Quote:
Originally Posted by ack_bak
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.
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I didn't say no profits on hardware, I said low profits and that is a fact. It may be many manufacturers are making no profits by the time any given model has been closed out and they move on to the next generation. The margins on consumer electronics are very tiny, Blu-ray is now as low as the rest, and that is the reason the retailers are going out of business so frequently and many major manufacturers have reported huge losses. The prices on software are great considering the level of sales and the real issue is that DVD is sold at such low prices that consumers are reluctant to purchase anything in home consumer electronics at a price that provides any level of profit, the prices have been so low and consumers expect that. Competition is great, I am just a consumer so I benefit as well, but the business is in grave condition without some way for the companies involved to make a profit. Best Buy survives but just barely, the profits need to be up this holiday season or I would expect the company's stock price to take a big hit and who knows if it avoids falling to the level that Circuit City has fallen to. There is no competition for Best Buy now at a national level, although local competition and competition from Wal-Mart will keep them honest.
I wouldn't expect Blu-ray software prices to be lower until there are many more players in consumer's hands. Maybe 40,000,000 players in consumer's hands worldwide and some releases can justify more aggressive pricing. The price has to be set at a level that maximizes profits and the ridiculous $35 is too high and $15 too low. I am seeing average prices for single disc releases as follows now, recent releases selling at $25 and catalog titles selling at $15, I think that is the level to expect for the time being. Next year things should be better.
The silly digital copy or DVD included without additional cost to the consumer needs to end, all that does is increase the cost and doesn't appeal to a majority of consumers but in any event results in a higher price. I find it really odd that many of the same people complaining about Blu-ray prices are asking for additional discs at no extra cost. How can that make sense? Sell the best quality at the most profitable price is the only strategy that can work. Too high and other companies will sell their product lower. Too low and other companies will not bother to compete, just stick with DVD.
I know so many here will just say lower prices and that will fix the issue. So many here have been so wrong about so much, you think they might try to better understand what is going on. Hopefully, Panasonic, Samsung, Sharp, Sony, Funai and the rest of the companies involved will disclose financial performance for their Blu-ray products. If more than one is showing a net profit so far, I would be amazed. I expect the actual number is zero. Toshiba announced their losses associated with HD DVD a few months ago and the number was staggering. I just saw the new Insignia Profile 2.0 player at Best Buy, it doesn't look like a Funai made player to me and I am trying to find out if it is. I haven't seen any Funai Profile 2.0 players at Wal-Mart or listed on Amazon yet which also makes me believe the Insignia Profile 2.0 player is not from Funai, maybe Samsung?
Chris