Sony says Blu-ray sales short of forecasts

Bravestime · 11-20-2008, 10:36 PM

Quote:

NEW YORK (Reuters) - High definition Blu-ray disc players may be one of the holiday season's best sellers, but they will still fall short of expectations, due to the tough economy, the head of Sony's U.S. electronics unit said.

Sales of the next-generation movies players, developed by Sony and sold under brands including Panasonic and Samsung, could benefit from a late shopping spurt as budget conscious U.S. consumers find deals, Stan Glasgow told Reuters in an interview on Thursday.

But they will not meet the worldwide target of 5 million units, most of which had been expected to sell in the United States.

"It's not that far off of it," he said. "Maybe 10 percent off of what we had thought. It's truly one of the items that has performed well during this economic mess."

After the U.S. Thanksgiving holiday on November 27, electronics retailers are expected to slash prices of Blu-ray players -- which originally sold for as high as $1,500 in 2006, -- to as low as $150 per unit, experts said.

Sales of Blu-ray players, which promise higher quality video and audio to viewers with HD televisions, have been hampered by retail prices on movie discs, which can top $30 a piece.

Glasgow suggested that discounted prices for movies could jump-start player sales.

"They (movie studios) need to make money, and the packaged media (discs) is a critical way for them to make money so I understand their problems also," he said. "But I'd love to see those prices come down, as well as the price of Blu-ray players, to drive adoption."

While the new disc standard has enjoyed near exclusivity on electronics retailers shelves this year, after Toshiba Corp pulled the plug on its HD-DVD format earlier this year, Blu-ray still has a long way to go to match sales of standard DVD players. Although the segment is in decline, global DVD player and recorder sales reached 142 million units in 2007, according to research firm In-Stat.

The holiday shopping season is expected to be tough for the entire consumer electronics sector, with shoppers perhaps unwilling to spend after watching the turmoil in the banking, retail and automotive sectors.

Glasgow said earlier on Thursday he doubted that the gadget industry would reach the 3.5 percent growth forecasted by the Consumer Electronics Association for the fourth quarter.

That sluggishness is due in part a slowdown in sales of flat panel, high definition television, such as Sony's Bravia line.

"We expected the TV industry to just skyrocket this holiday season. It's going to grow, but its not skyrocketing," he said. "There are less consumers...willing to spend money. I believe 80 percent of that is just consumer confidence. They don't feel as comfortable making a major investment in a television."

Still, Glasgow thinks that some companies like Sony, established multinational concerns with access to credit, will take advantage of developmental opportunities now that some of their competitors are struggling, in hopes of making more innovative products in the long run.

"Its a good time to reevaluate. I think Sony is in a good position to do that."

Link: http://ca.reuters.com/article/techno...BrandChannel=0

MikeRox · 11-21-2008, 02:32 AM

They expect 4.5 million worldwide sales then. Not as good as expected but still not terrible.

I'd agree about the cost of packaged media if there weren't so many constant 3 for 2 offers and the like, but that makes them quite reasonable. Most people don't want to buy 3 films at once though.

Chris Gerhard · 11-21-2008, 05:06 AM

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

Lee Stewart · 11-21-2008, 06:17 AM

Quote:

"They (movie studios) need to make money, and the packaged media (discs) is a critical way for them to make money so I understand their problems also," he said. "But I'd love to see those prices come down, as well as the price of Blu-ray players, to drive adoption."

Well Stan . . .

YOU are the head of Sony and Sony does own movie studios and Sony releases BD movies . . .

So lower the damn prices yourself!

Chris Gerhard · 11-21-2008, 08:16 AM

Quote:

Originally Posted by Lee Stewart

Well Stan . . .

YOU are the head of Sony and Sony does own movie studios and Sony releases BD movies . . .

So lower the damn prices yourself!

It is a business and the prices are great in my opinion, there has to be profits associated with the sale of Blu-ray discs or the studios will just stick with DVD. Sony will not undercut important partners like Fox, Disney, Warner, and the rest and will only follow with lower software prices once those companies lead. Warner has started with even lower catalog prices but for the most part the others haven't followed yet and after they do, Sony will do the same. Competition and miniscule profits for hardware is one thing, if everybody but Sony and Funai drops out, they can make enough players to saturate the market. If Sony drives software prices down and the major studios say screw it, not enough profits to justify involvement, there is nothing Sony can do to force all of those films to be released on Blu-ray, they don't have any method to get the rights or encourage the studios to do anything.

You sure spend a lot of time whining about prices, just understand this is a business and if you can't afford to play, don't worry about it and you shouldn't have to bother with the non-stop drivel about it. I am delighted with hardware and software prices and quality of both and appreciative these companies have delivered such great quality and value and if others like yourself aren't interested until hardware and software both is sold at little or no profit, that is of course your right. Blu-ray is a great value compared to other discretionary entertainment expenses in my opinion and is second to known for our household.

Chris

Lee Stewart · 11-21-2008, 08:23 AM

Quote:

Originally Posted by Chris Gerhard

It is a business and the prices are great in my opinion, there has to be profits associated with the sale of Blu-ray discs or the studios will just stick with DVD. Sony will not undercut important partners like Fox, Disney, Warner, and the rest and will only follow with lower software prices once those companies lead. Warner has started with even lower catalog prices but for the most part the others haven't followed yet and after they do, Sony will do the same. Competition and miniscule profits for hardware is one thing, if everybody but Sony and Funai drops out, they can make enough players to saturate the market. If Sony drives software prices down and the major studios say screw it, not enough profits to justify involvement, there is nothing Sony can do to force all of those films to be released on Blu-ray, they don't have any method to get the rights or encourage the studios to do anything.

You sure spend a lot of time whining about prices, just understand this is a business and if you can't afford to play, don't worry about it and you shouldn't have to bother with the non-stop drivel about it. I am delighted with hardware and software prices and quality of both and appreciative these companies have delivered such great quality and value and if others like yourself aren't interested until hardware and software both is sold at little or no profit, that is of course your right. Blu-ray is a great value compared to other discretionary entertainment expenses in my opinion and is second to known for our household.

Chris

Chris . . .

What can I say other than . . .

I am shocked at your carefree attitude about the pricing of BD software.

So you either have a lot of disposable income, you don't care about money, or you are so committed to Rah Rah'ng BD, that you place your wants and needs as a consumer second.

Chris Gerhard · 11-21-2008, 08:27 AM

I don't fully understand the relationship between MGM and Sony on the Bond films Blu-ray releases but I just purchased 6 movies on Blu-ray for $65 from Amazon and got 4 tickets to see "Quantum of Solace" at a theater 3 miles from my home. It is a nice theater but I don't go to the movie theater often, the price is too high, but I will go see that film. That is a great value to my way of thinking. I am sort of in awe regarding the value Sony, MGM, Panasonic, Warner and the rest have delivered to consumers with Blu-ray products and I log on here and see non stop complaining about high prices. At least the nonsense about how HD DVD was required to keep Blu-ray hardware prices low has stopped. That one was so silly, I couldn't believe I had to refute that constantly here.

Chris

Chris Gerhard · 11-21-2008, 08:31 AM

Quote:

Originally Posted by Lee Stewart

Chris . . .

What can I say other than . . .

I am shocked at your carefree attitude about the pricing of BD software.

So you either have a lot of disposable income, you don't care about money, or you are so committed to Rah Rah'ng BD, that you place your wants and needs as a consumer second.

Ha, I am shocked at your non-stop whining about the issue and lack of understanding of even the simplest business concepts. At least you have been consistent throughout the discussion of HD media here, you haven't had a clue about any of it and have been so wrong with such a limited understanding of what is going on that is laughable.

You think prices are too high for Blu-ray, what do you think of movie theater prices? Fine dining? Live theater? Country Club membership? I play golf at a local city owned course, I couldn't begin to play at a private club these days.

Chris

Lee Stewart · 11-21-2008, 08:46 AM

Quote:

Originally Posted by Chris Gerhard

Ha, I am shocked at your non-stop whining about the issue and lack of understanding of even the simplest business concepts. At least you have been consistent throughout the discussion of HD media here, you haven't had a clue about any of it and have been so wrong with such a limited understanding of what is going on that is laughable.

Well Chris - I guess there is only one way to shut you up . . .

Can I have a link for that?

Quote:

You think prices are too high for Blu-ray, what do you think of movie theater prices? Fine dining? Live theater? Country Club membership? I play golf at a local city owned course, I couldn't begin to play at a private club these days.

Chris

Nice drivel.

Chris Gerhard · 11-21-2008, 08:59 AM

Quote:

Originally Posted by Lee Stewart

Well Chris - I guess there is only one way to shut you up . . .

Can I have a link for that?

Nice drivel.

Don't need any links, your history of posts here and at AVSForums is all that is needed, anybody can read it. Your record is clear. I stated early this year that Toshiba was losing a lot of money on HD DVD, you asked for a link. I responded with Toshiba will be forced to admit it at some point.

I indicated I thought Blu-ray is a great value compared to other discretionary or entertainment choices and listed several examples that make me believe that. I asked what you thought since you continually whine about Blu-ray prices and of course you had no response to the examples I provided that I believe are not nearly as affordable.

Chris

ack_bak · 11-21-2008, 11:17 AM

Quote:

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

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.

**PFC5** · 11-21-2008, 12:15 PM

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.

Excellent post!

I have no doubt that the profits all these CE companies expected/promised just are not there now and a large part of it is the economy as it is now. They expected a huge holiday season rush that likely isn't going to be there like they thought even at higher prices than we have now on BD players being much lower.

The thing is, that nearly everyone (including BDA industry sources) now is saying that BD movie prices are too high at this point and when LG stated the net profit they are making off of BD titles it shows me that the studios are just being too greedy and do not want to give up those huge margins they have.

The question is will the studios realize this in time and reduce prices as a way of securing a future large revenue stream, or will they be content with a niche market with much lower volume but keeping the high margins they have. At this point i don't know the answer, but I suspect before the holiday season is over we will have some indication.

Louigi222 · 11-21-2008, 12:38 PM

Quote:

Originally Posted by Chris Gerhard

I don't fully understand the relationship between MGM and Sony on the Bond films Blu-ray releases but I just purchased 6 movies on Blu-ray for $65 from Amazon and got 4 tickets to see "Quantum of Solace" at a theater 3 miles from my home. It is a nice theater but I don't go to the movie theater often, the price is too high, but I will go see that film. That is a great value to my way of thinking. I am sort of in awe regarding the value Sony, MGM, Panasonic, Warner and the rest have delivered to consumers with Blu-ray products and I log on here and see non stop complaining about high prices. At least the nonsense about how HD DVD was required to keep Blu-ray hardware prices low has stopped. That one was so silly, I couldn't believe I had to refute that constantly here.

Chris

Hummmmmmmm....6 Blu software titles for $65, nice catch.

That less than $11 per title. No wonder you have no problem with Blu's software pricing policy.

Until this kind of deal is available for ALL Blu software titles, count me in as one of those posters always bitching about Blu's software pricing policys.

ack_bak · 11-21-2008, 12:42 PM

Quote:

Originally Posted by PFC5

Excellent post!

The question is will the studios realize this in time and reduce prices as a way of securing a future large revenue stream, or will they be content with a niche market with much lower volume but keeping the high margins they have. At this point i don't know the answer, but I suspect before the holiday season is over we will have some indication.

I agree. I personally think the reality will be somewhere in the middle. I think Blu-Ray will continue to have steady growth and I think prices will drop, but I don't think we will see extreme price drops on media or extreme spikes in sales. Maybe in 2009 if the economy starts to recover, but that is a big if.

There was no way for the CE's or studios to foresee the current economic crises. Clearly some people in the industry thought they were immune and that is not the case and now some people have egg on their face. I really hope the studios follow the lead of the BD CE's and get prices down faster than they had most likely planned. Desperate times call for desperate measures

**PFC5** · 11-21-2008, 12:55 PM

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.

I am sure hoping I am wrong about that and the studios FINALLY step up to the plate.

11-21-2008, 02:32 AM	#2
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 9,876	They expect 4.5 million worldwide sales then. Not as good as expected but still not terrible. I'd agree about the cost of packaged media if there weren't so many constant 3 for 2 offers and the like, but that makes them quite reasonable. Most people don't want to buy 3 films at once though. __________________ REGION B 4TW! Latest HD additions - Breach - Kung Fu Panda - The Godfather Trilogy - Speed Racer - Kill Bill Vol 1 & 2 Box Set HD Movies - 214 Awaiting: - Life on Mars Series 1+2 Starship Troopers 3 - Men in Black - Sleeping Beauty Mario Kart Wii Friend Code - 0860-3386-9277

11-21-2008, 12:55 PM	#15
PFC5 Moderator Join Date: May 2005 Posts: 21,025	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. I am sure hoping I am wrong about that and the studios FINALLY step up to the plate. __________________ 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) Home Depot Extension Cords for speaker wire Toshiba (2)HD-A20,PS3,BD35 For SACD/DVD-A Samsung HD-841 Panny 50pz80u plasma 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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11-21-2008, 05:06 AM	#3
Chris Gerhard High Definition is the definition of life. Join Date: Nov 2005 Posts: 6,795	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

11-21-2008, 08:27 AM	#7
Chris Gerhard High Definition is the definition of life. Join Date: Nov 2005 Posts: 6,795	I don't fully understand the relationship between MGM and Sony on the Bond films Blu-ray releases but I just purchased 6 movies on Blu-ray for $65 from Amazon and got 4 tickets to see "Quantum of Solace" at a theater 3 miles from my home. It is a nice theater but I don't go to the movie theater often, the price is too high, but I will go see that film. That is a great value to my way of thinking. I am sort of in awe regarding the value Sony, MGM, Panasonic, Warner and the rest have delivered to consumers with Blu-ray products and I log on here and see non stop complaining about high prices. At least the nonsense about how HD DVD was required to keep Blu-ray hardware prices low has stopped. That one was so silly, I couldn't believe I had to refute that constantly here. Chris