A vendor is selling a set of VHS copies to professionals who use the tape for some type of accreditation, lets say a set of 10 VHS tapes costs $500.00.

One of the purchasers of the VHS set of 10 tapes calls the vendor and says they have already purchased the VHS set but because they travel quite a bit a DVD version would allow them to view the series while they are on a plane, in the hotel, in several more places than they are currently able to view the VHS tapes, plus the DVD's will take up significantly less room.

What should the vendor offer the customer who has already purchased the VHS set but needs a DVD version?

It would depend on what you need to do:

1. does he want a full blown DVD with menu's or a movie only disc

2. how many hours you are working on this to:

- encode the footage
- author the disc
- send it to the replication facility or burn

3. how many the replication facility charges if you are going that way

4. costs of the media itself

5. does he want a cover that needs to be designed and printed

I assume you definitely want to charge the time it costs for you
to make all of this happen. After that it should be a duplication
price probably.

It may also fall under "service to the customer", depending on
the kind of orders the clients has done or is probably going to
do etc. etc.

Sometimes the company I work for offers a reduced hourly rate
if we know the client is going to order a lot or has mulitple
projects they want to do with us.

anybody that pays $500 for 10 vhs tapes deserves the dvd copies for free, or worst case, at dupe cost only... that would not include making up menu's, covers, etc... i'm talking about just knocking 'em off on a dvd-r desktop recorder.

To be clear, specialized types of videos that educate the viewer towards accreditation or renewal of accrediation in their field most defninitely charge a premium, their target market is very small, very educated and usually makes good income.

Lawyers, Doctors, and Engineers are types of service professionals are usually required to keep updating their knowledge base even after they graduate from college. They can attend educational seminars and then afterwards order videotapes. Others simply go online and order videos of the event OR of some other "expert" who's video is "officially" approved as being pertinent educational material.

These types of videos typically sell for around a hundred bucks each (but there usually is a substantial discount, as much as 50%, if there is a series of say 3,5 or 10 videos), that just is the price because the cost of creating the video has to be amortized via a limited amount of upper scale potential buyers.

The basic question I am asking is if the client has already ordered a VHS copy but now realizes they could use a DVD copy as well how should the company handle the request?

Should the company go to their price list and simply tell the customer who has already purchased the VHS version that the DVD is x amount and that is what they must pay that amount even if they have already purchased the DVD version?

Should the company offer a discount on the DVD because the customer has already purchased the VHS version?

Should the company offer an exchange?

Keep in mind the company usually wants to be paid for everything they release because inevitably they may be ripped off and the last thing they want to do is help their own demise by giving out extra copies of their product for free.

I've decided to move your thread to our "business" forum, hopefully
your thread will get some more attention here.

Seems to me, that there are two questions here.

Should a company create a 'special order' at the request of a specific client?

Should the company create dvd's as a marketing option and be made available in the future?

If this is the first such request, and you think it's not likely to happen again, then charge a premium for the straight dub. "This is a special request that we would be happy to comply with, this will cost you xxx"

If the company thinks this is a viable marketing strategy, then perhaps this is the beginning of a marketing push. "We are in the process of creating DVD's of our material, if you can wait until xyz, then you may order additional copies at a discounted rate of XXX"

Most media are available in different versions, but seldom marketed together as a package. In other words.. "$25 dollars for the VHS, or $35 for two DVD's" or some such tag.

Just my thoughts.

<<<-- Originally posted by Rob Lohman : I've decided to move your thread to our "business" forum, hopefully
your thread will get some more attention here. -->>>

Good idea, thanks Rob!


I'm not sure what I'm after. I'm just trying to understand a scenario that keeps the client happy without harming revenue or creating additional copies.

It seems nowadays that having only DVD or only VHS for educational materials could be a disadvantage. DVD is definitely more portable, but VHS is still entrenched all over the place.

These days, have "only DVD" is really not an issue unless your target market desidedly biased toward owning only VHS.

Where do you see VHS entrenched in a location with no DVD player available? (just curious)

Market penetration for consumer players is there now. Most computers and laptops now come with DVD players installed.
Best of all, DVD replication costs are typically much less than for VHS.

What are their current inventory levels on the VHS set?
What are VHS sales rates like?
What is the video content like?
(lots of long talking head and static bullet lists can be compressed to fit more video on fewer DVDs than lots of "demonstration" action which would start to degrade if compressed too far.)

If inventory is low enough that a new VHS production run would be coming soon anyway, it might makes the most sense to just author a DVD conversion with basic chapter menus and make a production run of DVDs. Then offer the DVD's to existing VHS clients for $75-$100.

Also offer the program as a DVD set to new buyers for $550.

Just some ideas based on very limited information.

"Where do you see VHS entrenched in a location with no DVD player available? (just curious)"

--------------

Airplanes, public locations where where people are "stranded" for a while and have time to study something, generally, these situations involve DVD and not VHS.


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"If inventory is low enough that a new VHS production run would be coming soon anyway, it might makes the most sense to just author a DVD conversion with basic chapter menus and make a production run of DVDs. Then offer the DVD's to existing VHS clients for $75-$100.

Also offer the program as a DVD set to new buyers for $550."

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That is an interesting solution.

<<<-- Originally posted by Alessandro Machi :
Airplanes, public locations where where people are "stranded" for a while and have time to study something, generally, these situations involve DVD and not VHS.-->>>

Agreed.
I think you may have interpreted my question in reverse, though.

Sure, there are lots of examples today where a DVD could be played, but not VHS.

With DVD players selling for under $40 these days, I'm actually curious to hear if there is a significant market left where there is only VHS, no DVD. :)

About 2 years ago I quit buynig anything on tape. No cassettes, no VHS. There were several programs I wanted at that time, and when I contacted the vendors they said "sorry, not enough demand, VHS or nothing, dubbing costs too much, yada yada." I chose nothing. All of those programs are now ONLY available on DVD (but they might have a few VHS still in the warehouse).

A $500 program should be available on DVD. If they make it only DVD, they will probably not get a gripe. If they switch over early, their existing VHS inventory will last longer than the actual tapes will.

Having said all of that, any decent vendor will EXCHANGE for a small charge, if they now offer DVD. They usually want the old ones back so the tapes don't end up on eBay. If company does not offer exchange, people can go buy a DVD recorder for $250 and make their own dubs, and then sell originals on eBay anyway to pay for the DVD burner.

DVD recorders are not that cheap yet, so there still are situations where someone needs to record something and they don't have room for both a DVD and VCR, and although now there are combo units those are more costly so not everyone owns those yet.

Some furniture made to support a large television and only has room for one unit, so until the person buys a combo unit, it's quite possible all they have is a VHS.

So then the new question is, why sell the VHS tapes at all?

<<<-- Originally posted by Alessandro Machi : DVD recorders are not that cheap yet, [snip]
So then the new question is, why sell the VHS tapes at all? -->>>

I assume you were responding to my $250 price comment, so this one took me about 15 seconds to find:

http://www.bestbuy.com/site/olspage.jsp?id=1076627908927&skuId=6308024&type=product

They are that cheap.

And why indeed sell VHS at all? Maybe for grandma, but not for the $500 training programs. Even my mother has a DVD player on her computer.

I was referring to Nick's $40.00 comment.

I was going to mention burning to DVD as well. It seems to be generally recognized (I'll let someone like Paul weigh in on the true legality) that end-users have the right to format shift the media that they own (eg, records to tapes, CDs to MP3s, VHS to DVD, etc) -- barring any unique disclaimers in the EULA, etc, for specialty items.

And, in fact, set-top DVD recorders are about to cost as low as $99 (http://www.digitimes.com/news/a20050303A2004.html) -- as soon as next month.

Add to that folks like a lot of us here, who own DVD burners and the relatively inexpensive tools needed to convert VHS to DVD.

My point? To me, all these factors add up to the need to not alienate existing customers. Some of them certainly don't want to pay much more than it would cost them to get a DVD recorder (currently around $250, soon to be $99) and do it themselves. Heck, they can even return the DVD recorder when they are done and get their money back, if they really want to. So you have to come up with a price point that covers costs (obviously) as well as the time factor.

If this is a rare occurance, and you are just dealing with one customer, it might be worth it to cut a deal for cost plus a little something extra (assuming you'll just burn copies of the tape onto DVD-R for them) and make that one customer happy. If there is a larger interest, then you may want to consider adding manufactured DVDs to your product line. You can then send a mailer out to your existing customers, offering them a limited-time-only steep discount on the DVD versions of tapes they already own. After this limited time offer is up, everyone -- old and new -- gets charged the same price.

I dunno, this all sounded a lot more intelligent when I intended to post it last night, but now the coherent thoughts are slipping away. Hope you can make sense of it...

These are all good points, I'm most interested in the situation where a buyer has already bought the VHS version and then realizes the DVD would come in handy also.

Perhaps they swap out the VHS's for the DVD and pay a small premium?

Customers tolerate 'VHS only' simply in the case of specialist content they fear may be hard to find otherwise, Alessandro.

But if you think it's legitimate to sell 'VHS only' well... surely you should charge him all over again for the DVDs?!

My own opinion: realise the DVDs for free, apologise for the inconvinience and tell him that soon it will be an option upfront when purchasing!

You have to treat customers right.

But what if both the VHS and DVD's are available at the time of purchase. It is only afterwards that the client realizes they potentially would have been better off with a DVD either exclusively or in tandem with the VHS.

One assumes the original high price is to liberate the specialist content. Therefore one could argue that subsequent orders of the very same content - already paid for remember - should be closer to normal prices of videos that length, irrespective of video format..

..also, if they're willing to simply swap unopened product, then surely that's absolutely fine and, eh, doesn't require a charge?!

<<<-- Originally posted by Alessandro Machi : These are all good points, I'm most interested in the situation where a buyer has already bought the VHS version and then realizes the DVD would come in handy also. -->>>

This is what I was trying to cover, although in a very groggy fashion. If you think the demand for DVD is greater than just the one customer mentioned in your original post, then you may want to consider adding DVDs to your product line. Once you do that, you can offer existing customers a special "we've put everything on DVD" discount on DVD versions of VHS tapes they have already purchased from you -- an "upgrade special" you might call it. I'd say they could keep their current VHS copies and simply buy the DVDs at a discount -- perhaps you would ask them to include some proof of purchase of the VHS version. If the DVDs will normally be priced at, say $500, then selling them at even $100 to existing customers (for a *limited* time) is still a profit for you. Once the limited time sale is up, all customers old and new will have to pay the $500.

(Since they customer can simply format-shift to DVD with relative ease, as mentioned in my previous post, I see no benefit in asking for the VHS tape back.)

Such a plan not only encourages your current customers to buy the DVD from you rather than format-shift to DVD on their own (which is why I mentioned it previously), but also has two other effects:

1) People who may have not on their own considered needing a DVD copy will be encouraged to buy one based on your smart salesmanship and low introductory prices (which still net you a reasonable profit). Include language in your mailer such as, "Experts say DVDs will last up to 100 years, far longer than VHS" etc etc... that will encourage this untapped sector of your customer base to upgrade.

2) It reminds your current customers that you are there and have a new product that might interest them. Perhaps they never considered buying Volume 2 of their specialty video while it was on VHS, but now that it's available on DVD, maybe it is worth that extra $500. Perhaps you can offer existing customers a 10% or 20% discount on any other DVDs they buy when ordered at the same time as their DVD upgrade.

This "upgrade discount" for current customers should be available only for a limited time.

As for you question of "what if both the VHS and DVD's are available at the time of purchase" -- in that case I would have a steadfast rule of "DVD is full price." Or perhaps allow for exchanges *only* within the first 2 weeks or maybe 30 days. And/or allow an exchange of any *unopened* product, as mentioned by Graham. Otherwise customers will simply take advantage of you -- if it's obvious that you sell *both* DVD and VHS, the customer has a certain amount of personal responsibilty to buy what they need and not be a complete idiot. DVDs are certainly prevalent enough that the average customer should be expected to know which format they need.

To clarify on format-shifting, please see Paul Tauger's comments here: http://www.dvinfo.net/conf/showthread.php?s=&threadid=40532

Unfortunately, as I had considered, it only applies to audio recordings. Which means that if your customers are transferring VHS to DVD, then technically they are breaking the law...