International Blu-ray sales - 2009 Blu-ray sales in France cover DVD sales attrition

[Kosty]

You can't have it both ways. Catalogs can't be a smaller and smaller part of business in terms of dollars and be solely responsible for massive declines in revenue. If new releases dominate revenues, they would have to play a role in large slides in sell through revenue.

Sure it can.

Catalog sales can still be a dominant part of DVD revenues even if their is not a lot of profit in that component and that portion of revenues is decreasing because of lower prices for the catalog DVD units that are sold. That is a lot of the overall DVD revenue decline is due simply to the fact that retailers have reduced the average price of a DVD catalog title and that the same amount or even more catalog DVD unit sales produce overall less revenue than they did before.

But if top 20 or current releases are doing better, thats where the retailer and studio profit is concentrated and if Blu-ray can sustain that day and date sales revenue thats far more important than the overall DVD sales revenue stream which overemphasizes DVD sales that are long off the studios books and are only modest profit generating sales for retailers.

[Kosty]

We'll see soon enough. 2008 has 8 weeks left in it, more or less.

I fully agree with you on this point.

[motion]

2008 doesn't have any weeks left in it. 2009 on the other hand!

[Grubert]

Originally Posted by comixguru

Good news for Blu, but it is a minor point. US DVD sales are off by -16% while French DVD sales are down -2.8%.

That's because we don't have €1 rentals over here.

And discs are so cheap that it's often better to buy the discs.

[KYThrill]

Originally Posted by comixguru

Your optimism and graphs are endless, Kosty. I don't buy it, yet. I don't see what you see.

I see six quarters of declines in sell-through. VB/DEG reports show Blu-ray YoY growth slowing and no end to overall decline in physical sell through. With Blu-ray release numbers up and up, and prices down and down... growth is slowing?

Q1 2008 - 400% to 500% growth in high-def disc sales
Q2 2008 - up about 300%
Q4 2008 - year end numbers show 177% growth overall
Q1 2009 - Blu-ray up 100%
Q2 2009 - up 91%
Q3 2009 - Blu-ray sales rose 66.3%

As for new DVD releases, last Q4 Sony said new release sales were down 15%. We've seen 3 additional bad quarters and no indication that new releases have made any turn around. What we are seeing is that some titles still perform well, but overall new releases are down.

I think Q4 will be big as always, with Blu-ray certainly going up. But I don't believe it will staunch the bleeding this year, or even through most of next year.

Seriously... you are really making that arguement. Oh no, last year you grew by ~2.5X's and this year you are only going to grow by 2X. Oh no, growth is slowing, Blu-ray must be a horrible format and going to fail. I mean next year they will only grow by 1.75X and then just 1.6X the year after that. Their growth will continue to slow to 1.5X the next year, and then to a measly 1.3X the year after that. Yep growth will just continue to slow and slow...

Oh wait, It's an $8.19B industry by that point and is still growing, but more slowly. Boy, that slow down in growth really seems to be hurting the format...

You have not seen 6 straight quarters of decline in sell through. You have seen 6 quarters of decline in the rate of increase of sell through. But the key is, it is still inreasing, not declining. It's just not increasing as fast as it was before (I know shocking since this is the worst economy in 25 years). FYI, Q3 2008 was $97M sell through. Q3 of this year was $161M. If there were 6 straight quaters of delcine in sell through, as you claimed, this Q3 would had to have been less than a $97M sell through.

It's easy to take $1 and turn it into $2. It's a whole different thing to take $1B and turn it into $2B. Growth will always slow as your market gets larger. Growth only appeared so high to begin with because the market was so small. Of course rate of growth is going to decline. DVD did the same thing. It grew year after year, but at a lower rate each year. Then it leveled. And now it is in decline. That's called normal product life cycle...

[Lee Stewart]

Originally Posted by KYThrill

Seriously... you are really making that arguement. Oh no, last year you grew by ~2.5X's and this year you are only going to grow by 2X. Oh no, growth is slowing, Blu-ray must be a horrible format and going to fail. I mean next year they will only grow by 1.75X and then just 1.6X the year after that. Their growth will continue to slow to 1.5X the next year, and then to a measly 1.3X the year after that. Yep growth will just continue to slow and slow...

Oh wait, It's an $8.19B industry by that point and is still growing, but more slowly. Boy, that slow down in growth really seems to be hurting the format...

You have not seen 6 straight quarters of decline in sell through. You have seen 6 quarters of decline in the rate of increase of sell through. But the key is, it is still inreasing, not declining. It's just not increasing as fast as it was before (I know shocking since this is the worst economy in 25 years).

It's easy to take $1 and turn it into $2. It's a whole different thing to take $1B and turn it into $2B. Growth will always slow as your market gets larger. Growth only appeared so high to begin with because the market was so small. Of course rate of growth is going to decline. DVD did the same thing. It grew year after year, but at a lower rate each year. Then it leveled. And now it is in decline. That's called normal product life cycle...

A small fly in the ointment . . .

DVDs metoric growth was from 1999 to 2006 - a period of 7 years - then it plateaued in 2006 and has been on the decline ever since. the most successful home video format - revolutionary when compared to it's replacement - VHS.

So we can see that the life cycle is shortening for home video products because VHS enjoyed more than 2X that time span. Which we can conclude that BD will be even shorter than DVD because it is a evolutionary product and not a revolutionary one.

The stats:

http://www.dvdinformation.com/News/p...009yearEnd.htm

[KYThrill]

Originally Posted by Lee Stewart

A small fly in the ointment . . .

DVDs metoric growth was from 1999 to 2006 - a period of 7 years - then it plateaued in 2006 and has been on the decline ever since. the most successful home video format - revolutionary when compared to it's replacement - VHS.

So we can see that the life cycle is shortening for home video products because VHS enjoyed more than 2X that time span. Which we can conclude that BD will be even shorter than DVD because it is a evolutionary product and not a revolutionary one.

The stats:

http://www.dvdinformation.com/News/p...009yearEnd.htm

Your link just proves my point even more. In 2000, DVD increased 312% over 1999. In 2001, it increased 272%. In 2002, 171%. In 2003, 139%. And so forth and so on.

DVD was the most successful format to date, and it experienced a decline in growth year after year, the same as we have seen with Blu-ray. Comixguru is trying to point this out as something negative against Blu-ray, when in fact, it is entirely normal, and the same thing happened with DVD.

I never said Blu-ray is as successful as DVD and made no guess as to if it would ever be. But the fact that its growth is declining means nothing.

However, DVD saw massive decreases in the rate of growth going into years 5 and 6 (dropping from 272% to 171% and then to 139%). If Blu-ray can buck that trend and see more modest decreases in the rate of growth in 2010-2012, then in the end, it could actually end up being a more successful format than DVD. There are still alot of what ifs left to play out. If BD follows DVD's rapid drop in growth, then it will never be as successful, because it did not grow as fast initially. However, if it starts smaller, but has a signifigantly slower drop in rate of growth, it is possible BD could equal or exceed the revenue of DVD.

[comixguru]

Originally Posted by KYThrill

Seriously... you are really making that arguement. Oh no, last year you grew by ~2.5X's and this year you are only going to grow by 2X. Oh no, growth is slowing, Blu-ray must be a horrible format and going to fail. I mean next year they will only grow by 1.75X and then just 1.6X the year after that. Their growth will continue to slow to 1.5X the next year, and then to a measly 1.3X the year after that. Yep growth will just continue to slow and slow...

Oh wait, It's an $8.19B industry by that point and is still growing, but more slowly. Boy, that slow down in growth really seems to be hurting the format...

You have not seen 6 straight quarters of decline in sell through. You have seen 6 quarters of decline in the rate of increase of sell through. But the key is, it is still inreasing, not declining. It's just not increasing as fast as it was before (I know shocking since this is the worst economy in 25 years). FYI, Q3 2008 was $97M sell through. Q3 of this year was $161M. If there were 6 straight quaters of delcine in sell through, as you claimed, this Q3 would had to have been less than a $97M sell through.

It's easy to take $1 and turn it into $2. It's a whole different thing to take $1B and turn it into $2B. Growth will always slow as your market gets larger. Growth only appeared so high to begin with because the market was so small. Of course rate of growth is going to decline. DVD did the same thing. It grew year after year, but at a lower rate each year. Then it leveled. And now it is in decline. That's called normal product life cycle...

I'm talking to two points --

1. Overall Sell Through (DVD + Blu-ray)

I see 6 quarters of decline in sell-through. That's all sell-through. The percentage of SD DVD decline growing, down over $1B over last year. Blu-ray is countering some of that.

2. Blu-ray rate of Growth

Blu-ray is going to grow, I'm not saying it isn't. Blu-ray growth appears to be slowing. The rate of growth slowing as prices drop and releases accelerate is counter to what I'd expect.

Blu-ray Stats Release numbers
2008 - 638
2009 - 930 (year to date +45% YoY)

There's like 300 extra titles out this year on the format, with 2 months of the biggest releases left to go (another 200 more titles I would hazard to guess.). That's nearly twice the release count by EoY.

Prices are down, too. There's tons of sales at $9.99-14.99 now. Walmart, Target, Best Buy have titles every week in the range. This was not common last year.

And the rate of growth is slowing so far.

Q4 is more critical than ever.

[comixguru]

Originally Posted by KYThrill

Your link just proves my point even more. In 2000, DVD increased 312% over 1999. In 2001, it increased 272%. In 2002, 171%. In 2003, 139%. And so forth and so on.

Yeah, that's what happens when a product matures in it's sales cycle and adoption slows.

It's possible for a product to languish and slow for a period then break out again, and start a steep climb. It's possible looking at quarterly changes is too macro... considering how big Q4 is in this industry.

[ack_bak]

Originally Posted by comixguru

Yeah, that's what happens when a product matures in it's sales cycle and adoption slows.

It's possible for a product to languish and slow for a period then break out again, and start a steep climb. It's possible looking at quarterly changes is too macro... considering how big Q4 is in this industry.

Well it is also a by-product of the amount of revenue dollars we are talking about here. When a procuct makes $100 a year a 100% jump would bring it up to $200 million a year. If the product then had an 80% jump the next year, it would actually be bringing in more revenue than the year before but would appear to have smaller growth based on percentages.

I think the best measurement would be in terms of revenue dollars.