Zoo Digital Technology with a market set to grow strongly

I posted the chart ranking v unit sales figs. a few weeks ago. Seems most didnt want to believe them at the time, but with NOW at 4 in the charts and only just needing to take re orders from initial 150k placement, its worth re posting the figures again. WWTBAM has failed to crack the top 10 so is looking at a cumulative and perhaps optimistic 100k units, all the others barely registered so perhaps worth ignoring.
On the positive side, NOW should guarantee mileage in the format for next xmas, on the negative side, Universal seems to have failed to launched a new genre with iDVD's although likely to persevere for at least one more year.
Its perhaps no suprise when calculating income for Zoo that the company is very much focussing on the wider and more general DVD production market as income from these specialised niche iDVD products is very limited.
The key issue is that although Zoo see's its product as being able to produce all DVD's there are already some extremely strong encumbents in that position, not least being Sonic with the largest market share. Zoo will not only have to develop the software but also shift Sonic, which will not be a mean feat in the coming years.



In peak xmas weeks an indication of ranking in sales charts related to units sold.

Rank 1......650,000 units

Rank 10.....40,000 units

Rank 20.....9,000 units

Rank 30+....Less than 1,000 units

The very rapid fall off in numbers sold once outside the top 3 is very similar to the games market.

If we take an iDVD ranked at 15 and it can hold that position for 4 weeks then unit sales in the region of 80,000 units.

Prices vary considerably but wholesale at av. £7. For a Zoo produced DVD this income is split between production/Distribution/Marketing/Publisher-IP owner/Zoo.
Its fair to say that this is a very different market to the console games sector. Production costs are certainly substantially less, but so are the available margins/income.

Income from 3rd party royalties are dependant upon agreed unit fee and volume sales.
A game managing to achieve 15th position for a month would sell in the region of 80,000 units, this would generate a royalty in the region £16k-£28k for Zoo, assuming a royalty in the 20p-35p area as quoted by Zoo. Obviously this income increases massively if a game can achieve a top 3 position.
Currently the relatively few iDVD's in the market are in the 15th-30+ ranking positions. It will be interesting to see if one of them can break into the top 10 in the final run up to Xmas.