Neil said:
>One of the things that got almost completely ignored about DVDA is that you don't have to put in surround mixes. It's not mandatory. It is almost as if the record industry just is not interested in physical media - all they want to do is dumb it all down with shitty MP3 sales (free money, really).<
As someone who produced many DVD-A titles for one of the majors I can tell you exactly why there are no more DVD-A titles being produced.
Nobody bought them.
You see, every title that a record company produces has a P&L statement. This details all the expenses that are involved in producing a title (production, mixing, artist royalties, publishing royalties, marketing, replication, archiving, artwork, overhead, etc.) and then computes how many actual units need to be sold to break even.
For most DVD-A titles, the news was grim. This is why the record companies flirted with formats like DualDisc and MVI... they were trying to fix a non-profitable situation.
Not enough people bought DVD-A to make the format profitable. Almost every title lost money.
And this serves to highlight one of the essential truths in the record biz, which may be unpleasant to hear, but I am gonna say it anyway:
There are probably only 10,000 to 20,000 people in the US who care about high-res audio and/or surround sound music. This may be enough of a market for niche labels to survive for awhile, but it's not enough of a market for the majors to devote limited resources to addressing.
If you are a label and you have limited staff, and limited budget, are you going to have your staff work on titles that don't make any money? Or are you going to shift them to something that has a better return on investment?
And while it's true that DVD-A's can be stereo-only, our own market research showed over and over that consumers just didn't care in any significant numbers. Not enough to move the needle.
I'd also like to counter Neil's statement that selling MP3s is like "free money." It isn't. My company spends a significant amount of money on building and maintaining a digital asset catalog of all of our active albums. Money that in the past would have been spent on disc replication now goes to infrastructure costs of building and maintaining the audio asset and metadata library, and delivering files to partners. Plus we still have to make CDs.
The biggest problem that the record companies have encountered is this: the dis-aggregation of the album. Where before the business model was built on the selling of the album unit for $12 or whatever, now the model is based on consumers buying single songs as MP3s. This represented a tremendous drop in revenue ("free money" indeed!). So now the labels are making only a fraction of the revenue from a release because many people buy only one song. The business has become even more hit-driven as the album model slowly fades away.
ClarkNovak said:
>Neil hit it on the head. The labels don't care about physical media - digital distribution gives them HUGE profits with no manufacturing.<
You have no idea what you are talking about. See above.
>One of the things that got almost completely ignored about DVDA is that you don't have to put in surround mixes. It's not mandatory. It is almost as if the record industry just is not interested in physical media - all they want to do is dumb it all down with shitty MP3 sales (free money, really).<
As someone who produced many DVD-A titles for one of the majors I can tell you exactly why there are no more DVD-A titles being produced.
Nobody bought them.
You see, every title that a record company produces has a P&L statement. This details all the expenses that are involved in producing a title (production, mixing, artist royalties, publishing royalties, marketing, replication, archiving, artwork, overhead, etc.) and then computes how many actual units need to be sold to break even.
For most DVD-A titles, the news was grim. This is why the record companies flirted with formats like DualDisc and MVI... they were trying to fix a non-profitable situation.
Not enough people bought DVD-A to make the format profitable. Almost every title lost money.
And this serves to highlight one of the essential truths in the record biz, which may be unpleasant to hear, but I am gonna say it anyway:
There are probably only 10,000 to 20,000 people in the US who care about high-res audio and/or surround sound music. This may be enough of a market for niche labels to survive for awhile, but it's not enough of a market for the majors to devote limited resources to addressing.
If you are a label and you have limited staff, and limited budget, are you going to have your staff work on titles that don't make any money? Or are you going to shift them to something that has a better return on investment?
And while it's true that DVD-A's can be stereo-only, our own market research showed over and over that consumers just didn't care in any significant numbers. Not enough to move the needle.
I'd also like to counter Neil's statement that selling MP3s is like "free money." It isn't. My company spends a significant amount of money on building and maintaining a digital asset catalog of all of our active albums. Money that in the past would have been spent on disc replication now goes to infrastructure costs of building and maintaining the audio asset and metadata library, and delivering files to partners. Plus we still have to make CDs.
The biggest problem that the record companies have encountered is this: the dis-aggregation of the album. Where before the business model was built on the selling of the album unit for $12 or whatever, now the model is based on consumers buying single songs as MP3s. This represented a tremendous drop in revenue ("free money" indeed!). So now the labels are making only a fraction of the revenue from a release because many people buy only one song. The business has become even more hit-driven as the album model slowly fades away.
ClarkNovak said:
>Neil hit it on the head. The labels don't care about physical media - digital distribution gives them HUGE profits with no manufacturing.<
You have no idea what you are talking about. See above.
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