Blu-ray Price Drops May Clear Way for Adoption

Sep 18, 2008  •  Post A Comment

While Blu-ray disc players promise the ultimate in picture clarity for movie-disc buyers with high-definition televisions, the prognosis is murkier for how fast the next-generation players will be adopted in the U.S.
Global sales of stand-alone Blu-ray players will triple to 2.38 million units this year and double to 5.31 million in 2009. The format will supplant Sony’s PlayStation 3 videogame console as the most popular type of Blu-ray hardware within two years, NPD Group unit DisplaySearch said at a Los Angeles conference this week.
U.S. customers will accelerate Blu-ray player sales as the price falls from its $375 level now toward the $260 mark, which many customers are comfortable paying to replace their standard-definition machines, said NPD Senior Industry Analyst Russ Crupnick at the conference.
Analysts and studios have predicted that Blu-ray disc rentals and sales will vault to about $1 billion this year from about $200 million in 2007, when Blu-ray’s format war with Toshiba’s HD DVD was still in full swing. However, Netflix, the largest U.S. movie rental service via mail, is downplaying the possible effect of Blu-ray on sales and subscriber growth.
Netflix Chief Financial Officer Barry McCarthy, at a San Francisco conference this week, called consumer adoption of Blu-ray “slow” because of the higher price and reiterated the company’s July estimate that Blu-ray customers accounted for less than 10% of its 8.4 million subscriber base.
Indeed, a recent NPD survey of about 1,500 people revealed that just 5% of U.S. customers were planning to buy either a stand-alone Blu-ray player or PlayStation3 while more than a third were either waiting for prices to fall further or were satisfied with their standard-definition players. About 40% of those polled said they didn’t own an HDTV, Ross Rubin, NPD director of industry analysis, said at the conference.
“As far as the price situation for the major brands, we’re starting to see some improvement,” said Mr. Crupnick, who added that some New York-area retailers are selling Blu-ray players for as low as $249 and discs for $14.99. “But Blu-ray continues to be a premium product.”

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