Vudu marketing and advertising strategy

[HeadHodge]

Re: Vudu marketing and advertising strategy

That works perfectly for Hodge math - 5,305 > 3,500. You'll get used to it after a while...... then again, he gets dyslexic when he's been drinking.

Although I agree with your assesment, if I go to Members List it shows 3940 Members

But the good news is that if the number is 5305 then Shultzy was wrong and the number of boxes sold should be: 79,575!!!

[Nded]

Re: Vudu marketing and advertising strategy

I read 5,305 on the forum home page.

That works perfectly for Hodge math - 5,305 > 3,500. You'll get used to it after a while...... then again, he gets dyslexic when he's been drinking.

[htheater]

Re: Vudu marketing and advertising strategy

I've noticed the number of new forum posters are increasing at a good clip.

There are now over 3500 registered forum users.

I read 5,305 on the forum home page.

[HeadHodge]

Re: Vudu marketing and advertising strategy

I have what I feel are pretty good reasons to believe that the total box number of Vudus out there is getting close to 50,000. It's some amount of speculation but I think my estimates are not all that far off.

I've noticed the number of new forum posters are increasing at a good clip.

There are now over 3500 registered forum users.

I think there's an argument to be made that an implicit correlation between the number of registered forum uses and the number of sold boxes exists.

If you took Shultzy's 50,000 guesstimate (or WAG) number that would make it around what? about 15 boxes per registered forum user.

It been stated multiple times by VUDU staff, that forum posters don't nearly represent the total number of VUDU owners.

Put that in your pipe and smoke it awhile.

[NA9D]

Re: Vudu marketing and advertising strategy

@htheater,

You bring up a lot of good points, but I'd like to correct a few misperceptions on your part:

- You are correct in that Vudu does not get the full cost of the box from Best Buy as there is a Best Buy markup there. But as stated, the Markup isn't that high. Even if we assume a 10% markup, that is still only about $10 to $20 depending on the current selling price. And given the fact that Vudu sells the box on their website for the full price with nothing going to anyone else, I don't think my average for the boxes over the last year is that far off.

- As for the BestBuy movie credits - I believe those are being footed by BestBuy which is one reason they expire. I'm not certain of this but I believe that to be the case.

- As for your comments about how Vudu's revenue stream from movie rentals doesn't take into account the money they have to pay studios, etc. - no kidding. I'm not talking profits here - merely revenue.

I have what I feel are pretty good reasons to believe that the total box number of Vudus out there is getting close to 50,000. It's some amount of speculation but I think my estimates are not all that far off.

As for Best Buy, I've heard scuttlebutt for some time that they were very interested in the box. It first rolled out at Magnolia only stores which Best Buy owns. Then as Vudu got their retail distribution model established and staffed, they rolled it out to more and more stores.

[htheater]

Re: Vudu marketing and advertising strategy

Just speculation, but consider the following.

Vudu was placed in 400 Best Buy stores (a subset of the chain). If each store averaged selling 1 per day that would be 2,800/week. If they each sold 3 per week, that would be 1,200/week. Certainly that isn't a fair reflection of the whole year, but now that they have ramped up and have product placement across the country, I don't think Jon's original scenario is an unreasonable guestimate.

Point taken, and, on the surface those numbers don't seem unreal, and I am sure that some BB stores are selling 1 a day, but not the majority (again, how about some input from our BB manager?). Assuming that BB keeps its interest in Vudu (see my previous comments on BB and Vudu), they can be a major factor in hitting that mark....only time will tell.

Vudu hasn't been in Best Buy for very long and, based on some knowledge, some investigation and some SWAG, they haven't hit anywhere near either of those figures...yet. Again, I am/was talking averages here and, obviously, the last 2 - 3 months have had to have been record setters and probably HAVE exceeded 1,000 per week, but I am not sure that they can maintain that.....yet!

I am not privy to any continuous inside knowledge, so I don't positively know what Vudu's average per week unit sales are, so I am also guessing, but, I have overheard some numbers and, based on that, their best week (ALL channels - BB, direct and custom install/specialty retail) hasn't hit the BB only speculation.

Even stocking the 400 BB stores (your number) at an average of 10 per store would only give 4,000 units that shipped out over several weeks for the Christmas push. BTW, the stores in our area that I talked to did not get 10 units per store (most got 6 or less), nor did they sell out over Christmas.

Before the Christmas push, one store I go to only had 1 box for sale and 4 wireless kits and knew nothing about it (I asked). I assume that they were waiting for the rest of the boxes. They eventually received 6 total units (plus the demo box) and they knew more about it, but were not fully informed of its features or limitations.

Don't get me wrong, I am NOT trying to be negative on Vudu as I like what I have seen (other than the network hogging issues) and want Vudu to succeed. I have sent out hundreds of mailers telling our better client's about Vudu, even though the margins on it aren't what I am used to....I like it that much and see it as an opportunity to offer our client's something relatively new and exciting!

[Nded]

Re: Vudu marketing and advertising strategy

Just speculation, but consider the following.

Vudu was placed in 400 Best Buy stores (a subset of the chain). If each store averaged selling 1 per day that would be 2,800/week. If they each sold 3 per week, that would be 1,200/week. Certainly that isn't a fair reflection of the whole year, but now that they have ramped up and have product placement across the country, I don't think Jon's original scenario is an unreasonable guestimate.

[htheater]

Re: Vudu marketing and advertising strategy

Keep in mind that none of us know what the Vudu business model really is. For example, if Vudu sells just 50,000 boxes a year, they could still make some decent sales.

Since Vudu hasn't published any sales numberst that I have seen, this is all speculation (including my comments), but, I don't think Vudu is anywhere near "just 50,000 boxes a year". That is about 1,000 per week. I would be shocked if they are averaging over 100 per week at this point.

Let's say the average box price is about $175 given the specials and all now. So that's $8.75 million.

I assume that you understand that the MSRP or even the street price have no real meaning for a manufacturer.....all that matters is what they get (dealer price less any discounts or programs). Vudu's margins are not large, especially on their entry level box sold at Best Buy. Add into the mix their specials (BB exclussive $200 movie credit, Vudu direct @ $149 w/$50 movie credit at Christmas and the current $99 offer). So, I seriously doubt that they are averaging $175 per box at this time, but, they ARE getting a much larger market penetration, which is good!

Now, let's say those 50,000 subscribers rent/purchase $10 worth of content per month. That's $500,000 a month in revenue or 6 million a year.

Again, $10 worth of content per month would not be $10 to Vudu as the studio's get their cut. On this figure, I think you are probably a little low as to the average, but, I have nothing to base this on other than a feeling of what my customers do (at least 1 movie a week on Vudu, more on BluRay and Kaleidescape). I also think Vudu will grow steadily and become the "go to" source for movies as their library increases, especially if they can move to Tier 2 release priority (what the airlines and Lodgenet are).

This would make Vudu a $14 million a year business. Not huge, but a lot of companies that I deal with every day are that size or smaller. If you have the correct business plan, you can easily survive with that sort of sales dollar as a start-up. Additionally, any good venture capitalist knows that a new business will need about 5 to 7 years after startup to really begin to turn a profit. Vudu is only a couple years into this now and still has a ways to go. But if you've got a smart VC behind you and a good business plan, it's not an issue.

So far my experience with Vudu is that they have a good business plan and a good set of VC backers.

Yes, many here might be surprised how many CE manufacturers would love to be $14 million a year or more. Even some well known, high-end brands. I don't think Vudu is anywhere near that figure....yet!

According to Vudu dealer training, their VC money is well above the typical start-up in this field adn they have some very tech savy backers. If it weren't for the current economy, I wouldn't have ANY concerns over Vudu and their VC sticking it out, but, in THIS economy, nobody is safe and it may have nothign to do with how sucessful Vudu is at the time if other investments force issues.

I also like most of what Vudu has/is doing so I too assume that they have a great business plan and are following it. I believe in the product and what the company has stated they plan to do!

Now, in terms of advertising, it costs money. If you are making your business plan w/o spending the money on adverts, why do it. I too would like to see more, but Vudu just got into Best Buy a few months ago and that looks like it's beginning to do fairly well for them. I'd like to see Vudu start advertising on line at least on sites owned by the likes of Capable Networks and similar providers of tech based websites. It would be a good start.

Nationwide advertising is difficult w/o having TONS of money. Vudu can't afford to compete with the types of Apple, Netflix, Blockbuster or Amazon, not to mention Microsoft. Even with a superior product, they have an uphill battle, but I like supporting the underdog, especially when they have clear advantages!

I have no idea how Vudu is doing in Best Buy. Maybe our resident Best Buy store manager will chime in with some figures (if he is allowed to).

There are some hurdles at Best Buy. First, Vudu can and will cut into their disc sales. Second, the margins are small. Third, Vudu is competing with them by selling direct. Fourth, Best Buy has education issues as others have discussed.

Will these hurdles be overcome? We will have to wait and see.

[FinalMacGyver]

Re: Vudu marketing and advertising strategy

Well, if they let go of training managers, those managers must not have been performing well or something. What Vudu needs to do is train the BestBuy staff on how to promote the product. I've been to some BestBuy stores where the Vudu is really well promoted and displayed in multiple places. I've been to a couple others where the box is poorly promoted. In one store, they didn't even have a working unit hooked up. If Best Buy promotes the box well, it's a good and easy sell.

Well I can say, being a manager for Best Buy, that vudu has my buy in and my support in my store.

[NA9D]

Re: Vudu marketing and advertising strategy

Like I said, some Best Buys have great coverage. One near my office has a Vudu prominently on display in their main Magnolia center with the demo running. It has another Vudu at another spot in the store in a kiosk type place where you can play with it. I've been in other BestBuy stores where the sales people definitely knew about the Vudu and had even purchased them for themselves. But then still in other stores, the coverage is very poor. It varies and it's too bad.

[techm8n]

Re: Vudu marketing and advertising strategy

Well, if they let go of training managers, those managers must not have been performing well or something. What Vudu needs to do is train the BestBuy staff on how to promote the product. I've been to some BestBuy stores where the Vudu is really well promoted and displayed in multiple places. I've been to a couple others where the box is poorly promoted. In one store, they didn't even have a working unit hooked up. If Best Buy promotes the box well, it's a good and easy sell.

I went to a BestBuy were their sales people didn't even know what a Vudu does. The boxes were out in the open but for a regular customer passing by, they woundn't know what they're looking at.

Vudu should setup a Vudu self demo kiosk in BestBuy so customers can demo the product in the store. The kiosk will have a Vudu box, a TV, and advertising stickers/paint all over. "Vudu, the movie rental store in a box."

Hey Patrick,
I hope you take some of these ideas to take to your next marketing group during your brainstorm/meeting sessions.

Post more ideas everyone!

[NA9D]

Re: Vudu marketing and advertising strategy

Well, if they let go of training managers, those managers must not have been performing well or something. What Vudu needs to do is train the BestBuy staff on how to promote the product. I've been to some BestBuy stores where the Vudu is really well promoted and displayed in multiple places. I've been to a couple others where the box is poorly promoted. In one store, they didn't even have a working unit hooked up. If Best Buy promotes the box well, it's a good and easy sell.

[boc1073]

Re: Vudu marketing and advertising strategy

Vudu has attemted to have Training Managers in Best Buy locations during the holidays to drive sales and also just to bring up the awareness of the product.
But the problem with this is that for alot of people this type of technology is just way over there head, and thus Vudu let go several of those people the week of Christmas! It was a great idea, but just not executed the correct way....

This is a fantastic product and I hope it continues to grow, but with NO advertising at all it may be a tough climb.

[Patrick]

Re: Vudu marketing and advertising strategy

See my sig for a link to the Facebook App

[jleavens]

Re: Vudu marketing and advertising strategy

If you use Facebook, install the Facebook for VUDU application in your Facebook account and let people know what you're watching on your VUDU!