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Old March 17th, 2006, 03:59 PM   #1
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Hi-Def Blu-Ray cost Prohibitive

Just read that the cost of mastering and pressing a high-def title will be about $40,000 for a single master, compared to $2000 for a standard dvd. Pressing costs for High-def is $2.00 compared to $1.00 for a dvd.

The cost is expected to drop dramatically for mastering and pressing as costs have always dropped fast, historically, for new technology in hardware and software prices.

Wow! $1.00 per the cost of producing a DVD movie. Sold at 24.99! That is booku profit for the movie industry! Even after marketing, licenising, etc... No wonder the movie industry is releasing dvd's faster from theatre dates. The faster a movie is out for purchase to the theatre date, the more potential for customer's to purchase the movie at that price.
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Old March 17th, 2006, 04:50 PM   #2
 
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I think you could stand a class in marketing and film making both.

The cost of making a physical shiny disc is by FAR the least expensive investment in the process. It's essentially insignificant. If it weren't for the anticipated hundreds of thousands of DVDs sold, they'd never bother. If the film can't sell at least 250,000 copies, the distribution arm of the larger film distributors won't touch it because they'll lose money.

A film like Napoleon Dynamite cost a lot more to bring it to distribution and marketing than it cost to make the film. And that's a small budget film.
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Old March 17th, 2006, 05:38 PM   #3
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Hi Douglas,

It sounds like you've taken an offense to my statement. I value your comments and appreciate all the help you've given many a readers on this site as well as other sites I've visited.

I don't disagree with you on the cost of sending a movie out but don't tell me that a major Movie distributor doesn't feel a very popular movie will not sell well over 250,000 dvds.

There are costs associated with marketing, distribution, royalties. I don't argue any of that.

The cost of DVD's that retailers and small Video stores pay is near the same price or more. The larger corps like Blockbuster gets a major discount for volume purchase. The distributor/jobbers get a cut for bulk purchase. So, not being in the industy, I would guess the original cost to distributors is around 15.00-19.00 per disc, based on a suggested retail price over 20.00 dollars.

Walmart and other major retailers will sell certain movies at a loss to get people into the stores but the cost is still profitable to the movie companies, don't you think?

Yes, I understand that Wal-Mart and many other retailers are now sending back a lot of units purchased, back to the distributors, for unsold DVD's but that is the reason that the distributor's have gotten smarter about producing enough dvd's for expected sales and returns.

And am I wrong about the earlier release of DVD's to theatre release dates? Movie theatres have complained about the earlier releases, as their ever shrinking margins is getting cut, yet again. Who's going to the theaters when a DVD is only a week away?

Now, going back to topic. Wow! The costs of producing a HD/BD-DVD!
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Old March 17th, 2006, 07:16 PM   #4
 
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You're not wrong about early releases, and this is for reasons differing than you'd think. The studios are being forced to recoup more quickly, and theatres don't recoup costs. It used to be that the theatre showing drove the revenue and the VHS and later, DVD sales would be icing on the cake. Now it's just the opposite. DVD is the tail that wags the dog, and High Definition virtually seals that fate more solidly. What's happening now is that some directors will be bypassing the big studios and going direct to distribution. Soderbergh has already said this is his future, because he sees little need for the studio to share the pie.

If $1.00 is a surprisingly low figure to you, then let's talk about the actual cost today, now, for SD. I can say with good authority that a Disney DVD costs less than .40 to print, package, shrink, shelve for the physical disc, due to the numbers they run. I can also tell you Disney has lost money on DVD distributed films.

What I take offense at somewhat, is that folks look at these sorts of costs and think "Wow, I'm being ripped off" because it costs the studio, artist, or whomever, just pennies to physically distribute the product. What no one seems to take into account is the size of the overall pie, producers shares, bond payments, actors points, director points, costs of production, costs of marketing, costs of sales support, costs of distribution, and costs of administration to name but a very, very few of the costs associated with a film or any other piece of IP. As far as costs of the BD wholesale, Sony has already announced a wholesale of just shy of 18.00 for old films and just shy of 24.00 for current releases. Search this forum for a link to an article, one posted by myself and the other by Heath McKnight.

At that price, the BD consortium still won't make profit for a while, because of the cost of the replication, production, SQA, and support infrastructure. Additionally, they have licenses to pay, which aren't cheap, and a whole bushel basket of other costs that folks just don't seem to consider.

Back to theatres for a moment, they've slit their own throats in some ways. How many digital ready theatres are you aware of? One? none? Very, very few. They've opted to not move forward when MPAA and DGA have told them they need to. We're going to experience a serious shortfall of people going to the theatres for reasons you've cited, but it's short term. We'll quickly swing back go people going to the movies, because it's an "out." A horror or adventure film isn't nearly as exciting in a home with 4-8 people as it is in a theatre with 50 people. Additionally, some films just "need" a 60' screen, not a 60" screen.

If I sounded offended, I apologize. As an artist, I get bombarded with "You must be rich because you've sold a few million records, and they only cost 1.00 to make." Constantly. I've sold around 4 million records divided by 15 solo recordings and over 300 produced projects. No one takes into account the costs of producing these sorts of things.

I can't remember who said it, maybe it was Robert Rodriguez who said, "The only way to know what it takes to make a film is to make one." There is SO much truth to that.

Hence my point about the cost of the disc being essentially meaningless. They can replicate it and put it on a cereal box for the cost of the disc.

A different way to look at it, is the raw metal in a Porsche might be worth 50.00 when you look at just that factor.

To your question of profit, you'd be surprised at how many films DON'T profit. We MUST have the big hitters so the big studios can buy up films like Hustle and Flow and take risks on low budget. Our industry thrives on their winnings. Without those big risk winnings/gambles, there would be no profit to toss in our direction for Hellboys, Napoleon Dynamites, Grizzlyman, Hustle & Flow, etc. We need *more* big hitters so that there is enough cash to spread around. Because it all trickles down, somehow.
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Old March 17th, 2006, 09:01 PM   #5
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Hi Douglas,

Well, even if this topic started off in the wrong light, at least we're back on track. :)

I'm glad this topic has brought a little bit more knowledge on the movie industry to everyone here, and especially me.

I like making my little home movies and that's about it. I don't have any grand plans to produce the next "Citizen Cane" or the next "Titanic." Simply not in my budget. :)

One good thing on blu-rays, Sony is releasing the BD-Rs for consumers at the retail price range of $18.00. I hope the burners will come down in price to an affordable level, fast. I brought my first DVD burner at the high price of $600 and I thought that was a bargan. Off course when you've been drooling over new technology with a price range of $2000 for a Pioneer DVD burner, when they first came out, $600 seems real reasonable. Now, you can buy a cheap burner for $49.00.

As to the movie theatre experience, I mentioned in another post that I love movie theatres, even if I did jokingly make fun of the sticky floors, broken seats, etc...You're right, watching something bigger than life is what makes the experience so much more for me.
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