDs may be dead already as digital distribution is a real threat for movies and shows on portable media players. Look what apple is doing, i cant help but feel many will follow suit and there will such an abundance of downlaodable content for portable media players that UMDs will just end up lost in the shuffle, even for PSP owners.