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.