Tuesday, October 28, 2008

Blu-ray player prices dropping

If you've held off on buying a Blu-ray player because they cost $400, or -- if like me -- you're an early adopter who paid $1,000 and are ready for a second or third player for another part of the house, there's good news.

Electronics manufacturers and retail chains are slashing prices of Blu-ray players in a bid to boost adoption of the high-def movie format, which has yet to catch on with American consumers.

Entry-level Blu-ray players have dropped to below $230 at major retailers including Target, Wal-Mart and Best Buy. Some experts predict that promotional prices may fall below $150 on Black Friday, the big shopping day after Thanksgiving. Earlier this year, most Blu-ray players retailed for $400 or so.

Industry analysts believe stores may have been overly optimistic in ordering Blu-ray players for the holiday season. That's another factor behind the price cuts, especially since some older models in retailer inventories can't connect to the Internet, which is necessary to tap interactive features on some Blu-ray discs.

There is another motive for markdowns. Manufacturers and retailers want to speed the adoption of Blu-ray before digital-movie downloads and video on demand overtake movie disc sales and rentals -- a looming development that already may be damping sales.

Blu-ray movies depict images in 1,080 lines of resolution compared to 480 for DVDs. They were expected to make up a bigger slice of disc sales after Blu-ray won the backing of Hollywood studios earlier this year over the rival HD-DVD technology. But as of last month, only 4% of U.S. movie disc sales were Blu-ray, according to Nielsen VideoScan. Many consumers remain happy with mainstream DVDs, and "upconverting" DVD players that cost less than $100 can boost the image quality to a level that many consumers can't distinguish from Blu-ray.

Big-box retailers rely on sales of movie discs, not just because of the profit they generate, but because they lure customers into showrooms where they may be enticed to buy other items.

Sales of DVD discs have begun to decline, however, and Blu-ray has yet to take up the slack, leading some analysts to conclude that retailers risk losing sales to movie downloads, much as they lost CD sales to music downloads.

Cable-TV, phone and satellite providers as well as electronics makers are still piecing together the infrastructure and alliances necessary to offer a large library of downloadable and video-on-demand movies and TV shows in high definition. But as soon as that happens, "Blu-ray is done," predicted Rob Enderle, an analyst who advises companies including Microsoft and Hewlett-Packard on technology trends. "Retailers have every reason to be worried."

Blu-ray boosters remain optimistic that they will see a consumer breakthrough this Christmas season. They note that retailers are devoting generous shelf space to showcasing the technology, despite the soured economy.

The vast majority of the estimated 6.5 million Blu-ray devices now in US households are Sony Playstation 3 game consoles, rather than dedicated movie players. The Playstation 3 can play Blu-ray discs, but surveys show that gamers are not buying many Blu-ray movies.

The challenge for retailers such as Wal-Mart, which has been featuring eye-catching Blu-ray kiosks alongside inexpensive DVD players, is how to balance promoting the new technology with providing the DVD values that consumers crave in the current economy.

"We expect to see continued interest in Blu-ray this year as more people continue to embrace HDTV," said Kevin O'Conner, Wal-Mart's vice president of consumer electronics, adding, "We will continue to grow Blu-ray in line with the customer's desire." (info from The Wall Street Journal)

1 comment:

Anonymous said...

This had not happened before?