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Netflix is 'Killing' DVD Sales, Research Finds (torrentfreak.com)
Netflix has become the go-to destination for many movie and TV fans. The service is bringing in billions for copyright holders, but it also has a downside. New research shows that the availability of content on Netflix can severely hurt physical disc sales, which traditionally have been the industry's largest revenue source. From a report: A new study published by researchers from Hong Kong universities provides some empirical evidence on this issue. Through a natural experiment, they looked at the interplay between Netflix availability and DVD sales in the United States. The experiment took place when the Epix entertainment network, which distributes movies and TV-shows from major studios including Paramount and Lionsgate, left Netflix for Hulu in 2015. Since Hulu has a much smaller market share, these videos no longer reached a large part of the audience. At least not by default. The researchers used difference to examine the effect on DVD sales, while controlling for various other variables. The results, published in a paper this week, show that DVD sales increased significantly after the content was taken off Netflix, almost by a quarter. "Our difference-in-difference analyses show that the decline in the streaming availability of Epix's content leads to a 24.7% increase in their DVD sales in the three months after the event," the paper reads.
I don't see this as a downside at all, or even an upside for that matter. Should I care? I don't like to own dvds, I rarely watch the same movie multiple times. If I can rent and watch it, so much the better - less cost, less waste. Clearly, I'm not alone in this, given the figures. If dvd sales are replaced with streaming rentals, who is affected adversely? Apart from the handful of companies that produce the dvds and their packaging?
This seems to run against the common talking point that people won't pay for content if they can't find it for free. If people really are buying the physical discs and revenues are going up when they can't find it online for free. (or nearly free, comparatively)
It is bad because this type of research could lead to less availability of movies on streaming services. If the studios have hard proof that Netflix is costing them money, why would they allow their movies to be shown on Netflix? Either we would see far less movies available, or the prices would go up.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Then you are irrelevant as far as this topic goes. Why even bother to post?
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Why the hell do people want to own expensive cows and manage barn inventories when milk is cheap and fresh for $10 a month? Netflix is to DVD sales as internal combustion is to horse buggies. Research is limited to finding what research looks for.
I can't wait for this medium (and its high resolution counterpart) to die. Not only it is a fragile PoS - unlike what we were told initially, that you could scratch it with a screwdriver and it would keep working regardless - but, in addition, they tend to be shipped with unskippable junk that you have to watch every single time, before watching the material you are interested in.
but now they have some actual evidence of what the difference in disc revenue is. This could be useful (to either/both sides) next time Netflix needs to negotiate streaming contracts - Netflix can't claim "it won't affect your DVD sales" and the studios can't claim "without streaming we'd sell ten times as many, you have to pay us based on that".
It will be annoying and sad if this reduces streaming availability, but having it based on evidence seems like an overall win in the long run.
If the studios have hard proof that Netflix is costing them money, why would they allow their movies to be shown on Netflix?
The article doesn't say that Netflix is costing them money, just that they sold 25% more DVDs when they weren't available on Netflix. It's entirely possible that their streaming revenue would exceed the extra revenue from those DVD sales, but there aren't enough details there to say one way or the other.
Next thing you know they'll be saying that automobiles are killing off the buggy-whip market.
Just cruising through this digital world at 33 1/3 rpm...
Market clearing price to watch a movie – once, or 100 times by streaming – is lower than the cost to own it on Blu-Ray or DVD.
Studios may try to raise that price – temporarily – by not releasing the movie to Netflix streaming. But eventually they will, after disc sales fall off.
I'm in no hurry.
The owning economy as opposed to the sharing/renting economy. And as past analysis have shown, the Netflix movie catalog is shit.
Even so, at one time you could at least rent a DVD from netflix of an "old" movie. No more. And nowhere else either, streaming or physical. In effect, a huge percentage of the movie catalogue is no longer available.
No, I will not purchase a dvd when a HD is available.
No, I will not purchase a blu-ray because I don't want to damage the blu-ray, store the blu-ray, purchase additional blu-ray players or get off my lazy ass to find a blu-ray and put it in the player.
Yes, I'll pay for a movie in one of the common streaming services for $10-$20 per movie.
It's clearly a generational thing. Many older individuals can't seem to understand that dvds are inconvenient.
I like having what I want when I want it.
Forms of consumption other than privately owned physical media simply don't allow for this.
You're at the mercy of what corporations let you have at a given time and they can change their minds at any moment.
A Pirate and a Puritan look the same on a balance sheet.
That would depend on what's generating more money. What the studio's want is to have their cake and eat it too, in other words they want disc sales and streaming sales. Practically what that means is they will simply delay streaming availability until a certain number of months after the DVD/BluRay is available so as to capture both revenue streams. Several of the studio's already do this.
I buy DVD's and BlueRays. I like to own the "Right to Use" the content. I like not to have to rely on a given provider to have a contract to to stream content in order to be able to watch to something. I will watch some shows and movies multiple times. So for a certain core set up media I want to own the media. All that crufty back catalogue of movies and shows that is no longer available on streaming services, mine to see at any time of my choosing. I even ( GASP ) buy actual books from time to time, it seems as though there is SOME content not yet kindlified, that may in fact never be on those platforms. The streaming / sharing / caring economy will eventually strip you of any remaining un-curated choice in what you read, watch, or listen to. Seems as though there is some music not published the day before yesterday thats worth listening to. So yes I own many hundreds of CD's as well.
the vast majority of films don't need to be watched more than once.
Spoken by an Anonymous Coward who obviously doesn't have children. My six-year-old boy is on what must be his 863rd viewing of his Angry Birds movie DVD.
I'll pay for a service if the cost and content is there and for me Netflix just isn't worth a monthly fee in the face of the likes of Youtube, Crunchy roll, Crackle etc.
Nor will I pay for "ownership" of digital goods.
I will buy physical goods that I truly do own. I'm not much of a movie guy but DVD and Bluray are great if there is something I wish to watch.
Same goes for videogame (consoles) and music (cd sometimes vinyl), if I'm going to spend real money I expect a real product.
On the Oregon Cost born and raised, On the beach is where I spent most of my days
Yes, I'll pay for a movie in one of the common streaming services for $10-$20 per movie.
Assuming you mean "purchase the ability to stream whenever I like on an ongoing basis". Whereas my willingness to pay for a rental (streamable for 48 hours) tops out at maybe $3.
- First they ignore you, then they laugh at you, then ???, then profit.
If people don't understand something to be inconvenient, then it isn't.
Maybe it is the aversion to non-vinyl physical media that is irrational. I prefer the one-time chore of ripping the disc to the lifetime chore of maintaining the same vendor (as with streaming). I actually got a CD shipped from Amazon, with auto rip, for a penny less than the mp3 album.
People are literally saying "I'll give you a little more money, in order to receive nothing."
It's clearly a generational thing. Many older individuals can't seem to understand that dvds are inconvenient.
We understand, but not everything, and certainly not everything worthwhile, revolves around convenience. You'll learn that as you get older.
It must have been something you assimilated. . . .
No, I will not purchase a dvd when a HD is available.
No, I will not purchase a blu-ray because I don't want to damage the blu-ray, store the blu-ray, purchase additional blu-ray players or get off my lazy ass to find a blu-ray and put it in the player.
Yes, I'll pay for a movie in one of the common streaming services for $10-$20 per movie.
It's clearly a generational thing. Many older individuals can't seem to understand that dvds are inconvenient.
Convenience always comes at a price. That is neither a new concept nor a generational thing.
Privacy comes at a cost as well. Some prefer paying the premium for physical media that often allows consumers to enjoy content without whoring out their digital soul to the streaming overlords.
Seriously most of my 800 dvd's look perfectly fine on my 5" tv.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
Same here! I still buy physical media for the stuff I know I watch numerous times. Stuff disappears from the streaming services, but it's always on my shelves!
"A Bird In The Hand Will Poop On Your Wrist"-Benny Hill,1982
This seems to run against the common talking point that people won't pay for content if they can't find it for free. If people really are buying the physical discs and revenues are going up when they can't find it online for free. (or nearly free, comparatively)
To figure out if DVDs or streaming is better you really have to evaluate the full media life-cycle, which is much longer than the 3 months cited in the summary. It makes sense there would be an initial jump in physical sales when media is released or goes off streaming, probably to more "hardcore" or dedicated fans, but those sales will eventually taper off leaving companies with physical inventory that is harder and harder to sell. On the other hand, streaming doesn't have the physical inventory costs and it may generate more "casual" viewing over the long-term, but for less profit on each view. So, I think a 3-month study would be heavily biased to the DVD format.
If you read the full article it does say this:
"...The research above has its limitations. It only focused on DVD sales and not on other physical and digital revenue sources, for example. That said, the present data clearly suggests that content owners might be wise to keep titles off Netflix for a while, especially the blockbusters. Similarly, it affirms that there’s little harm in putting their older back catalogs on the streaming service."
So, media makers who want to maximize profits should do a little of both and carefully time when to switch formats.
I haven't bought a BluRay in about a year. It's not because the movies are on NetFlix, it's because most of the crap that's come out in the last few years isn't worth watching more than once, and hence isn't worth owning. The last BluRay I bought was The Princess Bride (which I already owned on DVD), because I watch it over and over again.
Sadly, the days when movies were compelling enough to keep watching over and over again seem to be gone. DVD and BluRay sales are dying as a result.
I agree with you for things that are important. Watching movies is not important to me.
love is just extroverted narcissism
I "pirate" movies I own. Copy protection makes ripping them for my Plex server a PITA, and I refuse to watch them off the disk for the simple reason that:
IT IS MY GODDAMN MOVIE NOW YOU RAGING FUCK-KNUCKLES. IF I WANT TO SKIP YOUR GODDAMN PREVIEWS THAT IS MY FUCKING CHOICE!
But, that is just my opinion.
Blu-rays usually come with a digital copy included. Usually UV or both a UV and Apple copy. Some give you the option to redeem on Amazon or Google as well. Setting up a UV account is a PITA since you need a UV login and a login to VUDU, Flixster, and link your UV account to several studio redemption sites if the codes won't work straight with VUDU or such. But once you navigate that they work pretty well. Wide device support, offline viewing, and at least with VUDU the stream quality is a cut above Netflix and Amazon.
I browse on +1 so AC's need not respond, I won't see it.
ability to stream whenever I like on an ongoing basis
Assuming you mean "rent the ability to stream, so long as the company doesn't go under and limited to my own lifetime - and loses all value at death."
My husband learned a valuable lesson long ago when Yahoo Music shut down and all that copy-protected content he'd purchased went up in smoke.
He didn't say "everything worthwhile revolves around convenience", you condescending dick. He merely said when it comes to movies, it's far more convenient to stream it than keep a physical disc and player.
Flooding my Internet connection (slow DSL, naturally) so I can't use the connection is convenient?
Or, if I was using a major broadband ISP, is filling up my download cap with streaming data convenient? (I guess it is, or at least it's orthogonal)
Loss of quality is convenient?
Signing up to 5 different services to get a good library is convenient?
Figuring out which of the different services a particular title is hosted on, that's not terribly convenient.
Netflix's app for the Tivo is particularly badly designed -- ridiculously slow, as in there's a multisecond lag for every button press.
Oh, it's only available on blu-ray anyway? That's not convenient. I wanted to watch Better Call Saul season 2 the other night. It's been released on dvd. Netflix has season 1 for streaming only. DVD it is!
Many of these problems are the content companies' fault, and their fights with streaming services. Streaming would be a hell of a lot more convenient if the content companies had no say over who could and could not stream.
I just nab the disc out of the binder, put it in the player, and it plays! Now that's convenient.
Yup, you're old. You forgot to shake your fist and tell those streams to get off your lawn, though.
Socialism: a lie told by totalitarians and believed by fools.
You'd file an insurance claim if some DVDs were stolen, and expect the claim would actually be paid?
Yes. Over 200 DVDs and 100 Blu-Rays. Especially assuming I'd had other things stolen to hit a deductible and beyond, since these are in a closet in storage - they'd be the last thing to be stolen.
It's important to document your possessions, though. A few pictures of DVDs on a shelf, or a video of flipping through the DVD binder stored on Dropbox should do it.
Off of the top of my head examples of movies to watch more than once:
Princess Bride
The Quest for the Holy Grail
Sixth Sense (the second viewing is great)
Star Wars: A New Hope
Invincible Obsessed Fighter (okay, I'll admit, that's a personal preference that is probably shared with no one else, ever)
Almost anything from Studio Ghibli, with a rare few "wow, what was that" exceptions.
Many different anime series.
ANY movie or TV series that I enjoyed enough to want to share it with my child, or with other people who haven't seen it, when looking for an at-home movie night. (Firefly, Babylon 5, ST:TOS, Seasons 1 and 2 of Land of the Lost, Breaking Bad.)
As my disclaimer: I do enjoy Netflix, and it has tremendously reduced my DVD viewing. However, "Watch it again" is a very valid category on Netflix, even if the only ones I watch multiple times are a small minority of the movies I have watched.
I understand that some people don't want to see any movie more than once, or read the same book more than once... I kind of feel that way about baseball. I've seen a few baseball games, and I cannot imagine actually wanting to see another, though it may happen as a social event, sometime.
I will buy physical goods that I truly do own.
But the only thing you actually own is the physical disc, the content of that disc is licensed to you, you don't own it. So it's no different to the "ownership of digital goods", if you think it is then you simply do not understand it. Those "digital goods" (that are licensed to you) are stored on the storage device that you own (your hard drive) just as the "digital goods" (that are licensed to you) are stored on the physical disc that you own in the case of a DVD. The difference being that if the physical storage medium fails then if it's something I purchased online rather than physicall I can just re-download it.
More to the point,the publishers can't suddenly just delete it from the online library at a whim because of a licensing dispute, like when about one third of Netflix's offerings has disappeared over the last couple of years.
Yes, I'll pay for a movie in one of the common streaming services for $10-$20 per movie.
It's clearly a generational thing. Many older individuals can't seem to understand that dvds are inconvenient.
It's a cost/benefit analysis.
You can either watch something once for $10-$20, or you can buy the DVD for $5 and watch it as many times as you want, lend it out to friends, swap the entire collection in the classifieds with someone who has a different collection, put it on repeat for kids (if it is a kids movie - they often watch the same movie multiple times)...
Paying $10-$20 for a once off use vs paying $5 for unlimited, repeated use. Whether we are talking about movies or coffee-brewing is irrelevant, what matters is whether the savings from the $5 repeated use justify the inconvenience.
To many (non-lazy) people, the advantages of disks far outweigh the inconveniences of disks. After all, getting up from your couch and walking three feet to your player is fairly convenient to most people.
I'm a minority race. Save your vitriol for white people.
LOL!
The fact that you think you "OWN" your DVD is hilarious. Read your "LICENCING AGREEMENT"...
It's odd you mention "static licensing", and yet refuse to acknowledge how that does in fact define ownership.
When I want to watch a favorite movie or listen to music, I can put the media in my (dumb) DVD player, connect it up to my (offline) HDTV, and play the fucking thing anytime I want, all without any policing or sharing with 3rd parties who wish to sell everything they know about me and my activities to any bidder who comes asking. For the factors that matter (usage, privacy, and convenience), I own the fuck out of it, and quite frankly don't give a shit what the licensing "agreement" has to say, because it's irrelevant.
I also don't have to worry about some online service choosing to remove it from their catalog with little or no warning, reducing my capability to watch or listen to what I want to, whenever I want. Being a slave to a corporate catalog tends to dismiss the entire fucking point of paying for the convenience of it.
Hilarious? Listening to people who consume every product via online services talk about how they value and respect privacy. THAT is hilarious.