(Suggested) Retail Price - Changes?

[mmacklem]

I was reading an article today talking about a recent Supreme Court decision this week in the U.S. that essentially gives manufacturers the right to determine a minimum price that retailers can sell their goods for. I live in Canada, but most of my purchases of DVDs are from U.S. online retailers like Amazon, and I'm curious to know if anyone has any idea what a change like this would indicate for DVD sales? Any lawyers on this forum, or at least anyone who knows more about this than I do?

[patrick]

Honestly, I doubt it'll affect much of anything other than maybe we won't see as many crazy loss leader sales around the holidays. Even if the studios/manufacturers have the right to set their minimum prices, they know what side their bread is buttered on and they won't want to risk pissing off the big chains (Wal-Mart, Target, Best Buy, etc.) by fucking with pricing.

However, I honestly think a little price control wouldn't be a bad thing - I'm convinced that the rapid devaluing of DVDs by both manufacturers and retailers has accelerated the death of the format.

Do you have any links to articles about the decision?

EDIT: Everything that I'm reading is pointing at this being helpful to brands that are sold as luxury items, kind of reinforcing my idea that I don't think this is going to hit the DVD market as much as stuff like home theater components. Plus, I don't think the brick & mortars are complaining about this, it's going to be the internet discounters who have the most to lose.

[Sanjuro]

It occurs to me that this is the reason DVDs in Japan are so damn expensive. Especially with the Japanese movies, no matter how old they get it seems like they NEVER come down in price.

[Antoine Doinel]

This won't affect DVD pricing at all for two reasons:

First, there are several specialty DVD labels that already either verbally or contractually have retailers they work worth with commit to a minimum price limit. There were a good handful of DVD companies I worked with over at the e-commerce company who actually put that policy into place so as to level the playing field for all of their customers or to not diminish the value of their brand.

Secondly, it actually costs more for the studios and DVD companies to keep a warehouse full of stock, than to sell it. That's why they absolutely love the WalMart dump bins or slashing prices on back catalog product that isn't moving. That's also why there is a whole sub-industry of wholesalers who buy bulk, old DVD product from the studios directly and offload it to their clients.

[mmacklem]

I was asked for links earlier, here's the news article that first alerted me to the ruling.

There were some other anxious poli-blog rants decrying the ruling that got me further into the issue, but those will probably only divert the overall DVD-specific discussion.

[patrick]

First, there are several specialty DVD labels that already either verbally or contractually have retailers they work worth with commit to a minimum price limit. There were a good handful of DVD companies I worked with over at the e-commerce company who actually put that policy into place so as to level the playing field for all of their customers or to not diminish the value of their brand.

Interesting, I work at a store that rents and sells DVDs and I've never heard about it - however, I suppose one of the easiest ways to control pricing is to control wholesale costs. The profit margin on most DVDs is so low (about $5 most of the time, unless you're talking about box sets or specialty product like Criterions) that I assume the manufacturers don't care if Best Buy or Wal Mart want to sell their product at a loss or near-loss - they get paid either way.

[Antoine Doinel]

I work at a store that rents and sells DVDs and I've never heard about it - however, I suppose one of the easiest ways to control pricing is to control wholesale costs. The profit margin on most DVDs is so low (about $5 most of the time, unless you're talking about box sets or specialty product like Criterions) that I assume the manufacturers don't care if Best Buy or Wal Mart want to sell their product at a loss or near-loss - they get paid either way.

The thing that made the company I worked for different is that we moved a huge amount of product within a given month, so from DVD companies we were usually buying product at about 50% off the suggested retail list price. Thus our markup was usually pretty low to make sure we were the lowest price on the net whenever possible. The odd thing is that the companies that wanted the minimum price limit still sold us product at hugely discounted prices. I never understood why they just didn't sell us their product at a price that would ensure we would have to sell it at the price they wanted.

But yeah, the majority of DVD companies really don't care what you sell it for because they are paid before it hits the store or virtual shelves. They just care about how much product you are buying from.