WSJ: Retailers Slash Blu-Ray Player Prices

[Bobby H]

Good luck. You can't ignore software either.

Do you think standard definition only DVD sales are going to sell well for many more years? I don't. The fact DVD will never be anything more than standard definition is enough to ultimately doom the format.

The demand for HD-quality content is growing. The main focus of competition between Dish Network and DirecTV is centered squarely around HD. The main thing customers are demanding is more HD channels and more HD content on them. In 103 days, analog TV broadcasts will be finished and switched to digital. Most local TV stations now broadcast their primary network channel in HD. Many of us satellite TV customers are demanding our local channels in HD if we're not getting them that way already. SD is going to be finished.

While this stuff is brewing, Blu-ray is slowly but steadily carving out larger percentages of overall movie disc sales from DVD.

Check out this article at DVD File by Dan Ramer:
Nattering Nabobs of Negativism from DVDfile.com

As for the wild card of HD digital downloads, some bad news may step in the way of that:
AT&T to try limits on monthly Internet traffic - Yahoo! News
AT&T, one of the largest Internet service providers in the nation, will being to use caps on Internet bandwidth. Customers who use the standard 768kb/s DSL service will be limited to 20GB per month. DSL Pro users will be limited to 60GB per month. DSL Elite users will have a 150GB limit. Most AT&T DSL customers have the basic service -and that would only allow a handful of AppleTV 720p movie downloads (if each movie is only 4GB in size). Customers will pay $1 per GB for going over the limit.

Rivals like Comcast have higher limits on their caps, but will simply cancel a customer's Internet account if they repeatedly go over their bandwidth limit.

This is going to have a chilling effect on a lot of high bandwidth download traffic.

 

[navychop]

Yep. No "Magic Fairy" is going to make high speed HD movie downloads over the internet into a major competitor with BD sales and rental for many years. Bandwidth to the home simply doesn't grow that fast. One day, yes, but not now. Obstacles to that kind of downloading are popping up faster than the HD downloading itself. ISPs don't want to be stuck suddenly losing money by not constraining such bandwidth demands. Cable, Fios and satco PPV & VOD will carry on. Internet delivery will be slow to grow.

Surely after the digital transition, knowledge of and demand for HD will grow rapidly. I suspect HDTV sales will get a boost after 2/17. People will see PQ improvements, prices will decline further, and sales of HDTVs will rise over the year as they realize how much better their picture could be. 2009 should be a banner year for BD adoption and sales, if the economy allows. Xmas 2009 should be Very Interesting.

 

[navychop]

And that was an interesting article. His price comparison showing less than $2 of a premium for those titles for BD over DVD was interesting. Certainly the margin is greater for titles over all, but certainly not the massive difference some claim. Four fold cost premium? Really?

People can stomp their feet and say it ain't so - but Blu-ray is here to stay. And as a mass market player.

 

[diogen]

Look at the hardware side of the situation. That's the first area where DVD is going to be hit. Electronics companies will phase out the production of new DVD players. I'm predicting most will disappear from stores within 18 to 24 months.

Why?
Can we agree that both hardware and software makers won't do a darn thing without having at least a chance to maximize profit?

BD players will always be more expensive to make: Blu-laser OPU, new codec licensing, higher MIPS chips. Hence, at any given time a DVD player can be made for half what BD player costs. If there is demand for DVD players, they will be manufactured.

Do you think standard definition only DVD sales are going to sell well for many more years? I don't.

I do.

The fact DVD will never be anything more than standard definition is enough to ultimately doom the format.

Yes. Ultimately. Ultimately, we all end up dead...

What triggered the high-definition revolution (if you can call it like this)?
Studios' and CE manufacturers desire to give you - the consumer - more pleasure?
To make sure you - the customer - have the highest quality audio/video today's tecnology can handle?
If you believe in this, I have a bridge for sale you might be interested in...

Studios wanted to stop the pirates. Nothing else. They still believe each download is a lost sale.
Combined with Sony being pissed for 10 years for losing the DVD war and developing Blu-ray all these years, it finally clicked.

What do we have now?
Despite all the efforts and declarations that BD+ protection won't be hacked for 10 years, Blu-ray is as open to pirates as DVD is.
And BD execs are finally smart enough to keep their mouth shut and not to promise it will be fixed. Because it won't and everybody knows it.

What will make studios excited about releasing in BD going forward (excluding Sony for whom this is a Crusade)?
And studios have been known not to be the smartest kid on the bloc, but why would they stop making DVDs?

I believe only consumers can kill DVD. And they won't in the foreseeable future.

Diogen.

 

[Bobby H]

Can we agree that both hardware and software makers won't do a darn thing without having at least a chance to maximize profit?

No. We won't agree. It's an undeniable fact that DVD players are no longer profitable. That especially goes for the $50 and less models. They're loss leader items. Blu-ray players are still at a price where a retailer and manufacturer can still squeak out a little profit on the product. DVD players are a money wasting charity case anymore.

If there is demand for DVD players, they will be manufactured.

Not if there isn't any profit in making them. And certainly not if retailers stop stocking them.

What triggered the high-definition revolution (if you can call it like this)?
Studios' and CE manufacturers desire to give you - the consumer - more pleasure? To make sure you - the customer - have the highest quality audio/video today's tecnology can handle? If you believe in this, I have a bridge for sale you might be interested in...

Try backing up that statement with actual specifics rather than meaningless, insult-toned hyperbole.

If you think the general public doesn't care about high definition, then you might as well believe the Earth is flat too.

Studios wanted to stop the pirates. Nothing else. They still believe each download is a lost sale. Combined with Sony being pissed for 10 years for losing the DVD war and developing Blu-ray all these years, it finally clicked.

Are you wearing a tin foil hat?

 

[diogen]

Bobby,-

no offense, but you seem new to this.
Not a single argument you brought up wasn't beaten to death, resurrected and beaten to death again... Many times over. On this very forum.

DVD manufacturing is profitable. For Chinese. It is US' problem they can't make a buck manufacturing them... When talking about a loss leader look at the PS3...

And there is nothing that can stop retailers stocking them. JVC is manufacturing and Costco stocking DVD+VCR combos...

Try backing up that statement with actual specifics rather than meaningless, insult-toned hyperbole.

Insult? Insult is quoting a Blu shill Dan Ramer as an authority and expecting anybody to buy that crap... Except for the bluboys, of course...

If you think the general public doesn't care about high definition...

WTF? Where did I say that? I worship HD.
I said CE companies don't care what you want.
And if you don't believe that, "try backing up that statement with actual specifics"...


Diogen.

 

[teachsac]

Do you think standard definition only DVD sales are going to sell well for many more years? I don't. The fact DVD will never be anything more than standard definition is enough to ultimately doom the format.

Yes. I already gave you the numbers for software and hardware sales for the first 2 quarters. Software sales are the same as 2007. Harware sales have dropped, but have not been replaced by the same number of BD players. DVD hardware sales are still at 11 million players for the first half of the year in NA. More of a sign that more than 12 million players were sold during Q4 of 07 and a bad economy. Standalone players in NA were only .7 million for the entire year.

Do you think standard definition only DVD sales are going to sell well for many more years? I don't. The fact DVD will never be anything more than standard definition is enough to ultimately doom the format.

Overall, people are happy with DVD according to NPD research and that is BD's biggest hurdle to overcome.

The demand for HD-quality content is growing. The main focus of competition between Dish Network and DirecTV is centered squarely around HD. The main thing customers are demanding is more HD channels and more HD content on them. In 103 days, analog TV broadcasts will be finished and switched to digital. Most local TV stations now broadcast their primary network channel in HD. Many of us satellite TV customers are demanding our local channels in HD if we're not getting them that way already. SD is going to be finished..

Sure. But what percentage of customers are HD customers. SD outside of the locals will not be going away. Look how many shows aren't even HD. They may be digital, but it's not HD.

While this stuff is brewing, Blu-ray is slowly but steadily carving out larger percentages of overall movie disc sales from DVD.

On a good week, BD sales on average are still running at 10% of DVD sales. Once in a while a top title like Iron Man will drive it up to 13%. Studios are not going to give up 23.7 billion dollars unless there is a guarantee that BD sales will meet or surpass DVD sales. That number will drop and BD sales will supplant some of it. Players are still profitable for Chinese manufacturers. One reason why Japanese companies outsource.

WOuld I like Hd to be the norm with absolutely everything? Sure. Otherwise I wouldn't have been an adopter of both formats at inception. But be realistic. The best that will ever happen is that in 18-24 months, sales of BD players and movies will surpass DVD sales. But, DVD will never be totally replaced and gone with either hardware or software. It's been discussed in the past that studios package both the SD and HD together to force people into buying BD even if they only want the SD copy. That hasn't happened yet either. Why? Studios want the most profit possible. ANd they are profiting off of both. THe biggest profit for studios is still DVD.

S~

 

[meStevo]

On a good week, BD sales on average are still running at 10% of DVD sales. Once in a while a top title like Iron Man will drive it up to 13%. Studios are not going to give up 23.7 billion dollars unless there is a guarantee that BD sales will meet or surpass DVD sales. That number will drop and BD sales will supplant some of it. Players are still profitable for Chinese manufacturers. One reason why Japanese companies outsource.

Those numbers are misleading though, because that's on a title by title basis. Iron Man may have been 13%, but the overall BD v DVD sales remain well below what was expected. From the original post, there is this graph:

It makes you wonder what Sony was thinking when they said Blu-Ray would capture 50% of the market this year. 50%. And they said that in April. Now look at the graph, and look at the progress they'd made up until April. Wow. I'm not even sure where they're getting the 20% the article states, how can this data be spun to read that... only new releases or something maybe?

First article in Google i could find about Sony's statements: Punch Jump :// NEWS - Sony projects 50% Blu-ray market share in 2008 - Tech

 

[teachsac]

Those numbers are misleading though, because that's on a title by title basis. Iron Man may have been 13%, but the overall BD v DVD sales remain well below what was expected. From the original post, there is this graph:

It makes you wonder what Sony was thinking when they said Blu-Ray would capture 50% of the market this year. 50%. And they said that in April. Now look at the graph, and look at the progress they'd made up until April. Wow. I'm not even sure where they're getting the 20% the article states, how can this data be spun to read that... only new releases or something maybe?

First article in Google i could find about Sony's statements: Punch Jump :// NEWS - Sony projects 50% Blu-ray market share in 2008 - Tech

GOing by Home Media Research Group's numbers for the last 2 months. Average BD total sales has been 10% of DVD sales with a high of 13% and a low of 8% the week of 9/21.

I knew the article was around somewhere. It was on my old computer which crashed. 20% share, as claimed, is unrealistic as only 700,00 standalone BD players were sold last year and there is no way of knowing how many PS3's are used for BD playback. Only 2.38 million standalones are expected to be sold this year. Already this year 11 milion DVD players have been sold this year. Oh, I forgot, Sony goes by $ not units.

S~

S~

 

[Bobby H]

DVD manufacturing is profitable. For Chinese. It is US' problem they can't make a buck manufacturing them... When talking about a loss leader look at the PS3...

There's a profit angle on gaming consoles. The companies price gouge you for the games. Other products do this too -like color laser printers. You get the printer for cheap and then pay out the butt for toner to make up for the difference. DVD players do not offer any such profit angle.

More goes into marketing and selling a consumer electronics product than merely having it made in China on the cheap. DVD players are a throw away item anymore. They're not worth the time a sales person would have to waste explaining how one works to a customer. There's no opportunity to sell a maintenance agreement with a product costing under $50. If someone wants a $39 DVD player, he shouldn't expect anything in terms of customer service buying such a cheapie item. He just needs to put that box in his Wal-Mart grocery cart, buy it, take it home and figure it out there. DVD players are an unprofitable waste of retail store shelf space. Really, the stupid things should only be sold online -like most music CD players that don't play DVDs. DVD players will get to that point, shortly before they disappear completely.

Insult is quoting a Blu shill Dan Ramer as an authority and expecting anybody to buy that crap... Except for the bluboys, of course...

If you're going to call Ramer a "Blu Shill" it makes you sound like an angry, disgruntled HD-DVD player owner.

WTF? Where did I say that? I worship HD.

You did that in effect by saying the only reason why electronic companies developed HD movie disc players was to thwart piracy. The only reason why electronics companies are developing Blu-ray players, HD-quality DVRs, HD-quality satellite receivers, etc. is because there is a market for it. Customers want HD and are willing to pay for it. Saying it was all only to thwart piracy is just flat out silly.

Overall, people are happy with DVD according to NPD research and that is BD's biggest hurdle to overcome.

I'd like to see NPD do a survey of people who own HDTV sets and receive some form of HD programming via cable, satellite or over the air. NPD's numbers very likely do not reflect that at all. They're probably talking to a lot of people who have no HD programming coming into their homes who don't know what they're missing when it comes to HD.

Sure. But what percentage of customers are HD customers. SD outside of the locals will not be going away. Look how many shows aren't even HD. They may be digital, but it's not HD.

That's all changing. More and more TV stations as well as a growing number of TV programs are switching over to HD. Pressure to do so is already high and will get very intense in 2009. Lack of HD is going to translate to lower Nielsen ratings.

On a good week, BD sales on average are still running at 10% of DVD sales.

And that figure is nearly double what it was at the end of March -just seven months ago.

The best that will ever happen is that in 18-24 months, sales of BD players and movies will surpass DVD sales.

I'm not talking about software sales. There's no doubt DVD software will still be selling pretty well 2 years from now. What I am talking about is new player hardware sold in stores and what stores will be selling 18-24 months from now.

Just about every home in the U.S. already has at least one or more DVD players. Not many people need to buy another DVD player unless one they own has broken.

Electronics stores have more incentive to sell Blu-ray players because they are more profitable. There is a better chance someone buying a Blu-ray player will buy other things to go with it -whether it's HDMI cables, extended warranty plans or even a new TV. You're not going to get that opportunity selling a $50 DVD player. And if an electronics store has nothing but Blu-ray players to play optical movie discs, they can truthfully tell the customer that Blu-ray player will play their old DVDs and even work on an old TV if it has to do so.

20% share, as claimed, is unrealistic as only 700,00 standalone BD players were sold last year and there is no way of knowing how many PS3's are used for BD playback. Only 2.38 million standalones are expected to be sold this year. Already this year 11 milion DVD players have been sold this year.

Consider the source and the motives of any "news organization" publishing numbers about Blu-ray. Lots of those guys, the latest ones being ZD Net, have their own "we want movie downloads to succeed" axe to grind.

The notion that very few Playstation 3 consoles are used for Blu-ray playback is laughably ridiculous. During the Blu-ray vs. HD-DVD format war, the Playstation 3 was the primary device keeping Blu-ray afloat. Standalone BD player sales were abysmal until Spring of this year. Despite that, movie sales for Blu-ray were consistently 200% to 300% greater than HD-DVD disc sales. That would not have happened without the PS3. Playstation 3 was not only the most affordable Blu-ray player on the market -for a long time it was the best. Many people still consider it to be the best choice of Blu-ray players on the market. I still recommend it to people looking at Blu-ray.

 

[diogen]

Geeez... Deja-vu all over again...

The last thing I want to do is start arguing with Joe v.2.0.

Bobby, I wish you every success in your quest for hidef heaven...

One advice (not that you asked for it or ever will): before hitting the keyboard - read. If you don't get it - ask.

Take care.
Diogen.

 

[teachsac]

Geeez... Deja-vu all over again...

The last thing I want to do is start arguing with Joe v.2.0.

Bobby, I wish you every success in your quest for hidef heaven...

One advice (not that you asked for it or ever will): before hitting the keyboard - read. If you don't get it - ask.

Take care.
Diogen.

Agreed. I'm done. Yeah NPD, Home MEdia Research Group, WSJ have a vested interest in HD downloads Never mind the fact this is what I do for a living, Yeah DVD player sales in NA alone are going to go from 33 million to 0 in 2 years or less. Wait.... what are these 11 million players that were sold the first two quarters of '08. Software will continue to be made but players won't

S~

 

[dlsnyder]

As for the wild card of HD digital downloads, some bad news may step in the way of that:
AT&T to try limits on monthly Internet traffic - Yahoo! News
AT&T, one of the largest Internet service providers in the nation, will being to use caps on Internet bandwidth. Customers who use the standard 768kb/s DSL service will be limited to 20GB per month. DSL Pro users will be limited to 60GB per month. DSL Elite users will have a 150GB limit. Most AT&T DSL customers have the basic service -and that would only allow a handful of AppleTV 720p movie downloads (if each movie is only 4GB in size). Customers will pay $1 per GB for going over the limit.

Rivals like Comcast have higher limits on their caps, but will simply cancel a customer's Internet account if they repeatedly go over their bandwidth limit.

This is going to have a chilling effect on a lot of high bandwidth download traffic.

The exception here would be if the broadband providers also became content providers, or partnered with content providers. Comcast, AT&T, or any other provider is not going to cap your usage if you are paying for content THEY are selling you. I expect them to start their own download services, or at least bundle one in from a major player, in order to cash in on the coming boom.

 

[dlsnyder]

As far as whether or not standalone DVD players will continue to be produced, I think back to the late 80's when the first affordable standalone CD players were available. In the 90's when affordable DVD players came out that could also play CDs, standalone CD players all but disappeared. Consumers love conveniance. Combo DVD/VHS players are another example. Why have two units to play video formats when you can have one? The same will eventually happen with Blu-ray over the next 5-10 years. As upconverting DVD players need to be replaced, consumers will replace them with Blu-ray players, especially if they have other features they are looking for like CD and Divx playback. The Samsung player that also plays Netflix downloads seems a little out there to me, but it may find its place with consumers.

The real problem as I see it is the price of Blu-ray movies vs. DVDs, and the marginal improvement in image quality in the eyes of most consumers. If an upconverted DVD on a Blu-ray player looks almost as good as a Blu-ray for less money, why bother? For me the difference is obvious, but my wife could care less. She still prefers to buy full-screen DVDs and stretch them out on our widescreen set so she doesn't see the black bars on a widescreen version. I tried to show her how to zoom in to hide the widescreen bars on the top and bottom, but she says she doesn't want to have to "fiddle with" the controls.

 

[meStevo]

The exception here would be if the broadband providers also became content providers, or partnered with content providers. Comcast, AT&T, or any other provider is not going to cap your usage if you are paying for content THEY are selling you. I expect them to start their own download services, or at least bundle one in from a major player, in order to cash in on the coming boom.

Heh, that's a good idea, and has been done... see also: Cell phone companies. Calling/texting our network? No problem! Calling/texting another network? Ka-Ching!

 

[Poke]

Yeah I notice that the Blu-Ray titles are about the same as DVD on prices but overall I think we will see more folks make the jump now. It just makes sense now when folks buy a TV it will be HDTV and they will at some point want to watch HD Movies which means getting on Blu-Ray...