oh great, now there's very little incentive for them to lower prices anymore. starting at $399... yeah right. so now that the war is over, it's time to milk the consumers... yeah, no thanks. this is gonna take a while...
I reckon these moronic arguments are made by disgruntled HD DVD owners or people too young to remember how much DVD players cost.
There are a dozen or so blu ray manufacturers and hundreds of retailers competing for the money in your wallet. And there are more manufacturers and player models entering the market all the time. So explain please why prices won't fall? Did DVD player prices fall or rise because there was a single disk format?
The only reason Toshiba made its players seem "cheap" was because they were taking a massive financial hit on each one to win a format war. Comprende?
To compare pricing to DVD's release, I looked at a few big box stores on archive.com that had ecommerce websites or at least listed their products and pricing back in late 90's. DVD players started shipping in March 1997. Almost two years later in november/december during the christmas shopping season of 1998, DVD players started retailed at $249 - $799 depending on model. I used Christmas 1998 as a pricing target because it allows a release timeframe of rougly 20 months, which is the same span of time from the release of Blu-ray players in June of 2006 to now, February 2008.
After collecting the DVD pricing, I used a website that would convert those 1998 dollars into 2008 dollars adjusted for inflation and came out with: $249 in 1998 = $320.55 in 2007
note: You probably noticed that DVD's 20-month release range ends during the Holiday season, and are thinking that prices would have been lower than normal. To make the comparison a fair one, I looked up prices right before the holiday season, and they appeared to be roughly the same.
I then checked Amazon.com to see current pricing on cheaper Blu-ray players: Sharp Aquos BDHP20U = $348.00 Samsung BD-P1400 = $356 Sony BDP-S300 = $376 Sony PlayStation 3 = $399.95
Overall, I am surprised that Blu-ray pricing seems to be tracking quite well with DVD's release. I didn't know what to expect, I just assumed that since the introduction of the HD formats has been so much different from new format releases in the past that the retail pricing over time data might be wildly different. Although the prices are not as drastically low as HD-DVD, it's helpful to remember that HD-DVD players were being heavily subsidized by Toshiba as part of their efforts to win the format war, and that 3rd party consumer elecronics manufacturers are unable to match those retail price points in the near term. That said, Blu-ray hardware does use more expensive system components, although in my opinion the resulting increases in technical specifications more than make up for the difference.
I believe the format war had two primary effects on pricing. Number one, it drove down prices due to competition between the two formats. But, conversely, it also limited consumer adoption even among early adopters. Therefore, it had an effect of maintaining higher prices because of the lack of economies of scale that could have been seen with a one-format marketplace. I believe that now that the format war is finally over, the expected increase in consumer adoption of Blu-ray will act as a catalyst for major competition between the plethora of manufacturers that have already jumped in to the game. I would speculate that by the holiday season this year (08), we will see Blu-ray profile 2.0 players at Walmart for $220-$250.
Seriously though, Blu-ray vs. DVD is a pretty poor analogy to DVD vs. VHS for several reasons.
The first of these is that Blu-ray has more of an uphill battle. The technology of DVD was a big step up over VHS no matter what kind of TV you owned. Chapters, no more rewinding, menus, extra features on the disc, etc. Blu-ray is essentially just a bigger DVD, and its only real advantage can only be realized by a) the less than 50% of people that have an HDTV, and b) people that actually care about picture and audio quality. Blu-ray has a much smaller target audience than DVD did right now, so they need to sell this stuff to just about everyone that can use the technology, whereas DVD could get away with only selling to a quarter of their target audience for a while.
Secondly, Sony has said that they did not intend to "repeat the mistakes of DVD in dropping player prices too fast". The fact that Blu-ray player prices are relatively on par with where DVD player prices were at this point is TERRIBLE, because Blu-ray slashed prices due to the format war. Blu-ray had TONS of EXTRA incentive to slash prices, and they still are barely keeping up with where DVD (who had far less competition) was. Imagine if HD DVD never existed, we'd probably still be looking at a $800 entry cost for Blu-ray.
It took an extra level of competition that DVD never had to deal with just to keep Blu-ray prices close to on par with where DVD prices were at the same time. With that extra level of competition now gone, why in the hell do people expect Blu-ray prices to keep dropping at the same rate they did before (which even then was slightly slower than the competitionless DVD)? Already since the Warner announcement we've seen price cuts and bargain priced software come to a complete halt.
People keep saying Blu-ray players will drop in price *WHEN* they are mass produced. But the true statement should be that they will drop in price *IF* they are mass produced. Warner chose a side because they felt the window of HDM adoption was running thin. Blu-ray needs to realize the same and entice people to jump on board before its too late, rather than just assuming that everyone will jump on board eventually like they did for DVD. Because as much as I love HD content and would pay almost any amount for it, to the average consumer Blu-ray has a lot less going for it now than DVD did when it came around.
Reader Comments (Page 1 of 1)
dynamius @ Feb 21st 2008 12:55AM
oh great, now there's very little incentive for them to lower prices anymore. starting at $399... yeah right. so now that the war is over, it's time to milk the consumers... yeah, no thanks. this is gonna take a while...
DrXym @ Feb 21st 2008 4:29AM
I reckon these moronic arguments are made by disgruntled HD DVD owners or people too young to remember how much DVD players cost.
There are a dozen or so blu ray manufacturers and hundreds of retailers competing for the money in your wallet. And there are more manufacturers and player models entering the market all the time. So explain please why prices won't fall? Did DVD player prices fall or rise because there was a single disk format?
The only reason Toshiba made its players seem "cheap" was because they were taking a massive financial hit on each one to win a format war. Comprende?
Sam Winter @ Feb 21st 2008 4:45AM
To compare pricing to DVD's release, I looked at a few big box stores on archive.com that had ecommerce websites or at least listed their products and pricing back in late 90's. DVD players started shipping in March 1997. Almost two years later in november/december during the christmas shopping season of 1998, DVD players started retailed at $249 - $799 depending on model. I used Christmas 1998 as a pricing target because it allows a release timeframe of rougly 20 months, which is the same span of time from the release of Blu-ray players in June of 2006 to now, February 2008.
After collecting the DVD pricing, I used a website that would convert those 1998 dollars into 2008 dollars adjusted for inflation and came out with:
$249 in 1998 = $320.55 in 2007
note: You probably noticed that DVD's 20-month release range ends during the Holiday season, and are thinking that prices would have been lower than normal. To make the comparison a fair one, I looked up prices right before the holiday season, and they appeared to be roughly the same.
I then checked Amazon.com to see current pricing on cheaper Blu-ray players:
Sharp Aquos BDHP20U = $348.00
Samsung BD-P1400 = $356
Sony BDP-S300 = $376
Sony PlayStation 3 = $399.95
Overall, I am surprised that Blu-ray pricing seems to be tracking quite well with DVD's release. I didn't know what to expect, I just
assumed that since the introduction of the HD formats has been so much different from new format releases in the past that the retail pricing over time data might be wildly different. Although the prices are not as drastically low as HD-DVD, it's helpful to remember that HD-DVD players were being heavily subsidized by Toshiba as part of their efforts to win the format war, and that 3rd party consumer elecronics manufacturers are unable to match those retail price points in the near term. That said, Blu-ray hardware does use more expensive system components, although in my opinion the resulting increases in technical specifications more than make up for the difference.
I believe the format war had two primary effects on pricing. Number one, it drove down prices due to competition between the two formats. But, conversely, it also limited consumer adoption even among early adopters. Therefore, it had an effect of maintaining higher prices because of the lack of economies of scale that could have been seen with a one-format marketplace. I believe that now that the format war is finally over, the expected increase in consumer adoption of Blu-ray will act as a catalyst for major competition between the plethora of manufacturers that have already jumped in to the game. I would speculate that by the holiday season this year (08), we will see Blu-ray profile 2.0 players at Walmart for $220-$250.
Ryan @ Feb 21st 2008 12:21PM
Seriously though, Blu-ray vs. DVD is a pretty poor analogy to DVD vs. VHS for several reasons.
The first of these is that Blu-ray has more of an uphill battle. The technology of DVD was a big step up over VHS no matter what kind of TV you owned. Chapters, no more rewinding, menus, extra features on the disc, etc. Blu-ray is essentially just a bigger DVD, and its only real advantage can only be realized by a) the less than 50% of people that have an HDTV, and b) people that actually care about picture and audio quality. Blu-ray has a much smaller target audience than DVD did right now, so they need to sell this stuff to just about everyone that can use the technology, whereas DVD could get away with only selling to a quarter of their target audience for a while.
Secondly, Sony has said that they did not intend to "repeat the mistakes of DVD in dropping player prices too fast". The fact that Blu-ray player prices are relatively on par with where DVD player prices were at this point is TERRIBLE, because Blu-ray slashed prices due to the format war. Blu-ray had TONS of EXTRA incentive to slash prices, and they still are barely keeping up with where DVD (who had far less competition) was. Imagine if HD DVD never existed, we'd probably still be looking at a $800 entry cost for Blu-ray.
It took an extra level of competition that DVD never had to deal with just to keep Blu-ray prices close to on par with where DVD prices were at the same time. With that extra level of competition now gone, why in the hell do people expect Blu-ray prices to keep dropping at the same rate they did before (which even then was slightly slower than the competitionless DVD)? Already since the Warner announcement we've seen price cuts and bargain priced software come to a complete halt.
People keep saying Blu-ray players will drop in price *WHEN* they are mass produced. But the true statement should be that they will drop in price *IF* they are mass produced. Warner chose a side because they felt the window of HDM adoption was running thin. Blu-ray needs to realize the same and entice people to jump on board before its too late, rather than just assuming that everyone will jump on board eventually like they did for DVD. Because as much as I love HD content and would pay almost any amount for it, to the average consumer Blu-ray has a lot less going for it now than DVD did when it came around.