Thread: Price fixing? No Chinese players allowed

A Sony Blu-ray Player, but No Cheap Chinese Models - Bits - Technology - New York Times Blog

March 5, 2008, 3:57 pm
A $299 Sony Blu-ray Player, but No Cheap Chinese Models

By Saul Hansell

Stan Glasgow, the president of Sony Electronics, held his semi-annual update today in New York, and there were a few new tidbits.

He was, predictably, bullish on the fate of the Blu-ray disc format, now that Sony’s technology has won against Toshiba’s HD-DVD. He acknowledged that the company now has to convince people they need to upgrade their DVD players .

He talked of a slow steady decline in the prices of Blu-ray players, which Sony now sells for $399 and up. He said that prices will fall to $299 for this Christmas and may be under $200 by the end of 2009. Sony isn’t the only one that makes Blu-ray players; Sharp, Samsung and other big electronics companies also compete with Sony.

Mr. Glasgow expressed hope that price levels wouldn’t collapse the way they did for DVD players. To protect against this, he said the Blu-ray Association, the group that controls the Blu-ray standard, has not licensed it to any manufacturers in China. (Cheap players from China were a large part of the collapse of the DVD player market.)

“Will there be Chinese players? Yes,” he said. “We don’t need to drive that and hand the technology over” any time soon, he said.

Mr. Glasgow also said that he didn’t see the market for Blu-ray undercut by movie downloads in the next few years. Given the speed of most home Internet connections in the United States, downloading a movie still takes hours, he said. Discs, moreover, are still popular because people can hold them and give them to others.

“People like owning packaged media,” he said. “Downloading will build over time, but it could take ten years for significant penetration.”

That said, Sony is working on a initiatives to enable customers to download video programs on to a variety of devices including PlayStation game consoles, some Bravia televisions, and the next generation of Blu-ray players that will include an Internet connection.

He confirmed reports that supply of L.C.D. panels for televisions will be in short supply this year, keeping prices firm. Sony, he said, has contracts in place to assure the supply it needs.

As for the dicey state of the economy, Mr. Glasgow expressed optimism, noting that Sony aims at higher price points favored by more affluent buyers. Nonetheless, the company is trying to reduce the amount of inventory it has in its supply chain so it can respond quicker to fluctuations in demand.

“We think the Sony brand holds up well during difficult economic times,” he said.

It was cheap Chinese players that allowed DVD to become the most successful consumer electronics product ever and replace VHS in record time. Everyone keeps saying Blu-Ray prices will come down just like DVD. If Japan, Inc. had price fixed DVD the way they want to do Blu-Ray Joe6Pack would still be using VHS players because DVD players would still be $150-200.

Impatient. Let it drop over the years, just as DVD did. Can't expect instant cheapness. Blu-ray provides a premium over DVD, and charges for it. Over the years, the premium will diminish.

I certainly agree with "ten years for significant penetration” as regards downloads. Maybe in 10 years the cablecos will have deployed a significant number of those new docsis 3 modems.

APEX the chief Chinese price driver (sold of course at Walmart) turned out not to be paying the licensing royalties for DVD. They do not want to let this happen again.

More sales at a lower per-sale profit, of fewer sales at a higher per-sale profit. It's their business, they can run in however they want.

But I don't think withholding licensing from manufacturers will do a whole lot to stop some Chinese factories from making BluRay players though, if what was said about APEX is true. "Licenses? We don't need no stinking licenses!!!" It's not just Chinese factories, it happens many places where there is a profit to be made. If something appears overpriced for what it is, cheaper copies will be made. Some copies might be somewhat functional, others terrible. You certainly place your bets and take your chances buying one, but it seems silly to think withholding a license will stop them.

So what should BluRay do? Withhold licensing. There's not much else they can do. Ultimately it will probably be futile, but it may work in the short term to gain them a bit more profit.

Originally Posted by haertig

You certainly place your bets and take your chances buying one, but it seems silly to think withholding a license will stop them.

It might for a while.
There are very few component manufacturers (Sigma, Broadcom, NEC) that won't sell you the parts until paid (kjack talked about it more than once).

But I don't think this can last for a long time (1 year max, I believe).
And certainly the notion "China didn't pay DVD licenses" as the reason for cheap players is debatable...

Diogen.

Originally Posted by navychop

Impatient. Let it drop over the years, just as DVD did. Can't expect instant cheapness. Blu-ray provides a premium over DVD, and charges for it. Over the years, the premium will diminish.

I certainly agree with "ten years for significant penetration” as regards downloads. Maybe in 10 years the cablecos will have deployed a significant number of those new docsis 3 modems.

What an elitist thing to say. Who can be patient with the economy the way it is? $80+ to full up a car never mind a loaf of bread and you’re all for being patient so Sony can have extra time to squeeze more money out of us. You must be on their payroll that’s the only explanation for you getting more and more ridiculous with each post. Sony is clearly kock blocking the Chinese to keep prices artificially high against the American consumer. How you can’t see that and be disgusted is beyond me.Your BD love is starting to boarder on unpatriotic.

DAMN, I hate Sony !!!!!!

Originally Posted by nonrev

What an elitist thing to say. Who can be patient with the economy the way it is? $80+ to full up a car never mind a loaf of bread and you’re all for being patient so Sony can have extra time to squeeze more money out of us. You must be on their payroll that’s the only explanation for you getting more and more ridiculous with each post. Sony is clearly kock blocking the Chinese to keep prices artificially high against the American consumer. How you can’t see that and be disgusted is beyond me.Your BD love is starting to boarder on unpatriotic.

Why should they allow cheap Chinese players? They own the technology they can do what they want with it. Perhaps they feel allowing manufacturers make a profit will lead to higher quality players. Perhaps they want BD to be considered upscale? What ever the reason the market will still make the final decision if they do not gain enough adoption before the next big thing comes along.

If people like you get mad because of what you consider high priced tactics then they will not succeed, but if you give in and buy a player and movies anyways then they win.

Originally Posted by nonrev

What an elitist thing to say. Who can be patient with the economy the way it is? $80+ to full up a car never mind a loaf of bread and you’re all for being patient so Sony can have extra time to squeeze more money out of us. You must be on their payroll that’s the only explanation for you getting more and more ridiculous with each post. Sony is clearly kock blocking the Chinese to keep prices artificially high against the American consumer. How you can’t see that and be disgusted is beyond me.Your BD love is starting to boarder on unpatriotic.