Hey Hollywood, how about some Blu-ray Disc price cuts?

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Highest Ranked

Bozster @ Dec 1st 2008 4:50PM

One word. Replication costs.

Because there isn't a large competition among replicators, most of the work are still done at Sony DADC and maybe 2-3 other large ones. That's it.

It's really economics, unlike HD DVD who relied on utilizing replication by using existing DVD replication lines and even back then had already over 200 replication lines ready and a bunch of smaller replicators, Blu-Ray is facing problems that everyone was warning about. If you don't have competition in replication and have to form lines for studios to print them, then that affects overall costs. Add to that probably still lower yield rates and you get prices you see.

I'm not trying to defend studios though, they are trying to squeeze out a buck every way they can, but since WB has most likely exclusive arrangements with Sony for replications (most likely a part of the deal they struck when they nailed HD DVD) others are left out to dry or not competitive enough relying on a handful of replication fascilities.

Highest Ranked

Bozster @ Dec 1st 2008 4:52PM

actually that was 2 words in my previous post :) I wanted to just say replication. ha ha

Highly Ranked

WebDev511 @ Dec 1st 2008 5:20PM

Well isn't that a bummer. Since the biggest market (the US) is officially in recession the likelihood of more replicators coming on-line is low.

If replicators are going to do it, they need to bring up BD50 lines or they shouldn't bother. (Unless you're one of those rare few that thinks that BD25 is "good enough")

Player prices are finally coming down, but replication lines are going to be pricey for longer that anyone expected. I wonder how many replicators are getting expansion loans turned down due to the economy.

Neutral

myuzickman @ Dec 1st 2008 5:44PM

Just like "Tank Girl" - "Two words: Brush your teeth".

LOL

Highly Ranked

Bozster @ Dec 1st 2008 6:13PM

@WebDev511

This is exactly why I supported HD DVD. I knew that player prices would come down eventually whoever won, that was not an issue though HD DVD had lower prices to boot for standalones, my biggest reason was exactly this replication thing.

For an average replicator who did DVDs and CDs to upgrade to HD DVD 30gb combo capability it cost them around $50k. Actually I think it was below that but including the work of servicing and modifying units.

For an average Blu-Ray replicator, the costs are closer to 2 million and capabilities and yield rates are far from satisfactory Those who invested into BD25 replication (and there are a few of smaller ones like that), I'm pretty sure they are not too excited overall because most studios release on BD50 DL which is much more expensive and it really is still rough around the edges with all the additional things you have to do for protection of discs.

This is why you don't see independent replicators running to Blu-Ray. An average cost for BD50DL on 50k run is around $2.75-$3 a disc. That's not small amount, plus all the processing after, packaging.and so on. you can freely add another couple of bucks for that. So you already have a discs close to $10 or so just from replication to be ready to sell. Barebones cost. Add to that profit and retailer margins and marketing for them and you get discs at $20 minimum on a 50k units or so.. take off a few bucks per disc on a run that's higher then that like 100k+ and you get at best case scenario discs that are around $15-$16 and worst case scenario where they are around $20+.

This is profitable on high profile movies where they replicate larger number of discs because it's a sure thing so the studio has some space there and is pretty sure that sales will be good, but for other catalog titles it becomes an issue. This is why you saw some great new movies on Blu-Ray (blockbusters) selling for great price. They can afford it and still make a profit but on catalog titles they sell for like $15 a piece they are really just trying to get the money back.

Highest Ranked

Peter @ Dec 1st 2008 6:42PM

Bozster - You are exactly right. I work for a small independent replicator and there is no way we are installing a BR line any time soon. The demand isn't even close to supporting it.

Due to the difficulties of manufacturing the discs, I hear the yield on BR discs is actually pretty low so that is going to drive costs up too.

Highly Ranked

WebDev511 @ Dec 1st 2008 8:17PM

I just checked over at blu-ray statistics and here's the breakdown for studios and disc types

Studio BD25%/BD50%
Disney 0/100
Fox 16/84
Lionsgate 36/64
MGM 35/65
Paramount 0/100
Sony 10/90
Universal 40/60
Warner 45/55
Other 66/34

I sure didn't expect to see paramount at 100% BD50...

Neutral

CB @ Dec 1st 2008 8:29PM

I feel so much smarter after reading that, Bozster.

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Original post: click here

Reader Comments (Page 1 of 1)

Bozster @ Dec 1st 2008 4:50PM

Bozster @ Dec 1st 2008 4:52PM

WebDev511 @ Dec 1st 2008 5:20PM

myuzickman @ Dec 1st 2008 5:44PM

Bozster @ Dec 1st 2008 6:13PM

Peter @ Dec 1st 2008 6:42PM

WebDev511 @ Dec 1st 2008 8:17PM

CB @ Dec 1st 2008 8:29PM

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