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Price, Functionality Will Restrain Blu-ray Sales

May 1, 2008  •  Post A Comment

Although many are celebrating the emergence of Sony’s Blu-ray as the winner in the next-generation DVD player format war, count ABI Research among the naysayers.
Within the past two weeks, the Oyster Bay, N.Y.-based research firm has twice questioned whether Blu-ray sales will match the optimistic projections of analysts and movie studio executives, who have said next-generation disc revenue in the U.S. will triple to about $1 billion this year.
This week, ABI said Blu-ray’s high prices—promotions dropped some player prices to about $300 during the last holiday season before prices rose slightly after Toshiba discontinued its HD DVD format—will prevent significant adoption of Blu-ray for another 12 to 18 months. Last week, the firm said consumer ambivalence and the willingness for customers to “upconvert” standard players will stem the flow of dollars toward Blu-ray players and discs.
“I don’t think the top brand names are going to reach the magic $199 point for this holiday season,” said Steven Wilson, principal analyst at ABI Research. With so few companies making integrated circuits for Blu-ray players and a general supply shortage of the machines,
“There’s nothing driving their prices down.”
First-quarter Blu-ray disc sales more than tripled as Toshiba pulled out of the format war while retailers such as Best Buy and Netflix shifted support exclusively to Blu-ray, Home Media Magazine reported last month, citing Nielsen VideoScan figures.
Still, some of last year’s customer confusion from having two next-generation formats to choose from will continue, because many of the Blu-ray machines sold now don’t have the necessary functions to play all of the content accessories movie studios will be including on Blu-ray discs.
“What is driving demand for high-def DVD? It’s the desire to see high-quality video on your HDTV,” Mr. Wilson said. “But how many consumers are willing to pay current prices to buy players that will be obsolete in a year?”

26 Comments

  1. Like all the other computer developments of the last 25 years, let’s not be impatient; the prices WILL come down. Just don’t feel you have to be the first one to have BLU Ray.
    I notice that the internal computer drives that will record are around $300 now. Just wait a few months, OK?

  2. Just wondering what “features” are NOT included in Blu-Ray sets now that will be added in the near future? And how many movie lovers will ever use those “features”??

  3. I was about to the point of springing for a HD DVD player. The price point was getting down to 149.00 with the HD format. Blueray may have won the battle but with their high prices and no competition I think we the consumers are the losers. It will be a while for me Sony!

  4. “But how many consumers are willing to pay current prices to buy players that will be obsolete in a year?”

    Blu-ray players are updatable with firmware updates, and conform (mostly) to HDMI 1.3 standards, therefore the player you buy today (if you can get one) will NOT be outdated in a year, although the future players will most likely have faster boot times. 🙂

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