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Summary:

There’s been a lot of chatter recently about the value of movies. Studios are duking it out with Redbox over its $1-per-night movie rentals, and now Amazon and Apple’s iTunes appear to be locked in a price battle over digital downloads. Video Business notes how both […]

iTunes_MoviesThere’s been a lot of chatter recently about the value of movies. Studios are duking it out with Redbox over its $1-per-night movie rentals, and now Amazon and Apple’s iTunes appear to be locked in a price battle over digital downloads.

Video Business notes how both digital distribution outlets are cutting prices not just on catalog titles, but on new-ish releases as well. For example, iTunes is running a back-to-school sale with many older titles selling for as little as $4.99 (though I’m vexed by what back-to-schooler would want The Paper Chase). Relatively new releases like The Curious Case of Benjamin Button and Slumdog Millionaire have also seen their prices slashed.

All this price-cutting got me thinking — what is a movie worth? I realize that’s subjective, but that’s precisely why I want know what you think.

An anonymous executive with an indie studio speculated to Video Business that the price cuts are part of a digital land grab as the two powerhouses try to get an early market share advantage in this nascent industry. That certainly seems like part of it, but there are probably other factors at play as well.

One of which is a perception that digital downloads should be cheaper than their physical counterparts. Downloads don’t come with packaging, artwork, or any of the other extras bells and whistles that can accompany a DVD. It’s hard to justify a big sticker price when you literally have nothing in your hands to show for it.

Then there’s Netflix, which offers tons of movies and an all-you-can-watch subscription model that can makes it seem like you’re not paying anything at all. Not to mention the rerunning of old movies on plain ole TV.

The whole industry is in a state of flux as we move from physical to digital goods — including the pricing of said goods. As I was thinking about this post, and what I would or wouldn’t pay for a movie, music downloads came to mind. Music is creeping up from the former industry standard flat rate of 99 cents a track to $1.29 for new songs (at least on iTunes). I, however, can’t imagine paying more than 99 cents for a song — whether it’s brand new or decades old, I derive the same basic entertainment from it.

But it’s different for a movie. There’s no way I’d pay the same amount for Watchmen that I would for Misery (though Misery is the better movie). Is it because unlike music, we can see how dated a movie is from the clothes, hairstyle and special effects? I’m not sure. It’s probably a combination of factors.

But I want to know what you think. How much is a movie you can watch at home worth to you? One dollar? Five? Does it matter if it’s a new release or old movie? Weigh in below, in the comments section.

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  1. A good movie is a joy to behold. But should an indy movie made for a couple of million dollars cost the same as a studio made feature costing over a hundred million?

    On a personal level, I cannot justify renting a movie for viewing by myself for over a couple of dollars. For a family, perhaps five dollars. And to buy, I’d buy a pre-viewed DVD/BRD at under fifteen dollars before I’d pay the thirty dollars they usually ask for new. As a download, I feel ten dollars is fair, as they have few extras and I do like the “making of” features.

    I’d like five dollars to buy an older (good) movie rather than a two dollar rental.

    I just wish there was a clear answer to the question of what a movie is worth. Perhaps it is only in the mind of the beholder…?

  2. The question does not make sense. I’d pay nothing for Watchmen. And not much more for Misery (and by the way, most savvy people never ever pay for digital content). Now, for a Murnau or a Fritz Lang or a Godard in remastered HD with real serious and thoughtful encoding (I’m not talking MPEG-2 or MPEG-4 or BD) and actual hi-fi sound (NOT psychoacoustics compression), I think I would be ready to shell out some dollars. In a few years maybe the industry will catch up with the audience. Until then, we’ll enjoy watching Hollywood execs reshuffling the deck chairs on the Titanic while being outhustled by Jobs, Bezos and Netflix…

    1. Wow, Manu,

      Remind me to invite you to my next screening of “Goonies.”

  3. In theory prices should come down as we move to an era of ubiquitous entertainment. That’s the good news.

    But the quality will not be as good as a premium version of the same product.

    Entertainment continues to gravitate toward a long-tail effect. To see what I mean go over to TCM.com and see the huge number of groups especially “fans of…”

    I see packaging mashable experience as a future way to capture higher revenue. Take the Thin Man series of movies. Sell high quality DVD that includes all amazon.com books on the film series as well as on Loy and Powell and you have a viable upscale product.

    Make it accessible for its owner anywhere anytime and away you go. Tie it into tickets to an annual film festival at an added price……

    So price is subjective but can be driven by the seller.

    1. Hey Keith,

      I like the mashing idea. Bundling the books and movies would be cool, though I’m not a fan of physical DVDs anymore.

  4. Andrew S Allen Saturday, August 22, 2009

    The worth of something is such a relative thing. There are many things that I would tell you I’d never buy—like a leaf blower. But, you know, if the price of that leaf blower dropped low enough to, say $5, I just might buy it. Now it wouldn’t make sense for a leaf blower maker to sell it to me for such a low price because the cost of manufacturing alone is well over $5. However, once we start talking about digital distribution, where the price of selling a copy of your product is next to nothing, the model changes. Now any sale at any price is a plus.

    I don’t know where this leads, but imagine a model where prices are set by consumers (check out the lending site Prosper, http://www.prosper.com). Where products that are valued more by the general public also carry a higher price tag. Or imagine if every price was negotiated (not unlike purchasing an item from a market in a third-world country). There’s market potential in the power of the well-connected consumer that has not yet been tapped.

  5. I’ll gladly pay $20+ to watch (download or stream) a new release in the comfort of my home.

    This is the market that the studios need to address. Instead of dealing with the hassles of going to a theater I’d much rather pay a premium to watch the new release at home. I am not alone in this for most of my friends and colleagues agree. I’ll pay $20-25 for this privilege. Have my own food, my own sound, my own home.

    Studios: Are you listening? Make your films available to viewers at home via Streaming or Download. People will pay a premium to watch the films and you can eliminate the hassles and costs of distribution. Your margins will increase and your audience will grown.

    Get it? Give the viewer the option at a premium. They’ll take it when they can.

    1. Chris Albrecht Adam Monday, August 24, 2009

      Funny you should say that, Adam. I was talking with a person who works at a studio who suggested that exact same pricing. $20 seems kinda high to me, but I see your point.

      1. To me its about convenience. Its a royal pain in the ass to get to a movie theater these days. If you have kids you need a sitter, if you live in a metro area you need to worry about parking and traffic. And then there is the dirty theater, the overpriced and usually bad popcorn, the loud and rude theater goers,etc.

        I’d love to be able to watch a new release on my own schedule, on my own couch. To me that’s worth a huge premium.

        Besides if you do have kids you’re looking at at least $40 to see a movie with your significant other. Fuel, parking, food, beverage, tickets, baby sitter…

        $25 isnt to much for a family to watch a movie now is it?

  6. Tricky question. Is/should value of a product be based on scarcity, quality, distribution cost or personal enjoyment and repeat usage? It is probably a mixture of all of the above but in the end, a product can only be discounted so much based on reduction of it’s distribution costs.

    The real value of a product, in my opinion is based on the personal enjoyment that one gets from exposure to it. If the enjoyment / cost ratio (including the manufacturing, distribution, royalties…) is too high, sales will drop and a manufacturer (studio, indy producer…) will either have to stop making the product, or make the product cheaper (outsourcing to foreign economies, use new technology, use less known actors…).

    If there is a real desire for the product at its pricing, then people will accept to pay a premium, at least for a while. Then it is likely that eventually, the industry will want to create cheaper version of the product (think of all the B movies emulating tentpole releases) and by then, technology will probably have new offering that will help achieve that – i.e.: shooting HD instead of film, using greenscreen instead of traveling to location, broadband delivery instead of VHS rental…

    But in the end, in my opinion, the enjoyment value is what justify what a film is worth.

  7. A Call for New Pricing Models for Digital Content ‹ Short of the Week Thursday, September 17, 2009

    [...] was reading NewTeeVee recently and their weekend question caught my attention: How Much is a Movie Worth? The standard now seems to be $.99 rental, $4.99 old release, $9.99 new release. I love feature [...]

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