Walmart announced yesterday that it will be slashing prices to below wholesale on 10 of the most popular DVDs that will be released soon, says the LA Times. Target announced that it will be matching Walmart. Amazon has not yet responded.
The LA Times says:
The price cuts are welcome news for movie studios because it could spur demand in a year of flagging DVD sales. The wholesale price paid by Walmart and its competitors remains unchanged at about $18, meaning studios will make the same profit despite the discounting.
It’s normal for retailers like Walmart to price DVDs below their wholesale cost at stores and online to draw customers who often spend more money on other items.
Although discounting is not unusual for Walmart and Target, the new $10 price means the retailers will incur a big loss on each sale.
It comes as the two companies and Amazon engage in a price war over books that has driven down the price of some hardcovers to $9.
Will these new unsustainably low prices get you to skip Redbox or Netflix and actually buy a DVD?
Walmart, Target slash online prices of popular DVDs [LA Times]
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Looks like Amazon is already responding. The Blu Ray combo pack for Harry Potter is going for $16 right now.
@americangame:
Amazon had Star Trek for 10 bucks yesterday.
@americangame:
It’s $10 now for Harry Potter non-BR DVD
[www.amazon.com]
That is the same or slightly less than the price of the actual movie ticket. Less than half if you include a date’s ticket!
Wait; list price for a DVD is still around 30 bucks? What is this 1998?
I hope this price war is still happening when BLACK DYNAMITE is released on DVD.
walmart.torrents coming soon
Sorry retailers. As long as DVDs still retain the properties of a solid (most particularly mass) I will forgo the price wars and stream.
@AHepburnGuy: Agreed. That whole taking up space business is no good either. I don’t want to store DVDs, especially if I am not going to watch most of them multiples times.
@AHepburnGuy: I have to agree, its not like a video game that you want to put down and likely pick up again, so buying that type of media makes sense, as you may play it many times over the course of a month.
Most people watch a movie and then aren’t going to watch it 3x or more in the same month. I know that when I watch a movie I most likely never want to watch it again simply because there isn’t enough time when I could be playing a game or watching another movie. I would rather not see a shelf of DVD’s that I spent a lot of money on collecting dust and not being used.
@AHepburnGuy: I fear for the day when Comcast/Verizon/whoever start throttling bandwidth, or create tiered prices, or start charging for bandwidth.
We buy DVDs that we’ll want to watch multiple times. I plan on getting Star Trek and Watchmen this year; probably as Christmas gifts.
Yeah Amazon had slashed prices on all of these DVDs to $10 as of several hours ago.
HOORAY! Lets put all of the Mom & Pop stores out of business, so eventually the only job options left will be in “food services” and working at Wal-Mart!!!
@suburbancowboy: i love it when people say that because walmart started as a Mom & Pop, they just grew, alot.
@captainpicard: I have no problem with a Mom & Pop business growing and being successful. I have a problem with it once they grow huge and predatory and do tons of unethical things that are just plain bad for America.
@suburbancowboy: predatory yes, unethical no. My wife and I had this argument last night. Yes, walmart sucks, yes walmart lowers prices to drive out competition, yes walmarts goods are of low quality, yes walmart does not pay thier employee’s enough, yes there are instances of walmart managers (individual person) making employees work overtime without pay.
Yes, we all know that walmart sucks but at the same time we cannot ignore that walmart is a business (and a successful one) and will continue to do what is best for business.
@suburbancowboy: I’ll happily take walmart/target/etc lowering prices and putting businesses under if it saves me money on my crappy security guard pay (hey, at least I’m working!).
Amazon may not have publically commented, but they did reduce the prices to $10.
Walmart is taking a loss by selling a 3-cent disc in a 10-cent case for $10?
@chocobo: The electro-mages that etherically imbue the disks with the movie-essence charge like $30 an hour, though.
@chocobo:
I don’t think Wally world is paying $.13 to their distributors for those movies. Yes the manufacturing may have cost that much in materials but I doubt that walmart went direct to the stamping plants, everyone in the middle will take a cut plus management, etc..
so saying .13 is a big unrealistic and over dramatic.
@chocobo: If Walmart pays $18 for the same disc, then yes. Walmart doesn’t manufacture them and you fail to consider the price of the rights to the film… film production ain’t cheap.
@chocobo: Way to actually read the article. Good job, gold star.
If Walmart buys something for 18 dollars, and sells it for $10, it’s a loss. No matter what producing the item cost.
I never really buy DVDs anymore, though I do often ask for them for birthday/Christmas gifts from my grandmas. It’s nice being able to give a specific title to a gift-giver, especially something that they can find in their local Wal-Mart. I do the same thing with books.
Hmmm…moral vs. financial quandary…wife works at Target, get 10% off all purchases, which makes movie only $9, but Target loses money. Do I spend the extra $1 to buy it from Walmart just so they lose? Or will the $1 expense hurt me more than it hurts them?
Screw it…I’m getting it at Walmart. Hate those bastards.
I hope Target pricematches because I don’t want to give any money to WalMart
What do they charge for the Beta tapes?
I’d start buying DVDs again if the MPAA and retailers would admit that it doesn’t actually cost $18 to sell to the store and start charging realistic prices for the product. $10 is a realistic price for a DVD and Blu Ray. Would you rather have product more people buy, or product that fewer buy at a higher price? That’s what these greedy subhumans need to figure out.
@zombie_batch: Yeah, I was thinking maybe $10 is the sweet spot if they sell 3 or 4 times as many, they could find they do real well.
Netflix streaming wins my money. I don’t want to own any dvds. Take up too much space.
Walmart doesn’t pay wholesale.
@nstonep:
For the movie studios, yes, they do. Maybe they pay a smidge less (i.e. if Bob’s Video is paying $18, Walmart is paying $16.50-17), but they’re paying essentially the same price as Amazon, Target, Best Buy, etc.
@NeverLetMeDown: Plus they get back end deals like ad co-op funds and other considerations when they feature a movie title in a circular.
But since they buy direct from the studio, not through a wholesale distributor, their up-front unit cost is probably right about $17.
@pecan 3.14159265: I just pre-ordered it for my Dad’s birthday on DVD for $15 on Amazon, he’s been a Trekkie since the first series…I really wanted to see it again too so it kills two birds with one stone!
Frankly, I’d still buy it from Amazon even if it’s available at Walmart for five bucks cheaper. Amazon has better customer service than Walmart, so they’re a step up in my book. I always order $25 worth so I like the convenience of free shipping to my door.
Plus, no receipt checking!
@Oranges w/ Cheese wants it to be winter already: Hm.. Indeed. Maybe Wal*Mart will work out a lower price for them to purchase at as well.
There are few movies that I actually buy to own.. Most are just good to Netflix. Allthough I’m getting disapointed with Netflix because they seem to be favoring “rental only” versions of DVDs that are suverely lacking in extras, and I’m a nerd who loves DVD extras.
This price drop might actually get me back to buying some DVDs.
@Oranges w/ Cheese wants it to be winter already: They may cost a dollar to produce, but there’s still the matter of, you know, the studio maybe wanting some money, and whatever goes to the actors, writers directors… This isn’t just a matter of spending a dollar to burn public domain images onto a disk.
@Oranges w/ Cheese wants it to be winter already: The cost of physically producing and packaging the disc itself is only a tiny portion of the money you’re charged for it. Any number of entities have their hands in the till, as it were: The production company, the distribution company (i.e. what most people refer to as “the studio”), and other third parties get some of that. Not to mention there are royalties and residuals paid to a number of people, including the director, script writers, and actors.
Not that I think none of these people should be paid … just pointing out that they have to be, which is why the DVD you buy costs so much more than just the disc itself. Compared to all of that the disc is trivial.
@Oranges w/ Cheese wants it to be winter already:
I was about to disagree with you citing the costs of production; however for any movie that does reasonably well in the theaters, the cost of production is already covered by the theater gross. Therefore, yeah, these things probably do cost about $1 to produce; however I’m sure that Target and Walmart will still be losing money on them.
Business School Term: “Loss Leader”
@Oranges w/ Cheese wants it to be winter already: My understanding is that Walmart is actually paying $18 for these and selling at $10, so they will lose money. They try to make it back with the assumption that if you buy a DVD there you will buy other things, too.
@Loias: If only I were rich enough to buy each of them…
I could host my own “I-bought-each-of-these-movies-so-Walmart-could-take-an-eight-dollar-loss” movie party.
@Loias: They assume wrongly.
@Loias: Yes, if you only buy the DVD from them then they will lose money, but if you buy the movie they are hoping that all of the other things you may buy while your in the store (toilet paper, deodorant, popcorn, candy, pop) will make up the difference.
The only thing newsworthy about the story is that Star Trek DVD is going to be ridiculously cheap, stores do it all the time. Milk, eggs, bread all discounted really cheap hoping that you’ll buy steak, chocolate syrup, ceral, fruit to make up the difference.
@Loias: You would be helping walmart as it’s always their goal to eliminate whatever competition they can. Since 99% of consumers only care about price, they know they can vastly undercut everyone else, eliminate all competition then charge whatever they want a few years down the road.
@Loias: 30-40 consumerists readers aren’t going to hurt Wal-Mart.
@mizike: It has been quite a few years for Walmart how far down the road are we looking? I think there will always be someone else.
@shepd: Well you wouldn’t have to go quite to zero. I’d buy far more DVDs if they were maybe $5. I do buy certain ones anyway like ST.
Or I just use SwapaDVD.com – it’s free and great.
@pecan 3.14159265:
I prefer amazon because it goes straight to my mailbox with no shipping charges or sales tax.
Figure the gas and the time (at least 1.5 hours) to go to Wally World and you loose in the long run.
@DefineStatutory: Once a DVD is cheap enough, why even bother?
@tonsilpool: It takes you an hour and a half to get to Wal-Mart?! Wow. Target is about 7 minutes from me.
@xl22k:
“the cost of production is already covered by the theater gross.”
Basically, never. A movie that does very very well in the theaters will come close to covering its production costs through box office, but most don’t. DVDs are where the studios, overall, actually make a profit.
@NeverLetMeDown:
my uncle still has two, one he uses, he has the machines stacked on his tv in the following order, VCR – BETA – DVD PLAYER. He just got the dvd player like 3-4 years ago, he actually still has Star Trek 3 on beta in his basement. He has this thing where he is like stuck in decades it he just got out of the 70′s – 80′s and slowly getting into the 90′s …..
@HalOfBorg: I like SwapaDVD.com’s testimonials.
I suppose MailAndRipAndMailaDVD.com is a bit wordy for a domain name.