CD And DVD Marketing And Sales

Selling CDs and DVDsI asked a friend, who works for a national music retailer – who was once head of purchasing for their largest store:

How are CD and DVD sales doing?

His response touches on full-screen and wide-screen formats, DVD quality, and sales. I replaced reference to his employer with “Mega Corp” so he won’t get fired when CBC and CNN gets wind of this.

Well, DVD sales are on the rise, as there are still a lot of casual movie fans buying DVD players. Strangely, at my store we have seen an increase in Full-screen sales vs Wide-screen. Usually we sell 80% or more Wide-screen vs Full-screen – since most movie buffs want to see what they saw in the theatre. However now we are selling a slightly higher percent of Full-screen, as more moms and other casual fans are buying DVDs, and they hate the black bars on the screen.

Whenever I ask someone; “Do you prefer Full-screen or Wide-screen?”, I always then have to explain it to them. Full-screen is a poor way to describe it – so some companies call it Pan and Scan – which is more accurate, they pan back and forth from one talking head to the other, and zoom in or out to crop it for your TV. When you say Full-screen, people often say; “Oh I hate those black bars that cut out some of the image – I want the whole picture not with the top and bottom missing.” Then I have to explain to them that it’s exactly the opposite. Then they usually still say they hate those bars and buy the Full-screen. I’m talking about women and casual movie watchers.

People also often say; “Oh I don’t have a wide-screen TV so I can’t watch those Wide-screen DVDs.”

In the next few years, all TV will be broadcast in wide-screen, and people are going to want to re-buy all their DVDs.

The real rip-off there is that some studios manage to put both WS and FS on the same disk, and not charge more. However most studios make you choose one or the other – fuckers.

CD sales are down. There are still big hits, and all that, but overall it’s down.

Mega Corp however is absorbing the last bits of the Canadian market. So where CD sales might be down 12%, we are down 2%. Where DVD sales might be down year on year, we are up slightly. Essentially as smaller companies go out of business, or just run their businesses poorly – Mega Corp is grabbing market share. Sales might be down overall, but we are getting a bigger portion of the sales that are out there, therefore making more money bottom line.

There are still big competitors who are cheaper than Mega Corp, like another Mega Corp, or and another Mega Corp, but they are losing market share to Mega Corp despite price. Obviously Mega Corp picks and chooses which titles to drop prices on to make a good price perception with the public. Overall, Mega Corp gets better ratings for customer service and selection – although this varies from store to store.

The studios are always heading in the wrong direction, like now putting out Blue-Ray or HD DVDs. Few customers care. You will notice a big difference in quality if you are going from VHS to DVD – if you buy a new TV, you will notice a change in quality. But if you buy one of these new formats, you will only see a change in quality if you already have the highest end TV and system – otherwise the quality difference will be negligible. It’s like buying a super duper high quality stereo and then listening to it with shit speakers. The quality of the medium has gone way beyond the ability of most systems that will play that medium, so who cares.

In order to combat downloading the music the labels are always adding DVD or Dual-disc content which is harder to download. However they foolishly make the mistake of charging more – which defeats the whole idea. Every fucking artist has a regular album and then a limited edition extra bonus track DVD album version that is $10 more. Fuck that. Either stand behind your art, or not – don’t bitch it up with crap to help sell more expensive product. If you think the extras are worth it, put them on the regular release and keep the price the same, then it actually is “Bonus Features” – if you pay more, it’s not a bonus at all.

Mega Corp is looking into the idea of dropping prices on back catalogue in order to drive sales. Less money made per disk, but hopefully more disks sold. IF it works, they can strong arm the vendors into essentially splitting the loss with Mega Corp, so that Mega Corp does not take the burden alone. The vendors obviously want to sell more, but they would rather sell to Mega Corp for more money, and have Mega Corp sell product cheaper – in the US, the vendors used to have stronghold where they told the retailer what to charge, which is horrible in that they are determining your profit margin. That never happened here. In the US, they sold it under the idea that this would allow mom & pop stores to compete with big chains, as the chains would not be able to discount titles purchased in volume. Usually that discount went into marketing – not price.

Uh, that was a long winded answer.

5 thoughts on “CD And DVD Marketing And Sales

  1. Just another note. You probably shouldn’t be buying DVDs at all right now unless you’ve got the cash to spare for a double library. All North American broadcast and TVs are also moving to High Definition. Current consumer DVDs cannot play (hold the data for) an HD movie. So presumably, in 3 years when the blue laser land grab finally sees a winner and consumer models besides the Xbox 360 and Playstation 3 are out, all DVDs will be re-released in HD.

  2. Even if everything is re-released on HD in a few years, 10 years later (or less), everything will be re-released on the next format. There’s still a lot of compression involved in putting a movie on a single disc, so there’s plenty of room for improvement.

    The good thing about HD TV becoming the worldwide standard is that it eliminates the PAL / NTSC discrepancy (I think).

  3. methinks mega corp starts with an H and ends with a V. :o

    i don’t buy DVDs, i download them. the wife buys far too many TV seasons on DVD though…. :(

    Until new releases are below 5$, where they BELONG, you still won’t get either of us to buy another CD that isn’t Tool.

  4. I know plenty of people who download movies because the DVDs are too expensive. But that also goes to show that most viewers don’t give a crap about quality.

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