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Maleflixxx recently had their 5th anniversary party at a bar in my neighbourhood. The local gay newspaper did an interview with Chi Chi and one of the things she said is that DVDs will go the way of the VHS tape and everything will be going online only. Do you think that's true?
Do you really think that gay men are willing to pay to watch their favourite scene over and over again rather than owing it on DVD?
Michael
I do think that DVD sales will decline dramatically, but I think there will continue to be some demand for physical product, in the same way that people still buy newspapers to read on the subway even though they can read the new more up to date on their computers at home or work.
Plus, there are some people that want to have something they can touch and hold, or give as gifts, etc...
As a video production company, as well as an internet company, i have watched the sale of DVD sales go down for the past 4 years, as have all companies, ie Falcon, Jet Set etc i would say DVD sales are about 60% of what they were just a few years ago, and going down. However live streaming and download of my videos on my websites are up 200% Chi Chi is right, i would say in 5 years or so physical DVD sales will be minimal, and most brick and mortar adult only video stores will be out of business, it has allready happened where i live. The fact is nothing will change, you will still be able to see all your favorite titles and new releases, it just the means of distribution that will change. In a few years you will simply go to a studios site, and download the video straight to a blank DVD on your computer. Or your computer will be in sync with your TV. Actually it's here now, but in a few years it will be common place. With my company, i have a new DVD release comming out next month that will be available on DVD for $39 but for the first time we will also put it up on www.markwolffvideo.com for live stream and download, we used to wait about a year after a DVD was release to put it onto the video site. When you consider that for $29/month you can watch this DVD plus 35 other full lenght titles, you can see this is the way the video business is headed. You may think this way will cause profits to decrease, but when you factor in the cost of DVD duplication, postage and processing, customs hassels, lost shipments, damaged DVD's Box design etc etc it is more cost effective to use the internet as the medium of distribution. And much quicker as well.
Could not agree more. I would put the window at around 2 - 3 years at best and there will be a LOT of attrition in stores and websites that do hard product sales only during that period of time.
The last to fall will be those that act as online archive stores where you can find anything from the past, or that will research and find any title... PLUS we have not seen streaming solutions for indie films, gay features, etc...come to marktet yet.....
But we, too, have already seen sales shift to more of a digital delivery within the last year.
Uless of coruse, those "older" customers that dont know how to watch them online pick them up in the stores. We have found if a studio/producer waits to release their videos on VOD the sales stay steady for the DVD. If the producer releases the DVD and VOD at the same time, they are lower than sales of DVDs that are not on VOD.
Just my 2 cents.
As much as I hate to agree with Chi Chi. She is right.
In about 2 years it will no longer be cost affective to mass produce DVDs.
You can only make them for the "older" customers to a point.
Then they will have to make the change.
Just like the older market did with LP's and Tapes.
Lets face it. If you want to see porn and its only online.
Thats where they will go.
Its sad that its changing so fast. The DVD did not last that long over the long run.
It's just my opinion, but I think that those of you who connect falling DVD sales solely to the rise of VOD are missing the bigger picture. It's true that many studios are seeing drops in DVD sales numbers (our own sales are holding steady but haven't increased this year) but VOD isn't the only thing affecting us.
1. There's been a massive oversaturation of the market in recent years. And although the demand is high and steadily increasing, it does mean a smaller share of the pie for established producers as the competitive playing field grows larger.
2. Retail prices are high, compared to Hollywood releases. Now we all know that we have to keep prices high because we don't do the volume the mainstream studios do. Nevertheless, it does affect consumer perception. When you see DaVinci Code at Best Buy for $19, that can't help but gripe some customers about the high cost of porn.
So you see, from the point of view of a producer, delivery method isn't the only thing affecting us. Having said that... it's definitely becoming a much more important concern for us. Personally, I don't subscribe to the "doom and gloom" about DVD's become dinosaurs in 2 or 3 years. Not when you go to Best Buy and see the massive amounts of DVD's they're inventorying and selling. But I do believe that the delivery method for adult oriented entertainment is definitely moving towards "online".
Anyway, I wasn't mocking anyone's beliefs... just adding my $0.02 to the discussion.
I couldn't agree with you more!Quote:
Originally Posted by citiboyz
Its absurd that hundreds of titles can be released in one week alone and that retail prices are absurd considering the per unit cost of the finished product.
At least we are now blanketing the globe with our dvds !
although I don't think that is very "green" of us...
well... and the worst part about it is the gouging going on at the retail level. That more than anything else is why the B&M stores are going away, in my opinion.
Most online stores are offering titles at $25-50, while the exact same titles are going in B&M stores for $50-80. We've seen B&M retailers selling our titles for as much as $80, $35 more than we sell 'em for on our own site, and $20 more than our "suggested retail" price.
If the B&M stores were smart, they'd get entrepreneurial and start offering things the online stores couldn't offer... discounts on rentals with DVD purchase, free peep-show-booth time with so much spent on DVDs, promos combining toys and DVDs, or work with studios and make more big events with models doing signings and stuff. But for the most part, they just sit on their asses and charge sky-high prices and watch their market figure out how to go online and buy for half the price.
I think *that* more than anything else is why physical product sales are going away. The online retailers will always have to compete with downloadable DVDs and VOD, because if someone can get online to buy they can probably figure out how to get online to go to a VOD site. But the B&M retailers are dealing with a largely different clientele, and instead of nurturing them and growing a relationship with them, they just continue to rip them off. And in the long run, they'll put themselves out of business in the process.
yes but Chip, those guys up north in the castro especailly, pay a LOT of $$$ for rent!
they've got to make it up somehow. . . (i'm just kidding)
people can get greedy and its bizarre to me that we don't see more competitive pricing in B&M stores, especially in this day and age when you can easily pick up one of our titles for 10-15 less on line with free shipping from one of the on line mega stores -
you'd think that retailers would try to compete (like other business) however, our GAY OWNED businesses tend to want to reach deeper and deeper into our pockets because they know that they have a captive audience
don't get me wrong, we like our retailers especially in SF where we make personal appearances and sign photos and stuff for fans. . . but, we don't tell them what and how to sell stuff so that they make the rent and they don't (usually) tell us what to shoot -
Several thoughts from varying parts in this thread..
- DVD hard product sales are shifting to digital delivery.. We act as both a producer, distributor and a retailer as part of the several markets we operate in. We have personally seen, from a retail perspective, a shift away from hard product sales and our digital VOD sales increasing in the same period. Now, they are not in equal percentages, meaning that there are other factors at work in this time period.
- One of the reasons prices in the adult retail sector are high has a lot to do with studio pricing and distributor pricing. Example: You as a studio sell your title to a distributor for $15. Many distributors, having long abandoned the 20% markup distribution model, are marking products up 100% or more and selling to stores. Sometimes, even when we buy in quantities of 25 or more pieces, we only get them to reduce this margin to 90% on the distribution markup...and we know this because we know what price level the studios I am comparing to are sellling to distributors. There are some studios, that are demanding $33 to $38 WHOLESALE for their titles...meaning a full keystone markup at a retail store should put this product at $66 to $76...however, especially in the online market place, it is very hard to convince the consumer to pay more than $54 or $59.95 for a title.... This pricing model is also driving consumers to VOD, where they can choose many times specific scenes...or watch a few minutes, and move on if they don't like a title....choosing something more to their liking from another studio.
- One of the arguments above was that there are so many mainstream titles in Best Buy.... and part of the reason this is still true is that mainstream, still to my knowledge, has not fully embraced VOD delivery at this point. Once mainstream studios and distribution fully wrap themselves in VOD delivery, the rapid declination of available product at stores like Best Buy will be readily apparant. Best Buy, and stores like them, will position themselves to profit from this shift by selling prepaid minute cards, and perhaps provide download stations in the store as a product sales model to compensate. As porn's major outlet is increasingly online, which escapes many of the archaic zoning laws preventing stores and closing stores in many cities across the US market, as well as in other countries, it is only natural that using online technology will be faster in this marketplace.
- Online delivery by studios is going to be the distribution model of choice in the near future.. Many studios have tested straight to VOD releases, as well as mixed releases and have played with timing on releases and have found that overall their profit margins are better in the long run by releasing online...
- Market oversaturation has become an issue with the affordablilty of digital video cameras and home computer based editing and dvd authoring....this has allowed almost anyone to become a porn producer.. It's not saying the best quality is always produced...but it is produced and with online delivery, these young studios no longer ( at least for now ) have to keep sending in DVD's hoping some distributor will take notice and at least represent their products, even if they don't actively market it. IN the online delivery model the customer chooses which studios sell products...for the most part, by their searches, and selective process. ( I am sure this will change in the future too)
Anyway, I ramble... point is there are many factors in play right now... and from our vantage point we get to see many of them... the above are the conclusions I have come to and the reasoning behind them.
I actually do beleive that we'll see a reduction in physical DVD sales over the next 5 years, possibly to the extent where they do go the way of BetaMax and VHS.
The reason for my thinking this? Simple, with todays instant media delivery mindset, and the furvor of the iPod and video iPod its only going to take someone downloading a movie online, and if they want to watch it offline, not watching it on the media device, but plugging that device in to the TV and playing the media file direct from their device.
The capability of this is already here with the video iPod and the quality, although not spectacular is definately watchable on the big screen.
Im actually planning to do some tests with my iPod over the next few weeks so far as 'quality' of playback goes on the pod and on the TV once the pod is plugged in to it so im interested in seeing potentially how soon we are in to becoming a purely digital era so far as 'media' goes.
Now might also be the perfect time for those companies not already doing so, to embrace encoding their DVD titles for web and media device usage, its going to put them way ahead of the game when this type of media delivery does take off and i have no doubts right now that it will.
Regards,
Lee
I see thigns going the itunes way.. you pay to download a file that you can carry on your iPod or cell phone and you can watch it on your computer or beam it to your TV and carry it with you.
you can hide it from your wife and you can take it with you on vacation and discretely watch it in your hotel room.
Hard copy DVDs I think are on the way out.
Hummm...
Nahhh....
Our paperless society never happened either!
id rather have my own dvd copy than watching it over and over again in the internet...:thumbsdown:
I agree as well. It's only a matter of time before the medium of DVD is replaced with something better, more efficient and more cost effective.
Not that everything will be going to your "computer" though. Keep in mind, and pay attnetion to products like XTV.com and TV set top boxes like it that are essentially TV over IP.
The people who buy porn DVD's as opposed to watching it on their comps are the people who will gravitate towards the "porn" aspect of TV over IP, and they should be paid attention to.
Here in Vancouver (and elsewhere they service), Telus (the big telephone service provider) is making a big push soon for their TV over IP and there is at least one local porn production company that is on board with them in their pay per view section.
Definitely something to keep our eyes on...
Dave