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  1. #1
    spicynacho's Avatar
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    Default Guide to Sales Metrics

    I have made this little guide to try and define each metric as objectively as possible. I didn’t see anything like this in the High Def FAQ. I felt that since we always debate each other about this information, we should all be on the same page. If you feel I have made any mistakes, omissions, or given any metric unfair treatment, leave a comment and I will try to keep the OP up to date.

    Amazon Salesrank
    The current rank, within a category (for the purposes of HDM we are speaking of the DVD category), at Amazon.com. This data is interesting but should be taken with a grain of salt. From this data we can usually assert that “Title A” will do better than “Title B” or that a dual release title is selling better on one format or the other. But these ranks should never be confused with sales volume. Prices and sales at amazon may skew sales ranks so they poorly reflect the total HDM market. Much attention is paid to this number because it is the most easily available number to reflect up to the minute consumer purchasing patterns. Sales Rank information can be found at this site and at eproductwars. It is usually contradicted when VideoScan numbers come out. This is Amazon's official word on sales rank. Aurora has provided us with excellent information from an amazon insider about the true nature of sales rank, this post is a must read.

    DVD Empire
    Is an online retailer which provides live sales ratios of BR:HD DVD. This suffers from the same problems as Salesrank data it is derived from information from a single online only retailer and although it does not line up completely with VideoScan, it generally follows the trend within a few points. Throughout 2007, there has also a bizarre phenomenon when looking at the current week, for some reason HD DVD seems to lead early in the week by a wide margin which is later wiped out later in the week.

    VideoScan
    A report released on a weekly basis by the market research firm Nielsen. This report covers approximately 60-70% of all media sales in most channels both B & M and online retailers. The information in VideoScan pertains to sales of the previous week Monday through Sunday.
    The numbers they report are based on POS receipts. That means that if you go to a store and a movie appears on your receipt, it counts; if you go to Amazon and the movie appears in your shopping cart and you checkout, it counts; if you make a preorder at Amazon or Best Buy, it doesn’t count; if you purchase a player with a disc in the box, it doesn’t count; if you receive movies via a mail in rebate offer, they don’t count.
    The most controversial issue about VideoScan figures is they do not include Wal*Mart’s sales figures. Despite the Wal*Mart issue, these numbers are the most accurate available because they provide a broad cross section that includes most retailers and all US HDM products.
    These numbers are released to the public on Fridays via Home Media Magazine.
    Elemenets of VideoScan
    A ratio of “Blu Ray:HD DVD” sales
    A top ten listing of units by volume which intermingles HD DVD and Blu Ray
    Each top ten is given a number. #1 always receiving a 100, subsequently #2-#10 receive a number less than 100 which indicates the volume sold relative to #1
    There is a list of the top 5 for each format.
    Each top five is given a number. #1 always receiving a 100, subsequently #2-#5 receive a number less than 100 which indicates the volume sold relative to that format's #1


    First Alert
    This is like a preview of the VideoScan, it comes out on Wednesdays when Hollywood Reporter usually runs an article mentioning the top few DVDs, the top HD DVD and the top BR as well as some rental numbers.

    Total Sales
    The actual total sales of a movie or format, this number is not generally available on any kind of schedule. Occasionally it is released by a studio to tout sales of a movie (such as after 300, Transformers, Spiderman 3). Occasionally the number for total format sales will be released or leaked to the public (such as at CEDIA in Sept). These are the most meaningful metrics for software sale but they are also the least available, when they are released they are almost always released by a biased source pushing an agenda and as such the validity is almost always contested when they are released. International software sales are also tracked by GfK and are released to the public through various sources, but not on a regular schedule.

    Player types:
    Stand Alone Players are dedicated playback devices which are designed to be used in the living room.

    Console Players are players which are also video game consoles which are designed to be used in the living room; this category includes Playstation 3 and the XBOX 360 HD DVD Add-on.

    Computer Players are computers which have an optical drive capable of reading HDM these are generally not designed to be used in the living room; this includes laptops, desktops, and HTPCs.

    Install Base
    The number of house holds that have a device which is capable of playing back a specific format of high def media. This number is difficult to track because it requires knowing how many households have multiple players.

    Player sales
    The number of devices sold which are capable of playing back a specific format of high def media. This number is easily tracked because it simply considers sales. In the North America the leading firm that tracks this information is the NPD Group. Internationally German based GfK provides information for Europe, Japan, and other markets. Information from NPD and GfK is leaked from various media and insider sources on an irregular basis. For console sales information there is vgchartz.com which tracks sales and provides information to the public.

    The subtle differences between install base and player sales is that player sales will always be greater than install base, especially as more people buy second players.

    Attach Rate
    The number of media purchased divided by player sales (because of the difficulty tracking install base).
    Attach Rate = (media sales) / (player sales)
    This is a bit controversial because the results for this can be dramatically affected by the non-standard methods for calculating this composite number. By excluding stand alone, console, and/or computer player sales, the denominator can be changed to achieve the desired results. This happens because owners of multi-purpose devices (consoles and computers) have different purchasing patterns than owners of dedicated devices.
    The other problem with this number is that it typically considers present players and historical media sales. So a jump in player sales causes a significant drop in attach rate. In other words, a sales spike triggers a drop off in attach rates.
    In an ideal world with total information, attach rate would be calculated on a periodic basis where install base could be considered over player sales, multi-purpose devices could be handicapped against stand alone players, and you would compare current install base vs. current sales. The formula might look something like this:
    Attach Rate = (This weeks media sales) / (Install base SA + Install base Console * Usage rate console + Install base computer * Usage rate computer)
    The real world is not ideal. When attach rates are released, they have been released by themselves, meaning that neither the media sales nor the hardware sales have accompanied the release. The typical retort is that the individual or group who released the attach rate has cherry picked which devices they are attaching the media to. The implication is that the actual media or player sales are unfavorable to the agenda of the individual or group who has released the attach rate.

    ----------------------------------------------
    Added links to amazon salesrank sites.
    Added section on dvd empire.
    Lightened the degree to which dvdempire and amazon data deviate from videoscan
    Cited what amazon data is useful for
    Updated elements of videoscan section to correct the top 5 for each format piece.
    Updated VideoScan to mention the time period it covers and also added section on First Alert
    Noted that attach rate may be opinion based since we are currently debating attach rates in several threads, once a consensus is reached I will update it to be as fairhanded as possible.
    Added information about international sources for domestic player sales.
    Updated attach rate section, noted that DVD Empire trends were observed in 2007.
    There is no knowing whether or not they will continue this way in 2008.
    Added link to Aurora's post on sales rank.
    Last edited by spicynacho; 12-04-2007 at 02:33 AM.

  2. #2
    Nighthawk's Avatar
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    Nice job Spicy. This would make a great sticky.
    A Movie Request to Hollywood:
    "The Raid" - based on the book by Benjamin F. Schemmer.
    It is the true story of the U.S. Special Forces raid on the Son Tay prison camp located 23 miles from Hanoi, in an effort to rescue 70 POWs on Nov. 21, 1970.
    http://en.wikipedia.org/wiki/Son_tay_raid

    The raiders were led by SF legends Col. "Bull" Simons and Maj. Richard Meadows.
    Both men are memorialized with statues at Ft. Bragg, N.C.

  3. #3
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    Quote Originally Posted by Nighthawk View Post
    Nice job Spicy. This would make a great sticky.
    Seconded.

    Great work!

  4. #4
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    looks good...

    would a blurb about eproduct wars under sales rank be helpful? also, what about mentioning dvdempire and their 'dynamic' rankings that change daily?

    i only bring these up because they are used heavily by newbs (and some not-so-newb) in the sales forums...
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  5. #5
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    Default

    Nice job. I think this should be a sticky. Mods?

  6. #6
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    Quote Originally Posted by spacejamz View Post
    looks good...

    would a blurb about eproduct wars under sales rank be helpful? also, what about mentioning dvdempire and their 'dynamic' rankings that change daily?

    i only bring these up because they are used heavily by newbs (and some not-so-newb) in the sales forums...
    I added something on both.

  7. #7
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    Nice job

    I think one thing that stands out is the attachment rate. How can someone know usage per console/PC? Estimating these values means attachment rates are estimates themselves.
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  8. #8
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    Quote Originally Posted by spicynacho View Post
    I added something on both.
    cool...DVD Empire's numbers track 'fairly' close to the Nielsens, but tyically favor HD DVD by a few percentage points...
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    XBOX360 Elite w/ Add-on (43 HD DVD Movies)
    Walmart: $99 A2/Best Buy Open Box A3: $65 - $50 Gift Card = $15
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  9. #9
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    I disagree with your discussion of amazon on two contradicting points

    1) You do not mention the bias of it being an online only store which will have different trends then in B&W stores. This is evidence by the backwards order of spiderman 3 and spiderman 3 box set.

    2) That said, to dismiss that rankings as "meaningless" is very short sited. Amazon provides a good comparison between movies released on both formats for instance. Or it is pretty reliable to say ratatoulie will better then cars given how ratatoulie has had a higher sales ranking the entire time. And there are many somewhat stable benchmarks in both the HDM and DVD that you know approximately the sales figures will be and can compare what range a given title is likely selling. The problem is when people naively look at the sales ranking and confusing them with sales figures. But with some intelligent thinking, they CAN be useful
    Rules of Engagement:
    1) Logic + evidence > FUD
    2) Anecdotes are not evidence
    3) Opinions are not evidence
    4) Guestimations are not evidence
    5) Fanboyisms are not evidence.

  10. #10
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    Quote Originally Posted by spacejamz
    cool...DVD Empire's numbers track 'fairly' close to the Nielsens, but tyically favor HD DVD by a few percentage points...
    Noted in the post

    Quote Originally Posted by bazie View Post
    I disagree with your discussion of amazon on two contradicting points

    1) You do not mention the bias of it being an online only store which will have different trends then in B&W stores. This is evidence by the backwards order of spiderman 3 and spiderman 3 box set.

    2) That said, to dismiss that rankings as "meaningless" is very short sited. Amazon provides a good comparison between movies released on both formats for instance. Or it is pretty reliable to say ratatoulie will better then cars given how ratatoulie has had a higher sales ranking the entire time. And there are many somewhat stable benchmarks in both the HDM and DVD that you know approximately the sales figures will be and can compare what range a given title is likely selling. The problem is when people naively look at the sales ranking and confusing them with sales figures. But with some intelligent thinking, they CAN be useful
    Noted

  11. #11
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    Videoscan paragraph
    Last sentence:
    There is a list of the next five units of each that did not make the top ten
    Actually, those are the top 5 for each format relative to their #1.
    Each top five is given a number. #1 always receiving a 100, subsequently #2-#5 receive a number less than 100 which indicates the volume sold relative to #1
    A Movie Request to Hollywood:
    "The Raid" - based on the book by Benjamin F. Schemmer.
    It is the true story of the U.S. Special Forces raid on the Son Tay prison camp located 23 miles from Hanoi, in an effort to rescue 70 POWs on Nov. 21, 1970.
    http://en.wikipedia.org/wiki/Son_tay_raid

    The raiders were led by SF legends Col. "Bull" Simons and Maj. Richard Meadows.
    Both men are memorialized with statues at Ft. Bragg, N.C.

  12. #12
    spicynacho's Avatar
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    Quote Originally Posted by cuco33 View Post
    Nice job

    I think one thing that stands out is the attachment rate. How can someone know usage per console/PC? Estimating these values means attachment rates are estimates themselves.
    I put a note on the attach rate section, I haven't updated it yet because there are several threads discussing this. Once I see how these turn out, I will update it to reflect the best judgement of the forum.

  13. #13
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    BUMP... When can we make this a sticky?
    I am officially BLU.

  14. #14
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    Good job! This should be a sticky so new members don't have to start threads about DVD Empire on Mondays or Tuesdays or posts asking if Amazon.com is included or not in Nielsen VideoScan.

    It should be mentioned that DVD Empire use the first day in the week which the numbers are for as lable instead of the last as all the other sources.

    The sources included in Nielsen Video scan should be listed. We don't have all but links mention Amazon.com, BestBuy and Blockbuster for example. 60-70% is tracked by Nielsen Videoscan, HomeMediaMagazine sales data group use their numbers and other information from retailers and historic data to calculate the total amount of sold discs.

    Hardware sales are usually tracked by NPD Group.

    For Europe and the rest of the world outside USA it't usually GfK that tracks both hardware and software.
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  15. #15
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    BUMP... please sticky it.
    I am officially BLU.

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