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Originally Posted by Chris Gerhard
The prices for Blu-ray players are much lower than projected so profits per player are next to nothing, that is a much bigger issue than the 10% shortfall in players sold from their perspective. Of course Sony has led the way with low player prices but if I was a stockholder, I sure would have preferred prices that helped recoup some of the massive investment. With astounding losses on the PS3, Blu-ray and the XBox 360, I wonder if we have seen the last products of this type developed. These products are a large advancement compared to DVD, the Playstation 2 and XBox but without any profitable market. The products have many years of life left to recoup the losses but I don't think any of them ever come close. The Sony PR department will try to put a good face on it all but the accountants know the carnage associated with Blu-ray and the PS3.
Chris
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You have no proof that there is no profit being made on cheaper BD players. In fact recent Funai statements seem to suggest the opposite. Blu-Ray hardware has been out over 2 years now and there is no doubt that the PS3 has helped in terms of economies of scale. We simply do not know what the hardware costs and what profit margins are. The fact that there are more manufacturers and models than ever before seems to indicate that the CE's must be making money or they would stop making players.
The studios and CE's have forecasted high expectations for Blu-Ray. Sure they could have kept the prices sky high and hoped for 10% marketshare, but they have been clear that they want Blu-Ray to be much bigger than that. Price is going to be a huge barrier for most people and the only possible way for Blu-Ray to overtake DVD is if it is priced very close to DVD.
Then you have to factor in the economy. DVD sales are dropping. Redbox's are popping up everywhere. The studios and CE's have to be realistic. The days of people liberally getting multiple credit cards and racking up high debts on them are most likely over. We are already seeing the effects of the credit crunch on spending. People are being more careful with their money than ever before and if the BDA is serious about Blu-Ray market penetration they will have to get serious about the price. A Lionsgate analyst stated that Lionsgate is clearing $18-21+ per Blu-Ray release (catalog and new release). Clearing. And Lionsgate is one of the lower cost studios in terms of BD pricing. Time to wake up. I know I am not going to drop $20+ on a catalog title unless it is an absolute must have. And there are few of those. Catalog titles should be street priced at $15 and new releases should be $20 ($23-25 for a special edition). Budget catalog titles should be priced around $9 (street price). Remember I can get that same title on DVD right now for $3-9 on any given sale (in a B&M store mind you).
This is the reality if the BDA is serious about Blu-Ray.