Closing DVD & Blu-Ray Pricing Site

Almost a year and a half ago, we added DVD and Blu-Ray prices to the site. Unfortunately, over this time period the movie price features have not caught on with users. We have decided to close the movie site on February 19th.

The movie database is much larger than the game database and costs us several hundred dollars every month in server fees. When you include monthly costs for development time and maintenance, we are spending nearly $500 a month operating this portion of the site.

We plan to devote these resources towards video games instead by adding new features, improving our database, and potentially hiring some developers for future projects.

Thank you to those users who did use the movie prices. We are sorry we need to close it, but hope you can understand.

Do Streaming Movies Decrease Demand for DVD's?

More and more movies are available instantly through streaming services like Amazon Instant and Netflix Instant Queue. A customer has the option to stream it directly into their home and isn't forced to buy a DVD in order to watch the movie. Does the electronic availability of these movies change the price of the DVD?

Below is a table showing the change in price for a random selection of movies based upon availability on Amazon Instant and Netflix Instant:

The average price for a DVD in our study dropped 58% if it was available on Amazon Instant, but only 47% if it was not available for streaming through Amazon. A difference of 11 percentage points, which is statistically significant (see methodology below).

The average price for DVD's available on Netflix dropped 51% compared to a drop of 48% for those not available instantly. A difference of 3 percentage points, but is within the margin of error.

Why does Amazon's instant movie service decrease demand for DVD's while Netflix's service does not? This can be attributed to the types of customers using both sites. Amazon sells DVD's and offers customers the chance to stream the movie on the same page they offer to sell the DVD. If streaming is not available a large portion of them would buy the DVD. But when streaming is available it cannibalizes some of those customers.

Netflix on the other hand does not sell new DVD's and their users are more accustomed to renting DVD's. If the movie isn't available via streaming they will probably choose to add the DVD to their mail queue instead of buying it. So there is very little if any change in demand for DVD's caused by Netflix's service.

Methodology: For this study we randomly selected 112 DVD's released during 2010 from the Comedy, Action, Adventure, Sci-Fi, Drama, Horror, Animation, or Family genres and calculated the drop in price from the original MSRP to the current New price. We then looked to see which of these 112 movies was available on Amazon Instant Video and/or Netflix Instant as of May 16th 2012.

The average price change was calculated for those movies available for streaming and those not available and a statistical test to see if the difference between the two averages was meaningful (statistically significant). The test of two means was significant with a 99% confidence between the Amazon available and unavailable movies, but was not significant for the two Netflix averages even at a confidence of 90%.

Avengers Increases DVD Prices 48% for all Avenger Heroes

The Marvel characters who make up the Avengers are Iron Man, Captain America, The Hulk, and Thor and all of them have their own movies before The Avengers came out this past Friday, May 4th. Resale prices for these DVD's in new condition increased 48% after Avengers came out and unit sales jumped 27% too.

Reason for the Big Increases

More than 17 million people saw The Avengers during its opening weekend and it grossed a record setting $207 million in three days. After seeing the new movie, many of these people decided to buy the DVD's for the individual characters as well, which increased demand.

Supply wasn't able to increase as quickly as demand did so prices increased to compensate - Economics 101.

Methodology:
Price: The price shown is the average price for a brand new DVD sold on eBay. The 'before price' is during the last week of April and the 'after price' is the average from May 4th to May 9th.

Units Sold: This is the average number of units sold per day on eBay and only includes new condition DVD's. The 'before' and 'after' time periods are the same as those used for the price calculations.

The DVD's used in the analysis were Captain America, The Incredible Hulk, The Hulk, Iron Man, Iron Man 2, and Thor.

Movie Sequels Increase DVD & BluRay Prices of Original Movies

Sequels are big business in the movie industry. In 2011, 27 movies were sequels which equals nearly 20% of all movies released last year. When these sequels release in theaters they increase the prices of the original movies on DVD and BluRay. This can be very helpful for DVD collectors to know so you can save some money building your collection.

For this research we used ten movies with sequels released in the second half of 2011. We analyzed the used movie prices a month before the sequel released, the month of the release, and a month after release. The movies included are:

Title	Sequel Release Date
Paranormal Activity	October 21st 2011
Paranormal Activity 2	October 21st 2011
Happy Feet	November 18th 2011
Sherlock Holmes	December 16th 2011
Mission Impossible	December 21st 2011
Mission Impossible 2	December 21st 2011
Mission Impossible 3	December 21st 2011
Twilight	November 18th 2011
The Twilight Saga: Eclipse	November 18th 2011
The Twilight Saga: New Moon	November 18th 2011

Click for Larger Chart

The chart above shows the DVD prices for the original movies before, during, and after the sequel released. The average price increased 58% during the month of the sequel's release. Then the month after release prices decreased 16%.

Click for Larger Chart

This chart shows the prices for Blu-Ray movies before, during, and after the sequel released in theaters. Blu-Ray prices didn't increase as much as the DVD prices with an average increase of 22%. The subsequent decrease was smaller as well, only dropping 7% a month after the sequel.

How to Use This Price Data as a DVD Collector

Knowing that DVD and Blu-Ray prices increase when a sequel comes out can save you money as a collector. Be sure to buy the original movies before the sequel releases or you will end up paying a 50% premium.

Or if you are looking to sell some movies from your collection, think about selling movies the same time a sequel is released.