Disney sells nearly a half million films through iTunes

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  • Reply 41 of 71
    jeffdmjeffdm Posts: 12,954member
    Quote:
    Originally Posted by pt123


    Looking at the numbers, apparently itunes isn't for a lot of people.



    That's just from one studio that has maybe 10% of the movie market at best. Each additional studio may increase their potential sales significantly. The big one is Sony though. They own about 50% of the available movies, last I read because they have Columbia Tri Star and MGM/UA, both of which have huge catalogs. I can imagine Sony wanting to starve out Apple.



    That said, I'm not interested unless there is an iTunes rental service, then maybe. Or maybe not, because I need captions or subtitles on occasion. I can understand supplementary videos not being there for bandwidth reasons, but subs aren't an issue for that. Also, Enhanced for Widescreen DVDs usually look a lot nicer on my screens than what I can get on iTunes.
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  • Reply 42 of 71
    Quote:
    Originally Posted by melgross


    That's a world wide number. So, Apple's percentage is higher here in the US, which is all their movie store sells to right now.



    An astute observation. We need to take DVD sales in the US alone. Then see the number of iTunes Movies sold as a percentage of that total. Then as a percentage of WallMart sales.



    Please hold, researching.... [insert spinning beachball]
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  • Reply 43 of 71
    There are about 110 million households* in the USA for 2006 (an average housing unit with one or more people living together)



    Best data I can find for now is that in August 2004, USAToday reports an average home buys 15 DVD movies per year**. Let's take 10 DVD movies as a low estimate as average purchase per household, and 20 DVD movies as a high estimate as average purchase per household. This would be for 2006.



    Low estimate:

    110 million households for 2006. 110 x 10 DVDs on average = 1.1 billion DVDs purchased in 2006 in USA.

    High estimate:

    110 million households for 2006: 110 x 20 DVDs on average = 2.2 billion DVDs purchased in 2006 in USA.



    Wallmart accounts for 40% of these purchases = 0.4 * 1.1 or 2.2 billion = between 440 million DVDs to 880 million DVDs.



    iTunes Movie downloads for Disney alone in the USA alone is 500,000 movies. Let's assume these are equivalent in some way to 500,000 DVDs.



    Low estimate:

    500,000 / 1,100,000,000 = 0.045% of total USA DVD sales in 2006.

    High estimate:

    500,000 / 2,200,000,000 = 0.023% of total USA DVD sales in 2006.



    Compared to Wallmart, low estimate is 0.114% of DVD sales USA Wallmart 2006.

    High estimate is 0.057% of DVD sales USA Wallmart 2006.



    SUMMARY ACCORDING TO THESE CALCULATIONS

    FOR USA DVD SALES, TOTAL USA, TOTAL WALLMART,



    iTunes Movies Disney only is between 0.023% to 0.045% of Total USA DVD Sales.

    iTunes Movies Disney only is between 0.057% to 0.114% of Total USA Wallmart DVD Sales.



    Currently it appears that iTunes downloadable movie purchases are not any threat in any way to Physical USA DVD sales through Wallmart or in total.






    SOURCES

    *http://www.census.gov/prod/1/pop/p25-1129.pdf

    *http://www.census.gov/popest/housing...EST2005-01.xls

    **http://www.usatoday.com/life/movies/...-success_x.htm
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  • Reply 44 of 71
    I know, there are a lot of challenges to the model proposed above and accounts only for purchases and not the rental market. iTunes Movies to be a success for Apple and iPods and iTV(?) needs to strongly offer both a purchase and rental opportunity. This would also position them to be in the mix for HDTV next-generation film delivery systems.
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  • Reply 45 of 71
    Normally I wouldn't dump a whole article here but since we're here this is an interesting commentary and full text is not easily available from http://publications.mediapost.com/ :



    "7. Clicks Vs. Bricks: Let the Form Factor Wars Begin

    by Shelly Palmer




    There was an interesting news item this week in the Wall Street Journal that quoted a sharply worded letter from Target President Gregg Steinhafel, who said that the chain had become aware that "some movie studios have made new-release movies available to download service providers at lower cost" than DVDs, allowing the downloaded movies to be sold to the public at lower prices.



    This is interesting stuff. For years pundits have been saying that download customers are not the same as DVD customers. Are they? Are Target and Wal-Mart customers considering the price of a download vs the price of a DVD before making a purchase? Will they view these two video formats the same way on the same devices? No to all of the above.



    This is not the classic "online vs. brick and mortar" debate. Current downloadable video files are simply not comparable to DVDs-- at least, not the way ordinary retail products are comparable. My son likes to buy his Nike footwear online. I have no idea why he doesn't need to try them on first, but he doesn't. He gets the identical shoe from some Web site for about 30 percent less than he'd pay in a retail store--the key word being "identical."



    DVDs are physical copies that are already backed up. They will play in any $35 DVD player on any television set, and they look great!



    Files are not physical copies and they do not arrive with a back-up. They will only play on computers, and they can look OKor not--depending on what you are watching them on.



    Hmmm....they are not really the same items in the "good, better, best" school of Big Retail.



    To be fair, video files are coming of age; sometime in the not-too-distant future, they will be the only way anyone will want to purchase a copy of anything. But that time has not yet arrived.



    What we have today are two basic download-to-own distribution methodologies: "Burn your own DVD" and good old-fashioned "download over the public Internet to your hard drive."



    Amazon's Unbox (a burn-your-own-DVD-over-the-wire fiasco) is a technological nightmare. Only the most sophisticated and fearless technogeeks will even attempt it. Will DVDs over the wire ever be mainstream? I don't hold high hopes for this technology. It is not that people won't do it, it's just that the current methods are extremely clumsy and not conducive to customer-service-oriented business models. The only way this becomes real is if a bunch of computer manufacturers or consumer electronics manufacturers start building the technology into their systems and make the software absolutely transparent to consumers. It really has to be, put in a blank disk and take out your labeled copy. I don't see this happening at scale any time soon, especially if the price is the same as a prepackaged retail DVD.



    Apple's iTunes store sells movies in 640x480 MP4 video files. They look pretty good and, that being said, most people think they are too expensive for what you get. For some people, .m4v files are extremely convenient. They are relatively small and you can move them fairly easily from computer to iPod and back again. But, by comparison, DVDs are unbelievably convenient. They are easy to store, portable and of such high quality that they really cannot be compared to consumer-purchasable video files in any way. One might argue that the only meaningful consumer value proposition for these files is "lower price." Which, at this writing, is not the case. Files of current DVD releases are $14.99, and library titles are $9.99--no demonstrable savings over physical DVDs at all.



    I truly hope that content creators do not bend under the pressure of the large retail chains on this issue. Content is ultimately going to be sold over the public Internet, and lower-quality download products need to be less expensive than their higher-quality physical counterparts.



    On the other hand, in seven to 10 years, when a substantial number of discount superstore customers have FIOS or other 100GB download capacity broadband connections, when they each have $3,000-$5,000 home theater installations with household storage-area-networks, and more than half of them live in a broadband cloud, we should expect to see the price of a full resolution download be comparable to the price of a current-day DVD. Of course, we will still expect it to be cheaper than a physical copy since it will be cheaper to produce. After all, savvy mass consumers in the future will know what their present-day compatriots know--the costs associated with producing a downloadable file do not include the printing, packaging, warehousing and shipping costs associated with their physical counterparts--and they never will. "
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  • Reply 46 of 71
    solsunsolsun Posts: 763member
    Quote:
    Originally Posted by sunilraman


    An astute observation. We need to take DVD sales in the US alone. Then see the number of iTunes Movies sold as a percentage of that total. Then as a percentage of WallMart sales.



    Please hold, researching.... [insert spinning beachball]



    I posted this earlier in the thread.... The 17 Billion a year figure is not worldwide, it's a US figure. Last year (2005) was actually 16.3 billion, but estimates for 2006 are around 17 billion.



    http://www.usatoday.com/tech/news/20...-dvd-ces_x.htm
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  • Reply 47 of 71
    Based on the various scenarios we have modelled, at most movie download/ rental services might take up 3-5% really AT MOST of physical movie download/ rentals, this is towards 2008, 2009. Target, Wallmart, etc. are scared of rapid growth that will bite them in the ass, such as BitTorrent pirating that causes losses to them. They are also scared of iTunes Store *music* downloads which has progressively increased rapidly. But again - iTunes Music can be said to have reduced the amount of losses by music companies due to rampant music piracy...!!?!!



    In these early days though iTunes or not, movie studios would be wise to present a strong portfolio of their valuable material which can be prepped for DVD-quality or HDTV-quality and say to Target and Wallmart, look, given a growing market anyway for after-cinema movie purchases and rental, these other non-physical channels are still very early days.
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  • Reply 48 of 71
    Quote:
    Originally Posted by solsun


    I posted this earlier in the thread.... The 17 Billion a year figure is not worldwide, it's a US figure. Last year (2005) was actually 16.3 billion, but estimates for 2006 are around 17 billion.



    http://www.usatoday.com/tech/news/20...-dvd-ces_x.htm



    Okay cool 8) My rough calculations above still hold in the way they are proposed.
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  • Reply 49 of 71
    Quote:
    Originally Posted by TenoBell


    iTunes success isn't dependent on you old farts anyway.



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  • Reply 50 of 71
    solsunsolsun Posts: 763member
    Quote:
    Originally Posted by sunilraman


    Okay cool 8) My rough calculations above still hold in the way they are proposed.





    Here's another useful link from Digital Entertainment Group.. They track shipments of DVD's in North America.. I suppose the average DVD selling price is less than $15 because in 2005 there were 1.65 billion DVD's shipped, at $15 each that's around 24 billion in revenue.. The average DVD price must be closer to $10.



    http://www.dvdinformation.com/industryData/index.cfm
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  • Reply 51 of 71
    solsunsolsun Posts: 763member
    Quote:
    Originally Posted by TenoBell




    iTunes success isn't dependent on you old farts anyway.



    iTunes real growth will be in the 25 and under crowd.



    I've got to disagree with you... For music, yes, but for movies, no. Under 25's college kids have less disposable income to spend on puchasing $10-$15 movies. And by the way, I'm 32, who are you calling an old fart?
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  • Reply 52 of 71
    Quote:
    Originally Posted by sunilraman


    There are about 110 million households* in the USA for 2006 (an average housing unit with one or more people living together)



    Best data I can find for now is that in August 2004, USAToday reports an average home buys 15 DVD movies per year**. Let's take 10 DVD movies as a low estimate as average purchase per household, and 20 DVD movies as a high estimate as average purchase per household. This would be for 2006.



    Low estimate:

    110 million households for 2006. 110 x 10 DVDs on average = 1.1 billion DVDs purchased in 2006 in USA.

    High estimate:

    110 million households for 2006: 110 x 20 DVDs on average = 2.2 billion DVDs purchased in 2006 in USA.



    Wallmart accounts for 40% of these purchases = 0.4 * 1.1 or 2.2 billion = between 440 million DVDs to 880 million DVDs.



    iTunes Movie downloads for Disney alone in the USA alone is 500,000 movies. Let's assume these are equivalent in some way to 500,000 DVDs.



    Low estimate:

    500,000 / 1,100,000,000 = 0.045% of total USA DVD sales in 2006.

    High estimate:

    500,000 / 2,200,000,000 = 0.023% of total USA DVD sales in 2006.



    Compared to Wallmart, low estimate is 0.114% of DVD sales USA Wallmart 2006.

    High estimate is 0.057% of DVD sales USA Wallmart 2006.



    SUMMARY ACCORDING TO THESE CALCULATIONS

    FOR USA DVD SALES, TOTAL USA, TOTAL WALLMART,



    iTunes Movies Disney only is between 0.023% to 0.045% of Total USA DVD Sales.

    iTunes Movies Disney only is between 0.057% to 0.114% of Total USA Wallmart DVD Sales.



    Currently it appears that iTunes downloadable movie purchases are not any threat in any way to Physical USA DVD sales through Wallmart or in total.






    SOURCES

    *http://www.census.gov/prod/1/pop/p25-1129.pdf

    *http://www.census.gov/popest/housing...EST2005-01.xls

    **http://www.usatoday.com/life/movies/...-success_x.htm



    Actually those calculations are incorrect considering those are the stats from 2 months, and as far as I still know there are 12 months in a year...

    so following your apx. 15 dvds per family, per year the figure is still aroudn .27 percent...



    Correction: using the 10 dvds per family per year figure
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  • Reply 53 of 71
    Quote:
    Originally Posted by TenoBell


    The selection is rather low right now also. Sales will increase when there is more choice.







    iTunes success isn't dependent on you old farts anyway.



    iTunes real growth will be in the 25 and under crowd.



    C'mon, are you saying the 25 and under crowd can't tell a half-assed deal when they see it? They are probably just downloading illegally or ripping DVDs anyway.
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  • Reply 54 of 71
    BTW, sunilramen, those are fantastic posts with the facts and figures that back up the conclusions some of us "iTV naysayers" have drawn based on inference.



    iTV will be a real slow opener come next year. I'm just sayin'....
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  • Reply 55 of 71
    melgrossmelgross Posts: 33,723member
    Quote:
    Originally Posted by solsun


    No, it's actually 17 billion a year in the US.



    $17 nillion in DVD sales here in the US? Where did you see that figure?
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  • Reply 56 of 71
    melgrossmelgross Posts: 33,723member
    Quote:
    Originally Posted by SpamSandwich


    I buy an average of 1 to 2 DVDs a month. I view about 16-20 DVDs a month via Netflix. I don't rip any movies. It's such a waste of HD space. If I like it enough, I'll just buy the DVD.



    That's certainly over the average.
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  • Reply 57 of 71
    jeffdmjeffdm Posts: 12,954member
    Quote:
    Originally Posted by melgross


    $17 nillion in DVD sales here in the US? Where did you see that figure?



    That looks like it's pushing it. In 2004, it appeared to be $9.1B for DVD, but it doesn't say if it's US or worldwide, either way, it's not $17B:



    http://bigpicture.typepad.com/commen...les_slowi.html (link fixed)
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  • Reply 58 of 71
    Quote:
    Originally Posted by JeffDM


    That looks like it's pushing it. In 2004, it appeared to be $9.1B for DVD, but it doesn't say if it's US or worldwide, either way, it's not $17B:



    http://bigpicture.typepad.com/commen...les_slowi.html (link fixed)



    The first place I heard it was Peter Oppenheimer in Apple's quarterly conference call.. The second place was the USA today article I linked to above which said 2005 was 16.3 billion.. It was also mentioned in one of the articles regarding Wal-Mart and iTunes, however I can't find the correct link.



    edit: I found it. http://www.businessweek.com/bwdaily/...831_806225.htm



    Lastly, the link from the Digital Entertainment Group whom track shipments of DVD's in North America support that dollar amount by showing that there were 1.65 billion DVD's shipped to retailers (in North America) in 2005. I realize that just because a DVD is shipped it is not neccessarily sold, but if you figure an average selling price of $12 x 1.65 billion DVD's, the total revenue is AT LEAST 17 billion.. Ultimately, I was using the figure Oppenheimer quoted, it may be below or slightly above, but 17 billion is a fairly accurate estimate.



    http://www.dvdinformation.com/industryData/index.cfm
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  • Reply 59 of 71
    One more article with dollar amounts... It's from Forbes who says a 24 billion a year business... I'm guessing that may be a worldwide figure?



    "Still, some 25% of adults who own PCs are willing to watch videos right on their computer, according to Forrester research. The biggest benefit to Apple could be the chunk of sales it takes from the $24 billion home video business. Apple has already sold more than 45 million $1.99 television episodes since debuting its video store in October 2005. More than 5 million of those downloads were of Disney-owned content.



    http://www.forbes.com/2006/09/12/itu...0912apple.html
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  • Reply 60 of 71
    Quote:
    Originally Posted by melgross


    $17 nillion in DVD sales here in the US? Where did you see that figure?



    Okay, found another one with that exact figure from Businesweek...



    As the largest seller of DVDs, Wal-Mart accounts for roughly 40% of the $17 billion in DVDs that will be sold this year, a financial lifeline to big-spending studios.





    Full article: http://www.businessweek.com/bwdaily/...831_806225.htm
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