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Update Blu-Ray prices key to uptake - 24-September-2008, 13:50

Blu-Ray prices key to uptake

If theres been one consistent grumble from would-be Blu-ray disc adopters it has been the price of stand-alone players.

In fact the seemingly high price of Blu-ray has been exploited by Toshibas rival DVD technology and the by comparison really low price of DVD upconverters, which some argue delivers an image to the screen thats pretty close to Blu-ray, and without the need to invest in a library of new discs.

Indeed, most commentators reckon that something dramatic needs to be done to boost Blu-ray sales of both hardware and software and cutting back on the retail price seems to be an easy step. Proof of this is the increase in DVD sales (up 0.15% to $111.28m in the US for week ending Sept 14th) and the significant drop of 13.39% in Blu-ray disc sales from the previous week to a quite miserable $9.18m. Taken as a percentage of Top 20 units sold, the split becomes 92% in favour of DVD units sold and eight per cent for Blu-ray. Taking individual titles freshly released helps the Blu-ray argument a little (for example, The Forbidden Kingdom released just a few weeks ago managed an 11% share of the market).

A week ago the Blu-ray Disc Assoc issued a statement alerting potential buyers not to expect any significant price reductions soon. "There's not enough market [volume] to lower the price. Prices will go down but, what people overlook is that you need a marketplace first before you start cutting prices," according to BDA chairman, Andy Parsons, which must have gone down like a lead balloon for would-be adopters.

Research company DisplaySearch says the world will buy 2.38m dedicated Blu-ray players this year (excluding PS3 consoles) and 5.2m units in 2009. However, another research company (InSTAT) suggests sales will hit 5m this year with solid growth continuing if prices decline they say. InSTAT admits that demand in North America, Europe, Japan and China for DVD players has declined over the past year.

But now there are the first green shoots of progress on the price front. There are plenty of Blu-ray players already available in the US market at sub-$300, which seems pretty good value from the European side of the water. Indeed, there seems likely to be no shortage of players in the $225-$249 price range this side of the holiday season with Sonys BDP-S300 model (which also upscales existing DVDs) at Circuit City for a bargain $249.99 (albeit with a money off coupon) and Best Buy discounting an Insignia model at $229.99. You do not have to be a genius to suggest that a sub-$200 unit will emerge soon, although this would still be double the price of most half-decent DVD upscaling units.

But, do not expect a quick ramp up of Blu-ray player sales to standard DVD player levels any time soon, warns InSTAT, As prices for Blu-ray players are still high...Meanwhile, the DVD hardware market will decline in 2008, as DVD players have reached saturation in some markets and DVD recorders never caught consumers' attention the way DVD players did.
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