Blu-ray now a Samsung loss leader, but is Sony set to benefit?

Blu-ray now a Samsung loss leader, but is Sony set to benefit?
By Patrick Avenell

Samsung has today reinforced the notion that Blu-ray players are a loss leader, rather than a viable product offering, by launching a promotion to give the struggling media device away with purchases of LCDs and plasmas.

In a promotion running until Christmas Eve, customers who purchase a Samsung series 5, 6 or 7 plasma, or a series 6, 7, 8 or 9 LCD, will receive the BD-P1500 Blu-ray player, which is RRP $499. This may prove a boon for retailers, who will be looking to maintain panel sales up to Christmas now that the Olympics rush is a distant memory.

In the lead up to these Olympics, Sony experienced great success with its Bravia/PS3 campaign, which saw the company flood the market with 35,000 free game consoles. It wasn’t so much the game console they were giving away, but the Blu-ray technology. The conclusion drawn from these campaigns is that neither Sony nor Samsung consider the Blu-ray player, as a standalone product, to be a financially viable offering.

Later at Uchi, Sony communications manager Paul Colley spoke of how Sony was looking to invigorate the slow take up of Blu-ray by introducing low price Blu-ray players, backed by a television marketing campaign. This campaign isn’t about making money selling the players, but by selling the discs that include the content.

A new release Blu-ray disc retails for around $50, almost twice that of a DVD. Sony’s film production and distribution arms have been the most proactive in releasing movies on Blu-ray, and its overall investment in the technology – an investment that largely contributed to the winning of the format war – needs to be recouped.

What makes this move from Samsung so interesting, however, is that its ability to recoup losses in the future is not as clear cut as Sony’s. This promotion is sure to sell a lot of Samsung panels, and that’s good news for the supplier and the retailer, it could well lead to Sony selling a lot more movies on Blu-ray.

[Fri 24/10/2008 10:20:36]

http://www.current.com.au/2008/10/24/article/RFZBVQDDSM.html

I'm not sure anything in this article can be believed if he can't get easy facts sorted out.

A new release Blu-ray disc retails for around $50

Really, I'm not sure there are any new releases on BD other than some special releases with books or other gimmicks that MSRP for $50. Certainly isn't close the average MSRP, never mind street price.

will receive the BD-P1500 Blu-ray player, which is RRP $499

I've never seen an MSRP of $499 for that player and it can currently be had everywhere for $299 and as low as $215.

Hatt:

I believe that info is coming from Australia where those ARE the prices as quoted.

That .au leads me to believe that, along with the prices themselves.

And gas can be considered a loss leader for convenience stores. The films shown in a cinema can be considered a loss leader for movie theaters. Free phones are loss leaders for wireless phone service providers.

Loss leader – something to get your customers in the door so they'll buy something you'll make a profit on.

As someone who works in advertising, I think this is a smart move on behalf of Samsung. It also has the double impact of increasing customer awareness and education also.

And gas can be considered a loss leader for convenience stores. The films shown in a cinema can be considered a loss leader for movie theaters. Free phones are loss leaders for wireless phone service providers.

Loss leader – something to get your customers in the door so they'll buy something you'll make a profit on.

As someone who works in advertising, I think this is a smart move on behalf of Samsung. It also has the double impact of increasing customer awareness and education also.
As long as they can make money by doing it! :what: