You must live in a VERY small town. I can buy DVD's just about anyplace I go. Drug Store, Grovery Store, Gas Station, BlockBuster, The Mall...and then there arer the other chain stores and Electronic Stores. DVD's are for sale everywhere, sure most of them are new releases but if I'm looking for something that I can't find then I just go on line to Amazon and its a few clicks away, or I can always order it from BlockBuster which is one of the only national chains that may have more stores than WallMart.
I do. It's called New York City.
I'm only repeating what I've read in the business sections of the NYTimes and the WSJ.
Most people still do not shop on the internet. Internet shopping is no more than 5% of shopping going on during the holidays.
Most people also make a immediate decision about buying DVD's. This is why WalMart sells so many. People who go there for other goods, walk by the DVD aisles, and buy whatever interests them with a glance. They just pop it into the cart.
Well this is unsubstantiated as well. You haven't shown how much revenue these smaller studios are getting from DVD sales much less shown that they'd "go belly up within a few months" as you assert. New Line Cinema had $2.9 billion worldwide box office receipts from the three LOTR movies alone. Not to mention that New Line, while an "independent" film company is a unit of Time Warner.
Actually we do. They get listed in Variety, and even the NYTimes lists the sales numbers of the top videos being bought every week, as well as the rental volumes of them. Companies talk about the sales, both primary, as well as secondary.
You can get a good idea from a multitude of sources. just type DVD sales into Google.
Financial data can be found in the quartly reports where they break it down.
9quote]
The independents are largely defunct anyway. New Line is the last of the Orion, Carolco, Cannon pack and not so independent anyway as part of TW.[/quote]
It depends on what is meant by "studio". there are many small companies.
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This from someone who can state that New Line is in danger of closing if Walmart pulls out of the DVD market without knowing they are a unit of TW? Or that they made $2B revenue off the LOTR box off alone?
I know where they are from. But, you should look up their financing. The concern is that they have nothing else on board that will come close to "Ring" in sales. that was a *very* lucky anomaly for them.
{quote]
Besides, in 2004 movies gnerated $36B in revenues and sellthough of VHS and DVD was $16B.[/quote]
Actually we do. They get listed in Variety, and even the NYTimes lists the sales numbers of the top videos being bought every week, as well as the rental volumes of them. Companies talk about the sales, both primary, as well as secondary.
You can get a good idea from a multitude of sources. just type DVD sales into Google.
You don't actually show anything on these links other than most popular DVDs and revenue for one particular movie.
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Financial data can be found in the quartly reports where they break it down.
You're making the assertion that New Line would go belly up in a matter of months without Walmart revenue. Therefore its on your shoulders to break down the quarterly reports or this is, as you put it, an unsupported statement.
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The independents are largely defunct anyway. New Line is the last of the Orion, Carolco, Cannon pack and not so independent anyway as part of TW.
It depends on what is meant by "studio". there are many small companies.
You specifically mentioned New Line.
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I know where they are from. But, you should look up their financing. The concern is that they have nothing else on board that will come close to "Ring" in sales. that was a *very* lucky anomaly for them.
Again, it's your unsupported assertion that they would go belly up. I'm not looking at anything but the same kind of thing you accuse MacGregor of.
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Besides, in 2004 movies gnerated $36B in revenues and sellthough of VHS and DVD was $16B.
Who's got what facts wrong? Why should we believe your other figures either?
You still do.
I'm talking about US revenue. The iTunes store isn't even close to going international. We have to get it working here first.
You never mention US revenue only. Even given this change, if Walmart only controls $2B of $36B in revenue they don't have quite the industry ending impact that you say they do.
You are also not really correct about the relative sizes of GE and Walmart. Walmart my have twice the revenue but GE has higher gross profit (82B vs 79B), much larger market cap ($366B vs 198B) which is how most folks measure size of a company since revenue varies from industry to industry and also a much larger enterprise value ($759B vs $232B). By most measures Walmart is far smaller than GE and also makes less profit.
You also changed your opinion that Walmart could drive all studios out of business to "just some independents".
This is your original statement:
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If WalMart, and others are able to back their threats up with action, then the studios can't resist for long.
Not only will investors become upset, and dump their holdings, which would be a disaster, but the companies would pour red ink, which would make it impossible to negotiate, and produce new features.
They then would be out of business.
No caveat of small studios. Just studios in general. You've been backpedalling ever since.
Either way you're full of "unsupported statements" and "logical flaws". Not only is Walmart only 5% of the revenue stream you assume that none of that revenue will be recouped by other channels. Walmart's threat, if executed, would hurt profits but there is no data to show that any studio would be pouring red ink and going out of business (at least if it wasn't doing so at the moment).
You don't actually show anything on these links other than most popular DVDs and revenue for one particular movie.
with information, you can see exactly what you have been looking for. How much DVD sales mean to any company, including New Line, which you asserted didn't have much revenue from them.
with a little thought, you can also go to the quartly reports of those companies, as I also mentioned, for more information, such as actual numbers from those sales.
Actually, with a little arithmetic, you could get some approximations yourself seeing average selling proced for those DVD's.
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You're making the assertion that New Line would go belly up in a matter of months without Walmart revenue. Therefore its on your shoulders to break down the quarterly reports or this is, as you put it, an unsupported statement.
I'm not saying the WOULD, I'm saying they could.
I don't have to get into your unecessery confusion. If you don't know how the industry works, fine.
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You specifically mentioned New Line.
Yes, I did. That's because they have always been singled out in financial articles about the industry, as being one of the most vulnerable to one big flop.
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Again, it's your unsupported assertion that they would go belly up. I'm not looking at anything but the same kind of thing you accuse MacGregor of.
Well then, prove me wrong!
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You never mention US revenue only. Even given this change, if Walmart only controls $2B of $36B in revenue they don't have quite the industry ending impact that you say they do.
I thought that you were coming into this as well informed, so that you would know what the numbers stood for. I apologise.
But, you miss the idea that the rest of the world doesn't matter yet. If the battleground in the US is lost by either side, then it could be over.
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You are also not really correct about the relative sizes of GE and Walmart. Walmart my have twice the revenue but GE has higher gross profit (82B vs 79B), much larger market cap ($366B vs 198B) which is how most folks measure size of a company since revenue varies from industry to industry and also a much larger enterprise value ($759B vs $232B). By most measures Walmart is far smaller than GE and also makes less profit.
WalMart is in an entirely different industry. WalMart sells many GE products. That gives them leverage as well, and I'm sure GE knows it. WalMart could push customers to other brands if they wanted to.
The small difference in profit, and the difference in the other financial numbers have nothing to do with this at all.
Neither company is in danger of financial problems, and neither is being looked to as a target. Both have much muscle.
But the seller is always in the drivers seat if they are big enough. And no one is larger.
quote]
You also changed your opinion that Walmart could drive all studios out of business to "just some independents".
This is your original statement:
No caveat of small studios. Just studios in general. You've been backpedalling ever since.
Either way you're full of "unsupported statements" and "logical flaws". Not only is Walmart only 5% of the revenue stream you assume that none of that revenue will be recouped by other channels. Walmart's threat, if executed, would hurt profits but there is no data to show that any studio would be pouring red ink and going out of business (at least if it wasn't doing so at the moment).
Vinea[/QUOTE]
Yes, I did say that. But you rarely see the forest but for the trees. I also said that I thought that before it got that far, there would be an agreement.
I don't believe than any studios would really allow any chance of that happening.
But, it is a worst case scenario. I don't think anyone would be stupid enough to allow it to get far enough into it. But, stranger things have happened.
But, all sides want to protect their turf, and for now, it's the studios who are running scared.
with information, you can see exactly what you have been looking for. How much DVD sales mean to any company, including New Line, which you asserted didn't have much revenue from them.
I haven't asserted anything except that your statements are equally unsupported.
While DVD's do mean a great deal of revenue for studios you haven't shown that New Line is within months of going belly up given a 5% revenue hit.
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with a little thought, you can also go to the quartly reports of those companies, as I also mentioned, for more information, such as actual numbers from those sales.
Actually, with a little arithmetic, you could get some approximations yourself seeing average selling proced for those DVD's.
As I said, you're making unfounded assertions so the burden is on you to support them.
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I'm not saying the WOULD, I'm saying they could.
I don't have to get into your unecessery confusion. If you don't know how the industry works, fine.
Neither evidently do you because you can't seem to bring together either a coherent argument or find facts to back up your nebulous claims.
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Yes, I did. That's because they have always been singled out in financial articles about the industry, as being one of the most vulnerable to one big flop.
Well then, prove me wrong!
Again, you castigated MacGregor for unsupported statements. So either a) it is your job to prove his unsupported statements wrong (in which case your comment makes no sense) or b) you owe him an apology.
In any case, it's not my job to prove anything. I'm not making unsupported assertions about anything but your hypocracy, rudeness and lack of logic.
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I thought that you were coming into this as well informed, so that you would know what the numbers stood for. I apologise.
BS. The $2B and $5B comes from where? Nowhere is there a reference. It also doesn't tally with the referenced published world wide revenues given the rough percentages of US vs WW sales or that Walmart controls 40% of US sales. Are you stating for the record that US DVD revenue is only $5B out of $16B? Source please.
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But, you miss the idea that the rest of the world doesn't matter yet. If the battleground in the US is lost by either side, then it could be over.
So you're saying that when one multinational corporation is trying to drive a multinational industry to capitulate at the bargining table ONLY US revenue stream matters? That's one of the dumbest thing you've said yet.
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WalMart is in an entirely different industry. WalMart sells many GE products. That gives them leverage as well, and I'm sure GE knows it. WalMart could push customers to other brands if they wanted to.
Walmart IS an entirely different industry which is why market cap is a better measure of size vs revenue. Something you refuse to acknowledge. As far as Walmart attacking GE directly are you serious? They're going to try to hurt every multinational corporation that owns a studio by not carrying any of their products? No Sony, no GE, etc?
That's not leverage...that's suicide.
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The small difference in profit, and the difference in the other financial numbers have nothing to do with this at all.
Neither company is in danger of financial problems, and neither is being looked to as a target. Both have much muscle.
Certainly it has something to do with your incorrect assertion that Walmart is larger than GE as a company with more staying power. Those numbers refute your assertion that Walmart is twice GE's size. They have twice the revenue stream but make less money.
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But the seller is always in the drivers seat if they are big enough. And no one is larger.
And DVD revenues for GE are equally as important or unimportant as they are to Walmart. A small portion of their total revenue and profit stream.
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Yes, I did say that. But you rarely see the forest but for the trees. I also said that I thought that before it got that far, there would be an agreement.
I don't believe than any studios would really allow any chance of that happening.
Forest for the trees? You assert that Walmart has the ABILITY to shut studios down. Folks are saying YOU'VE GOT NO TREES in your forest. Walmart has the ability to hurt studios, not bring the industry to its knees.
The studios don't come to an agreement because they fear for their existance...they do so to maximize short term profits (xmas).
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But, it is a worst case scenario. I don't think anyone would be stupid enough to allow it to get far enough into it. But, stranger things have happened.
But, all sides want to protect their turf, and for now, it's the studios who are running scared.
The whole point is that your worst case scenario is unsupported by either logic, supporting evidence or sense. No one is arguing that Walmart doesn't have significant leverage over the studios. Just not life or death control. But you refuse to ever say you were wrong even when we can quote you saying something stupid but you freely insult others.
Yes, I did. That's because they have always been singled out in financial articles about the industry, as being one of the most vulnerable to one big flop.
New Line actually is not that small. Its called a mini-major studio and has a couple of smaller development and distribution studios under it, Fine Line Features and Picturehouse.
New Line is doing fine for the most part and it does have movies that flop. The problem would come from having a string of flops. That's the same problem for any studio.
I'm sure New Line does not on its own fully finance physical production for most of its movies. Fine Line Features and Picturehouse mostly acquire films for distribution which insulates New Line from heavy financial losses from any flops.
New Lines gross was $412.6 million in 2005 up 13% from 2004. The Wedding Crashers was New Lines highest grossing movie in 2005.
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But, all sides want to protect their turf, and for now, it's the studios who are running scared.
Their is a lot more at stake than only Walmart. Online distribution is an entirely new business model and they are approaching it with great caution. There was little need for the studios to quickly jump into bed with Apple.
Walmart blinked and its bluff was called when it threatened to cut orders of the Disney movie "High School Musical". But did nothing to Disney for working with Apple. It would have been much easier for Walmart to cut orders for this one movie as an example of its sincerity.
But seeing that Walmart did nothing shows Walmart really does not want to upset the waters. If they all decide to work with Apple its extremely unlikely Walmart will go against them all.
Its clear at this point that the studios want Christmas to go on as normal and begin the new year with online distribution. Which works fine for Apple. Apple will be able to hype its expanded movie selection along with the introduction of iTV.
I'm hoping this line of discussion fades quickly and goes back to the topic of Apple branded TV's which seems to be improbably for now. I agree with the person who said that until data rates and standards become more standard, that perhaps adding a $100 mobo into a $3000 TV doesn't make too much sense. I DO think though that we are within 5 years of getting rid of all these stupid boxes for cable, cable phones, wifi and everything else except for gaming and perhaps DVD's of whatever generation. At least Apple looks like it wants to compete for the day when there is only one box.
As for the melodramatic debate with melgross re WalMart vs. the Studios, I just have a few comments:
1. Movies are not like wrist watches. Walmart can force Chinese companies to cut prices on commodities, because another factory down the road can make the same watch and take up the slack. There aren't any factories that can crank out Spiderman 4 or LOTR: Megacollector's Edition. DVD's act like commodities, only when they are those cheap back catalog titles that you see near the check out stand. Movies are a creative industry and don't follow simplistic economic models.
2. Contracts to sell DVD's are more like the stockmarket (rather than the commodities market) in that they are based on future sales and future content. The studio's main ace in the hole is their ability to produce FUTURE blockbusters - except for Disney which of course has a huge back library of movies that it can turn on and off like a faucet.
3. Melgross' analogy to this as a "war" between Walmart and the studios, doesn't quite fit. This is a tough negotiation between suppliers and distributers and they don't really fight that way.
4. The larger the corporation, the more it is averse to conflict or change. Big Walmart and Big Studios accomodate each other more than they fight each other. GE and all ride the Walmart gravy train (like I said above) because that is the easiest thing to do as long as profits keep coming in. Once the studios see profits fall for optical media sales, they will look to change the business model and not really before.
5. I sort of fell into the argument with melgross, because it bugs me when people make statements about economics based upon Chapter One of a Business 101 class as if real life worked that way. It doesn't.
6. Melgross is correct about collusion occuring in many industries, from retailers to oil companies, but that only works when there is a cartel or when members of the industry are few and of the same size. This is not true with Walmart and other sellers of DVD's. There is no way Target or others would join Walmart in some kind of boycott of movie studios. Target would love to see Walmart give up that market! Then Walmart would have several million DVD's sitting in warehouses around the country taking up space in their "just in time" inventory lines. These DVD's would sit there until Walmart gave up or sold them at a loss to Target.
7. The movie industry is not precarious or under threat, individual studios and distributers are
8. I used the $5B number from a previous poster (I thought it was you melgross) that claimed knowledge. The actual number is not as important as the relative number to total sales.
9. Vinea is right in highlighting the importance of the non-American market. It is huge for many titles every year. Chuck Norris is better known in Thailand than he is here. Since Walmart has no international footprint, it would have little effect on that large part of the studio's DVD revenue stream.
10. No one changes horses just before the holiday buying season, so Walmart and studios are just testing the water and nothing was going to happen until the new year anyway.
11. Walmart blinked. Walmart can afford to blink, more than it can afford to fight when there is no real reason to.
12. Melgross: you are a good guy and I've agreed with you many times in the past and I've even modified my opinions based upon some of your comments, but I think you may be stuck in an overly simplistic view of the economy and in the real "power" of corporations. Fundamentalistic viewpoints often require a certain lack of breadth in framing issues, an over-reliance on "rules" or "authority" and self imposed limitations on inquiry. Think Different.
13. Walmart, Dell and MS run on inertia and in marketing incessantly to create mindshare that needs to be maintained, because nothing is stopping someone else from replicating their business plans and there is no real place to go from where they are now except down - until of course Walmart Paris opens. MS of course does have an innovation role as well, which makes it such an interesting case study.
14. I stand by my earlier assertions that Apple does not require rapid growth. It can actually survive slower rates of growth because its margins are relatively large compared to the Walmarts and Dells of the world AND because its stockholders don't expect dividends or target prices as much. The new investors that have bought Apple stock over the last few iPod years obviously may force some changes to some of those dynamics external to the company, but I doubt that overwhelmingly affects internally Apple or Steve's long range goals. If he can just keep Macs on a steady increase and if iTunes holds its own with moderate increases in video, I think that is what keeps it relevant in the industry. Innovation is its driving force. Steve said it best when he said that Apple was the most creative tech company and Pixar was the most technical creative company (major paraphrase).
Sorta back to the topic ....
With the inroads that the XBox and PS3 will have for playing DVD's and downloading media, I hope Apple has more than just the iTV in mind.
I haven't asserted anything except that your statements are equally unsupported.
While DVD's do mean a great deal of revenue for studios you haven't shown that New Line is within months of going belly up given a 5% revenue hit.
As I said, you're making unfounded assertions so the burden is on you to support them.
Neither evidently do you because you can't seem to bring together either a coherent argument or find facts to back up your nebulous claims.
Again, you castigated MacGregor for unsupported statements. So either a) it is your job to prove his unsupported statements wrong (in which case your comment makes no sense) or b) you owe him an apology.
In any case, it's not my job to prove anything. I'm not making unsupported assertions about anything but your hypocracy, rudeness and lack of logic.
BS. The $2B and $5B comes from where? Nowhere is there a reference. It also doesn't tally with the referenced published world wide revenues given the rough percentages of US vs WW sales or that Walmart controls 40% of US sales. Are you stating for the record that US DVD revenue is only $5B out of $16B? Source please.
So you're saying that when one multinational corporation is trying to drive a multinational industry to capitulate at the bargining table ONLY US revenue stream matters? That's one of the dumbest thing you've said yet.
Walmart IS an entirely different industry which is why market cap is a better measure of size vs revenue. Something you refuse to acknowledge. As far as Walmart attacking GE directly are you serious? They're going to try to hurt every multinational corporation that owns a studio by not carrying any of their products? No Sony, no GE, etc?
That's not leverage...that's suicide.
Certainly it has something to do with your incorrect assertion that Walmart is larger than GE as a company with more staying power. Those numbers refute your assertion that Walmart is twice GE's size. They have twice the revenue stream but make less money.
And DVD revenues for GE are equally as important or unimportant as they are to Walmart. A small portion of their total revenue and profit stream.
Forest for the trees? You assert that Walmart has the ABILITY to shut studios down. Folks are saying YOU'VE GOT NO TREES in your forest. Walmart has the ability to hurt studios, not bring the industry to its knees.
The studios don't come to an agreement because they fear for their existance...they do so to maximize short term profits (xmas).
The whole point is that your worst case scenario is unsupported by either logic, supporting evidence or sense. No one is arguing that Walmart doesn't have significant leverage over the studios. Just not life or death control. But you refuse to ever say you were wrong even when we can quote you saying something stupid but you freely insult others.
Comments
You must live in a VERY small town. I can buy DVD's just about anyplace I go. Drug Store, Grovery Store, Gas Station, BlockBuster, The Mall...and then there arer the other chain stores and Electronic Stores. DVD's are for sale everywhere, sure most of them are new releases but if I'm looking for something that I can't find then I just go on line to Amazon and its a few clicks away, or I can always order it from BlockBuster which is one of the only national chains that may have more stores than WallMart.
I do. It's called New York City.
I'm only repeating what I've read in the business sections of the NYTimes and the WSJ.
Most people still do not shop on the internet. Internet shopping is no more than 5% of shopping going on during the holidays.
Most people also make a immediate decision about buying DVD's. This is why WalMart sells so many. People who go there for other goods, walk by the DVD aisles, and buy whatever interests them with a glance. They just pop it into the cart.
Well this is unsubstantiated as well. You haven't shown how much revenue these smaller studios are getting from DVD sales much less shown that they'd "go belly up within a few months" as you assert. New Line Cinema had $2.9 billion worldwide box office receipts from the three LOTR movies alone. Not to mention that New Line, while an "independent" film company is a unit of Time Warner.
Actually we do. They get listed in Variety, and even the NYTimes lists the sales numbers of the top videos being bought every week, as well as the rental volumes of them. Companies talk about the sales, both primary, as well as secondary.
You can get a good idea from a multitude of sources. just type DVD sales into Google.
http://homevideo.about.com/od/dvdsalesrentalcharts/
http://www.nytimes.com/2006/11/01/th...XZlwpvNQqxdjlQ
http://www.billboard.com/bbcom/chart...=Top+DVD+Sales
Those are just three out of many.
Financial data can be found in the quartly reports where they break it down.
9quote]
The independents are largely defunct anyway. New Line is the last of the Orion, Carolco, Cannon pack and not so independent anyway as part of TW.[/quote]
It depends on what is meant by "studio". there are many small companies.
This from someone who can state that New Line is in danger of closing if Walmart pulls out of the DVD market without knowing they are a unit of TW? Or that they made $2B revenue off the LOTR box off alone?
I know where they are from. But, you should look up their financing. The concern is that they have nothing else on board that will come close to "Ring" in sales. that was a *very* lucky anomaly for them.
{quote]
Besides, in 2004 movies gnerated $36B in revenues and sellthough of VHS and DVD was $16B.[/quote]
http://www.marketresearch.com/produc...id=1351519&g=1
And DVD sales revenues were reported to be $16.3B in 2005.
http://www.usatoday.com/tech/news/20...-dvd-ces_x.htm
Who's got what facts wrong? Why should we believe your other figures either?[/quote]
You still do.
I'm talking about US revenue. The iTunes store isn't even close to going international. We have to get it working here first.
ObApple: New Line's Snakes on a Plane had an Apple product placement where the Apple logo is clearly seen across the screen from a laptop.
Actually we do. They get listed in Variety, and even the NYTimes lists the sales numbers of the top videos being bought every week, as well as the rental volumes of them. Companies talk about the sales, both primary, as well as secondary.
You can get a good idea from a multitude of sources. just type DVD sales into Google.
You don't actually show anything on these links other than most popular DVDs and revenue for one particular movie.
Financial data can be found in the quartly reports where they break it down.
You're making the assertion that New Line would go belly up in a matter of months without Walmart revenue. Therefore its on your shoulders to break down the quarterly reports or this is, as you put it, an unsupported statement.
The independents are largely defunct anyway. New Line is the last of the Orion, Carolco, Cannon pack and not so independent anyway as part of TW.
It depends on what is meant by "studio". there are many small companies.
You specifically mentioned New Line.
I know where they are from. But, you should look up their financing. The concern is that they have nothing else on board that will come close to "Ring" in sales. that was a *very* lucky anomaly for them.
Again, it's your unsupported assertion that they would go belly up. I'm not looking at anything but the same kind of thing you accuse MacGregor of.
Besides, in 2004 movies gnerated $36B in revenues and sellthough of VHS and DVD was $16B.
http://www.marketresearch.com/produc...id=1351519&g=1
And DVD sales revenues were reported to be $16.3B in 2005.
http://www.usatoday.com/tech/news/20...-dvd-ces_x.htm
Who's got what facts wrong? Why should we believe your other figures either?
You still do.
I'm talking about US revenue. The iTunes store isn't even close to going international. We have to get it working here first.
You never mention US revenue only. Even given this change, if Walmart only controls $2B of $36B in revenue they don't have quite the industry ending impact that you say they do.
You are also not really correct about the relative sizes of GE and Walmart. Walmart my have twice the revenue but GE has higher gross profit (82B vs 79B), much larger market cap ($366B vs 198B) which is how most folks measure size of a company since revenue varies from industry to industry and also a much larger enterprise value ($759B vs $232B). By most measures Walmart is far smaller than GE and also makes less profit.
You also changed your opinion that Walmart could drive all studios out of business to "just some independents".
This is your original statement:
If WalMart, and others are able to back their threats up with action, then the studios can't resist for long.
Not only will investors become upset, and dump their holdings, which would be a disaster, but the companies would pour red ink, which would make it impossible to negotiate, and produce new features.
They then would be out of business.
No caveat of small studios. Just studios in general. You've been backpedalling ever since.
Either way you're full of "unsupported statements" and "logical flaws". Not only is Walmart only 5% of the revenue stream you assume that none of that revenue will be recouped by other channels. Walmart's threat, if executed, would hurt profits but there is no data to show that any studio would be pouring red ink and going out of business (at least if it wasn't doing so at the moment).
Vinea
You don't actually show anything on these links other than most popular DVDs and revenue for one particular movie.
with information, you can see exactly what you have been looking for. How much DVD sales mean to any company, including New Line, which you asserted didn't have much revenue from them.
with a little thought, you can also go to the quartly reports of those companies, as I also mentioned, for more information, such as actual numbers from those sales.
Actually, with a little arithmetic, you could get some approximations yourself seeing average selling proced for those DVD's.
You're making the assertion that New Line would go belly up in a matter of months without Walmart revenue. Therefore its on your shoulders to break down the quarterly reports or this is, as you put it, an unsupported statement.
I'm not saying the WOULD, I'm saying they could.
I don't have to get into your unecessery confusion. If you don't know how the industry works, fine.
You specifically mentioned New Line.
Yes, I did. That's because they have always been singled out in financial articles about the industry, as being one of the most vulnerable to one big flop.
Again, it's your unsupported assertion that they would go belly up. I'm not looking at anything but the same kind of thing you accuse MacGregor of.
Well then, prove me wrong!
You never mention US revenue only. Even given this change, if Walmart only controls $2B of $36B in revenue they don't have quite the industry ending impact that you say they do.
I thought that you were coming into this as well informed, so that you would know what the numbers stood for. I apologise.
But, you miss the idea that the rest of the world doesn't matter yet. If the battleground in the US is lost by either side, then it could be over.
You are also not really correct about the relative sizes of GE and Walmart. Walmart my have twice the revenue but GE has higher gross profit (82B vs 79B), much larger market cap ($366B vs 198B) which is how most folks measure size of a company since revenue varies from industry to industry and also a much larger enterprise value ($759B vs $232B). By most measures Walmart is far smaller than GE and also makes less profit.
WalMart is in an entirely different industry. WalMart sells many GE products. That gives them leverage as well, and I'm sure GE knows it. WalMart could push customers to other brands if they wanted to.
The small difference in profit, and the difference in the other financial numbers have nothing to do with this at all.
Neither company is in danger of financial problems, and neither is being looked to as a target. Both have much muscle.
But the seller is always in the drivers seat if they are big enough. And no one is larger.
quote]
You also changed your opinion that Walmart could drive all studios out of business to "just some independents".
This is your original statement:
No caveat of small studios. Just studios in general. You've been backpedalling ever since.
Either way you're full of "unsupported statements" and "logical flaws". Not only is Walmart only 5% of the revenue stream you assume that none of that revenue will be recouped by other channels. Walmart's threat, if executed, would hurt profits but there is no data to show that any studio would be pouring red ink and going out of business (at least if it wasn't doing so at the moment).
Vinea[/QUOTE]
Yes, I did say that. But you rarely see the forest but for the trees. I also said that I thought that before it got that far, there would be an agreement.
I don't believe than any studios would really allow any chance of that happening.
But, it is a worst case scenario. I don't think anyone would be stupid enough to allow it to get far enough into it. But, stranger things have happened.
But, all sides want to protect their turf, and for now, it's the studios who are running scared.
with information, you can see exactly what you have been looking for. How much DVD sales mean to any company, including New Line, which you asserted didn't have much revenue from them.
I haven't asserted anything except that your statements are equally unsupported.
While DVD's do mean a great deal of revenue for studios you haven't shown that New Line is within months of going belly up given a 5% revenue hit.
with a little thought, you can also go to the quartly reports of those companies, as I also mentioned, for more information, such as actual numbers from those sales.
Actually, with a little arithmetic, you could get some approximations yourself seeing average selling proced for those DVD's.
As I said, you're making unfounded assertions so the burden is on you to support them.
I'm not saying the WOULD, I'm saying they could.
I don't have to get into your unecessery confusion. If you don't know how the industry works, fine.
Neither evidently do you because you can't seem to bring together either a coherent argument or find facts to back up your nebulous claims.
Yes, I did. That's because they have always been singled out in financial articles about the industry, as being one of the most vulnerable to one big flop.
Well then, prove me wrong!
Again, you castigated MacGregor for unsupported statements. So either a) it is your job to prove his unsupported statements wrong (in which case your comment makes no sense) or b) you owe him an apology.
In any case, it's not my job to prove anything. I'm not making unsupported assertions about anything but your hypocracy, rudeness and lack of logic.
I thought that you were coming into this as well informed, so that you would know what the numbers stood for. I apologise.
BS. The $2B and $5B comes from where? Nowhere is there a reference. It also doesn't tally with the referenced published world wide revenues given the rough percentages of US vs WW sales or that Walmart controls 40% of US sales. Are you stating for the record that US DVD revenue is only $5B out of $16B? Source please.
But, you miss the idea that the rest of the world doesn't matter yet. If the battleground in the US is lost by either side, then it could be over.
So you're saying that when one multinational corporation is trying to drive a multinational industry to capitulate at the bargining table ONLY US revenue stream matters? That's one of the dumbest thing you've said yet.
WalMart is in an entirely different industry. WalMart sells many GE products. That gives them leverage as well, and I'm sure GE knows it. WalMart could push customers to other brands if they wanted to.
Walmart IS an entirely different industry which is why market cap is a better measure of size vs revenue. Something you refuse to acknowledge. As far as Walmart attacking GE directly are you serious? They're going to try to hurt every multinational corporation that owns a studio by not carrying any of their products? No Sony, no GE, etc?
That's not leverage...that's suicide.
The small difference in profit, and the difference in the other financial numbers have nothing to do with this at all.
Neither company is in danger of financial problems, and neither is being looked to as a target. Both have much muscle.
Certainly it has something to do with your incorrect assertion that Walmart is larger than GE as a company with more staying power. Those numbers refute your assertion that Walmart is twice GE's size. They have twice the revenue stream but make less money.
But the seller is always in the drivers seat if they are big enough. And no one is larger.
And DVD revenues for GE are equally as important or unimportant as they are to Walmart. A small portion of their total revenue and profit stream.
Yes, I did say that. But you rarely see the forest but for the trees. I also said that I thought that before it got that far, there would be an agreement.
I don't believe than any studios would really allow any chance of that happening.
Forest for the trees? You assert that Walmart has the ABILITY to shut studios down. Folks are saying YOU'VE GOT NO TREES in your forest. Walmart has the ability to hurt studios, not bring the industry to its knees.
The studios don't come to an agreement because they fear for their existance...they do so to maximize short term profits (xmas).
But, it is a worst case scenario. I don't think anyone would be stupid enough to allow it to get far enough into it. But, stranger things have happened.
But, all sides want to protect their turf, and for now, it's the studios who are running scared.
The whole point is that your worst case scenario is unsupported by either logic, supporting evidence or sense. No one is arguing that Walmart doesn't have significant leverage over the studios. Just not life or death control. But you refuse to ever say you were wrong even when we can quote you saying something stupid but you freely insult others.
Sorry, no pass on this one.
Vinea
You specifically mentioned New Line.
Yes, I did. That's because they have always been singled out in financial articles about the industry, as being one of the most vulnerable to one big flop.
New Line actually is not that small. Its called a mini-major studio and has a couple of smaller development and distribution studios under it, Fine Line Features and Picturehouse.
New Line is doing fine for the most part and it does have movies that flop. The problem would come from having a string of flops. That's the same problem for any studio.
I'm sure New Line does not on its own fully finance physical production for most of its movies. Fine Line Features and Picturehouse mostly acquire films for distribution which insulates New Line from heavy financial losses from any flops.
New Lines gross was $412.6 million in 2005 up 13% from 2004. The Wedding Crashers was New Lines highest grossing movie in 2005.
But, all sides want to protect their turf, and for now, it's the studios who are running scared.
Their is a lot more at stake than only Walmart. Online distribution is an entirely new business model and they are approaching it with great caution. There was little need for the studios to quickly jump into bed with Apple.
Walmart blinked and its bluff was called when it threatened to cut orders of the Disney movie "High School Musical". But did nothing to Disney for working with Apple. It would have been much easier for Walmart to cut orders for this one movie as an example of its sincerity.
But seeing that Walmart did nothing shows Walmart really does not want to upset the waters. If they all decide to work with Apple its extremely unlikely Walmart will go against them all.
Its clear at this point that the studios want Christmas to go on as normal and begin the new year with online distribution. Which works fine for Apple. Apple will be able to hype its expanded movie selection along with the introduction of iTV.
As for the melodramatic debate with melgross re WalMart vs. the Studios, I just have a few comments:
1. Movies are not like wrist watches. Walmart can force Chinese companies to cut prices on commodities, because another factory down the road can make the same watch and take up the slack. There aren't any factories that can crank out Spiderman 4 or LOTR: Megacollector's Edition. DVD's act like commodities, only when they are those cheap back catalog titles that you see near the check out stand. Movies are a creative industry and don't follow simplistic economic models.
2. Contracts to sell DVD's are more like the stockmarket (rather than the commodities market) in that they are based on future sales and future content. The studio's main ace in the hole is their ability to produce FUTURE blockbusters - except for Disney which of course has a huge back library of movies that it can turn on and off like a faucet.
3. Melgross' analogy to this as a "war" between Walmart and the studios, doesn't quite fit. This is a tough negotiation between suppliers and distributers and they don't really fight that way.
4. The larger the corporation, the more it is averse to conflict or change. Big Walmart and Big Studios accomodate each other more than they fight each other. GE and all ride the Walmart gravy train (like I said above) because that is the easiest thing to do as long as profits keep coming in. Once the studios see profits fall for optical media sales, they will look to change the business model and not really before.
5. I sort of fell into the argument with melgross, because it bugs me when people make statements about economics based upon Chapter One of a Business 101 class as if real life worked that way. It doesn't.
6. Melgross is correct about collusion occuring in many industries, from retailers to oil companies, but that only works when there is a cartel or when members of the industry are few and of the same size. This is not true with Walmart and other sellers of DVD's. There is no way Target or others would join Walmart in some kind of boycott of movie studios. Target would love to see Walmart give up that market! Then Walmart would have several million DVD's sitting in warehouses around the country taking up space in their "just in time" inventory lines. These DVD's would sit there until Walmart gave up or sold them at a loss to Target.
7. The movie industry is not precarious or under threat, individual studios and distributers are
8. I used the $5B number from a previous poster (I thought it was you melgross) that claimed knowledge. The actual number is not as important as the relative number to total sales.
9. Vinea is right in highlighting the importance of the non-American market. It is huge for many titles every year. Chuck Norris is better known in Thailand than he is here. Since Walmart has no international footprint, it would have little effect on that large part of the studio's DVD revenue stream.
10. No one changes horses just before the holiday buying season, so Walmart and studios are just testing the water and nothing was going to happen until the new year anyway.
11. Walmart blinked. Walmart can afford to blink, more than it can afford to fight when there is no real reason to.
12. Melgross: you are a good guy and I've agreed with you many times in the past and I've even modified my opinions based upon some of your comments, but I think you may be stuck in an overly simplistic view of the economy and in the real "power" of corporations. Fundamentalistic viewpoints often require a certain lack of breadth in framing issues, an over-reliance on "rules" or "authority" and self imposed limitations on inquiry. Think Different.
13. Walmart, Dell and MS run on inertia and in marketing incessantly to create mindshare that needs to be maintained, because nothing is stopping someone else from replicating their business plans and there is no real place to go from where they are now except down - until of course Walmart Paris opens. MS of course does have an innovation role as well, which makes it such an interesting case study.
14. I stand by my earlier assertions that Apple does not require rapid growth. It can actually survive slower rates of growth because its margins are relatively large compared to the Walmarts and Dells of the world AND because its stockholders don't expect dividends or target prices as much. The new investors that have bought Apple stock over the last few iPod years obviously may force some changes to some of those dynamics external to the company, but I doubt that overwhelmingly affects internally Apple or Steve's long range goals. If he can just keep Macs on a steady increase and if iTunes holds its own with moderate increases in video, I think that is what keeps it relevant in the industry. Innovation is its driving force. Steve said it best when he said that Apple was the most creative tech company and Pixar was the most technical creative company (major paraphrase).
Sorta back to the topic ....
With the inroads that the XBox and PS3 will have for playing DVD's and downloading media, I hope Apple has more than just the iTV in mind.
I haven't asserted anything except that your statements are equally unsupported.
While DVD's do mean a great deal of revenue for studios you haven't shown that New Line is within months of going belly up given a 5% revenue hit.
As I said, you're making unfounded assertions so the burden is on you to support them.
Neither evidently do you because you can't seem to bring together either a coherent argument or find facts to back up your nebulous claims.
Again, you castigated MacGregor for unsupported statements. So either a) it is your job to prove his unsupported statements wrong (in which case your comment makes no sense) or b) you owe him an apology.
In any case, it's not my job to prove anything. I'm not making unsupported assertions about anything but your hypocracy, rudeness and lack of logic.
BS. The $2B and $5B comes from where? Nowhere is there a reference. It also doesn't tally with the referenced published world wide revenues given the rough percentages of US vs WW sales or that Walmart controls 40% of US sales. Are you stating for the record that US DVD revenue is only $5B out of $16B? Source please.
So you're saying that when one multinational corporation is trying to drive a multinational industry to capitulate at the bargining table ONLY US revenue stream matters? That's one of the dumbest thing you've said yet.
Walmart IS an entirely different industry which is why market cap is a better measure of size vs revenue. Something you refuse to acknowledge. As far as Walmart attacking GE directly are you serious? They're going to try to hurt every multinational corporation that owns a studio by not carrying any of their products? No Sony, no GE, etc?
That's not leverage...that's suicide.
Certainly it has something to do with your incorrect assertion that Walmart is larger than GE as a company with more staying power. Those numbers refute your assertion that Walmart is twice GE's size. They have twice the revenue stream but make less money.
And DVD revenues for GE are equally as important or unimportant as they are to Walmart. A small portion of their total revenue and profit stream.
Forest for the trees? You assert that Walmart has the ABILITY to shut studios down. Folks are saying YOU'VE GOT NO TREES in your forest. Walmart has the ability to hurt studios, not bring the industry to its knees.
The studios don't come to an agreement because they fear for their existance...they do so to maximize short term profits (xmas).
The whole point is that your worst case scenario is unsupported by either logic, supporting evidence or sense. No one is arguing that Walmart doesn't have significant leverage over the studios. Just not life or death control. But you refuse to ever say you were wrong even when we can quote you saying something stupid but you freely insult others.
Sorry, no pass on this one.
Vinea
Yes. You're right about everything.
I give up.
Say what you will.