Sony says Blu-ray sales short of forecasts

Lee Stewart · 11-21-2008, 12:58 PM

Quote:

Originally Posted by PFC5

I was saying 2 months ago here that the economy was going to be worse than many thought, and that this time around, the entertainment industry was going to feel it a lot also.

I think besides the economy, the biggest 2 stumbling blocks to widespread BD adoption are squarely on the studios shoulders. They are the slow BD release pace, and the prices of BD movies. We already know they have huge margins on BD titles that nearly any other industry envies, so they just have to give some of it up to get their future revenue stream.

My fear is that they may not be willing to do that, and if this aspect doesn't improve people will not buy either SD DVD or BD as much and the studios may kill BD to rescue SD DVD sales by removing the fence sitters waiting for the BD movie prices to drop.

The biggest stumbling block - IMO - is consumer apathy.

Many just don't care about seeing HD - and paying extra for it.

The content is the same - same movie - same plot - same actors, etc - only real difference is the pixel count.

**PFC5** · 11-21-2008, 01:07 PM

Apathy is certainly an issue, but with the advertising in stores, etc, people are seeing that there are other things to like besides just pixel count. Interactive menus which I love and interactive extras.

Right now I think more people are on the fence because they think BD is going to replace SD DVD, so they are not buying SD DVDs as much while waiting for BD movie prices to drop to a more reasonable level. If the studios do not drop BD prices, then BD has some troubles, and the studios have BIG troubles over the next few years beyond just not getting the financing they need to make as many movies, and declining profits.

Lee Stewart · 11-21-2008, 01:26 PM

Quote:

Originally Posted by PFC5

Apathy is certainly an issue, but with the advertising in stores, etc, people are seeing that there are other things to like besides just pixel count. Interactive menus which I love and interactive extras.

Right now I think more people are on the fence because they think BD is going to replace SD DVD, so they are not buying SD DVDs as much while waiting for BD movie prices to drop to a more reasonable level. If the studios do not drop BD prices, then BD has some troubles, and the studios have BIG troubles over the next few years beyond just not getting the financing they need to make as many movies, and declining profits.

Questions to ponder . . .

1. Who is buying these low priced BD players? Are they brand new BD consumers? Or are they existing BD consumers who want that bedroom player? It does make a difference in BD software sales.

2. Most people here at HDF and at other forums look at PIP and BD Live as a gimmick and don't seem too interested in it based on polls. So the EA's don't care but J6P will?

3. Have we been told how rentals are doing?

4. It's the economy . . . . BIG reason for decline in sales - of everything. Can this be overcome?

**PFC5** · 11-21-2008, 01:49 PM

Quote:

Originally Posted by Lee Stewart

Questions to ponder . . .

1. Who is buying these low priced BD players? Are they brand new BD consumers? Or are they existing BD consumers who want that bedroom player? It does make a difference in BD software sales.

Good point. We could be seeing the same thing that happened with that $99.00 HD DVD player sale for BD this year. I think without the war, we are seeing more first time buyers, but what percentage i haven't a clue.

Quote:

2. Most people here at HDF and at other forums look at PIP and BD Live as a gimmick and don't seem too interested in it based on polls. So the EA's don't care but J6P will?

But I think J6P care more about extras IMO, but the J6Ps are likely just going by the marketing hype right now, which CAN be persuasive.

Quote:

3. Have we been told how rentals are doing?

No, but i suspect that rental revenue is up more than purchases of BD movies because of the high cost of BD movies right now.

Quote:

4. It's the economy . . . . BIG reason for decline in sales - of everything. Can this be overcome?

I was waiting the "stupid" being added as it would be appropriate IMO. Remember when Clinton ran for pres the first term?

I think better sales on HD stuff will come in the final week before Christmas myself and told my wife to avoid buying things (except already out of stock stuff like the Zero gravity car), until later in the season because I think this will happen.

Chris Gerhard · 11-22-2008, 06:40 AM

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.

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

Chris Gerhard · 11-22-2008, 07:13 AM

I think I found my answer on the new Insignia Profile 2.0 player, it is made by Desay, a chinese manufacturer. I am not aware of any Funai made Profile 2.0 players, not a good sign with Christmas here.

Chris

11-21-2008, 01:07 PM	#17
PFC5 Super Moderator Join Date: May 2005 Posts: 28,053	Apathy is certainly an issue, but with the advertising in stores, etc, people are seeing that there are other things to like besides just pixel count. Interactive menus which I love and interactive extras. Right now I think more people are on the fence because they think BD is going to replace SD DVD, so they are not buying SD DVDs as much while waiting for BD movie prices to drop to a more reasonable level. If the studios do not drop BD prices, then BD has some troubles, and the studios have BIG troubles over the next few years beyond just not getting the financing they need to make as many movies, and declining profits. __________________ Denon AVR-887 Klipsch RP-5 Pwred Towers (mains) (525 watts peak each 12"Subs) All Klipsch RC-25(ctr),(2)SS1(surr),(2)SS1(rearSurr) Toshiba (2)HD-A20,PS3,BD35 For SACD/DVD-A Samsung HD-841 Panny 50pz80u plasma SETTINGS RCA HD50LPW162 50"DLP w/HD2+ SA 3250HD 47" LCD+Yamaha5790+HD-A1(bedroom) Harmony 680 + (2) 670s (amazing remote/support) Game room with Onkyo receiver & B&W Speakers The_Cable_Game Take the high ground and be happier

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11-22-2008, 07:13 AM	#21
Chris Gerhard High Definition is the definition of life. Join Date: Nov 2005 Posts: 8,160	I think I found my answer on the new Insignia Profile 2.0 player, it is made by Desay, a chinese manufacturer. I am not aware of any Funai made Profile 2.0 players, not a good sign with Christmas here. Chris