How HV sales used to turn big box office hits into massive box office GIANTS

[kowhite]

Kowhite....do it for Johnny.

I'd do it for you Baumer.

Who the hell is Johnny.

[kowhite]

That BR number must be wrong.

It was probably right in 2007.

[baumer]

I'd do it for you Baumer.

Who the hell is Johnny.

Sorry. Old movie line. Outsiders.

[Plain Old Tele]

Kowhite....do it for Johnny.

Sweep the leg, Kowhite.

[jb007]

 

 

 

 

[grim22]

I remember the format wars between HD-DVD and Blu-Ray, even though Blu-Ray ended up winning it didn't actually benefit a lot from it unlike Betamax vs VHS. For one, a lot of consumers moved towards digital downloads and piracy and Blu-Ray players were prohibitively expensive around 2008.

[jb007]

I think 2004 was the year that VHS sales pretty much came to screeching halt. Top movies like Shrek 2 sold about 2 million VHS units and made $25 mil.

Edited January 3, 2015 by jb007

[kowhite]

Sweep the leg, Kowhite.

These quotes... I'm sitting here thinking you're quoting Mortal Kombat.

[TServo2049]

Funny story: An unsold DVD of Shrek 2 has been sitting in my local Rite-Aid for almost a decade. Nobody has ever bought it.

They also had some VHS tapes sitting on the top shelf, faded from constant exposure to the fluorescent lights, until the early 10s. They eventually disappeared at some point.

Edited January 3, 2015 by TServo2049

[jb007]

 

[jb007]

Shrek was a mega monster on HV (VHS+DVD). According to a quarterly report from Dreamworks, Shrek had sold more than 50 Million Home Video units. 

 

To boost DVD sales, Mr. Katzenberg has courted one of the nation's most influential retailers, Wal-Mart Stores Inc., and its chief executive, Lee Scott, with frequent calls and visits to the company's Bentonville, Ark., headquarters. That paid off in 2001, when the studio's original "Shrek," with strong support from Wal-Mart, became one of the biggest-selling movies. To date, "Shrek" has sold more than 50 million copies in DVD and video world-wide.

 

 

http://www.wsj.com/articles/SB111749009146946457

Edited January 3, 2015 by jb007

[forg]

I'm assuming digital sales in the US are not that big because in the music industry even if CDs are on sharp decline in the last 5 years or so, there are still more CDs sold each week than digital albums. And digital sales are on decline now as well with streaming gaining ground

 

I know Netflix streaming is a big there in the US, don't they have any data?

Edited January 3, 2015 by forg

[jb007]

And even with those stellar Shrek 2 sales, DreamWorks' stock dropped because they had forecast even bigger numbers they didn't reach: http://www.wsj.com/articles/SB111749009146946457

And I didn't know (or had forgotten) that The Lion King 1 1/2 sold that well. My god.

+1

 

Shrek 2 sales were misjudged. By the first quarter of 2005, it had sold 35 Million units instead of the projected 40 Million units. But 35 Million units was still a monster number though not as good as Shrek's 50 million units.

 

But when DreamWorks reported first-quarter results on May 10, the company said it had sold a total of 35 million units, not 40 million.

 

http://www.wsj.com/articles/SB111749009146946457

[baumer]

Sweep the leg, Kowhite.

You gotta a problem with that Mr. Lawrence?

[baumer]

These quotes... I'm sitting here thinking you're quoting Mortal Kombat.

Think Cranes

Wax on

Cruel summer by Bananarama

Mercy is for the weak

You pretty okay too

[MrPink]

I'd do it for you Baumer.

Who the hell is Johnny.

 

DO IT HANSEL

 

[jb007]

Home video is both more complex and more profitable. With the advent of the DVD, home video has become a vast retail business, with studios selling both new and past titles, as well as television programming such as The Sopranos, Friends, or Chappelle's Show, at wholesale prices that can go as low as $5 a DVD. Studios, which have meticulously analyzed these costs, estimate that manufacturing, shipping, and returns costs average 12.4 percent; marketing, advertising, and returns costs average 18.5 percent; and residuals paid to guilds and unions for their members and pension plans come to 2.65 percent. So, about two-thirds of video revenues are gross profits (which participants, such as stars, producers, and directors, may share in once the movie breaks even). In 2004, the studios' estimated video gross profit was $13.95 billion.

 

 

http://www.slate.com/articles/arts/the_hollywood_economist/2005/08/hollywoods_profits_demystified.html

 

I found this article which I remember reading when it was first published. So according to this, the cost is one-third and the gross profits are two-thirds of HV gross revenue. Hopefully some industry insider can back this up or give their valuable input on this. I was assuming the cost was two-thirds and Studio gross profit was one third. It looks like it is other way around.

 

BTW this model may have changed with declining dvd sales (incl. Blu-Ray) compared to pre 2006 period. The HV market now includes digital sales etc. It would be interesting to get an overview of HV revenue as it stands today. 

[Walt Disney]

I'd do it for you Baumer.

Who the hell is Johnny.

 

He was the All Valley Karate Champion. But, you should refer to him as Mr. Lawrence.

[Walt Disney]

That s why Disney got so big.

They had the home video sales from their renaissance titles plus all their back catalogue. All these titles had 3 releases, vhs, dvd and blu ray.

 

 

While that helps, I think they got so big because they released tons of major box office successes, some through their historical WDAS, and some through acquisitions.

Oh and...they bought ESPN (let's get real, that's where most of their profit comes from).

 

Both are true. Disney, having survived a few hostile takeover attempts, hired Michael Eisner. Eisner knew the movie industry very well and he was able to build Disney into a major film studio. Home video was definitely a huge moneymaker because there was this invention that you kids may not remember called a VCR. A VCR allowed people to watch movies on a VHS Tape from the luxury of their own homes. This was revolutionary at the time. However, not many movies were on VHS, so as VCRs became more popular, there was a demand for movies. Eisner was able to leverage Disney's back catalogue into big money by being one of the first to release old Disney movies on VHS. Before that time, back catalogues were only good for re-releasing movies or remaking movies.

 

Also, to Kowhite's point, under Eisner, Disney began to make more movies. They were releasing movies under their Walt Disney Pictures banner, Touchstone banner, and Hollywood Studios banner. They tried to release more than just family entertainment. However, they did release more WDAS animated films as well. Eisner and Kaztenberg wanted to shut down WDAS, but when they saw the success of An American Tale, they decided to make more animated films. They also realized that they could release these new animated films on VHS, since VHS was making them so much money through their back catalogue. The larger number of movies were successful and turned Disney into a major studio.

 

Lastly, Disney expanded their theme parks and made lots of money off of this expansion.

 

Those are the 3 reasons why Disney became so big. Home video, making more movies, and theme park building and expansion. Disney did buy ABC, which was a game changer, but they were already big by the time they made that purchase. ESPN was included in that purchase, but no one expected it to be as important as it has become.

 

If this is too off-topic, you can move it to the Classic Convo. thread, Tele.

[terrestrial]

That BR number must be wrong.

 

According to their lists:

DVD's released in 2006

Blu-Ray in 2011

 

I checked at FilmAF.com (former DVDaficionado.com) the US release dates, as they are pretty good with those release details, no Blu-Ray before 2011, so I think The Numbers had it right as far as the dates go.

 

How accurate The Numbers are with DVD... sales I do not know, but they are not the best with updates (slow for cerrtain details). If I give them hints e.g. missing (main) producers or so, it takes up to 6 months to correct them, but they do correct them (at least all hints I provided) and always aknowledge the hints via mail.

 

The most will not buy twice