Consumer electronics retailers Best Buy, Inc. (NYSE: BBY) and Circuit City Stores, Inc. (NYSE: CC) are now stocking only Blu-ray disc players in the wake of the fall of competitive format HD DVD. So far, Blu-ray disc players still are not that competitively priced compared to standard DVD players, which the industry may have a problem with if consumers continue to decide that standard DVD is "good enough" to use with that new flat-screen TV.But at least the software catalog within the Blu-ray camp is getting some support. In addition to recent sales that placed some hit movies in the same price category as standard DVD players, the two retailers are not forgetting the huge camp of Sony Corp. (NYSE: SNE) PlayStation 3 owners, all of whom have a full Blu-ray disc player built into their gaming machines. This Blu-ray "owner's club" of sorts is a captive market at this time, and the two largest consumer electronics retailers are taking advantage of it. For example, a "buy 2, get 1 free" special is in effect this week at Circuit City stores, while Best Buy is offering a free $10 gift card with the purchase of two Blu-ray titles.
Not that both retailers have a lot of work to do -- they are both promoting Blu-ray just fine -- but hardware prices and eventually movie title prices will need to reach critical mass from the manufacturers and disc distributors before consumers go nuts on the format like they did with DVD a decade or so ago. It's nice to have a single, next-generation optical disc format to make the choice for the consumer dead simple. But, those consumers want the lower price also -- and Blu-Ray still isn't there yet. With gas hovering at record levels, would you buy one right now?
Comfort Zone Investing: One thriving area of real estate: Apartments
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Reader Comments (Page 1 of 1)
1. There are several problems going for Blu-Ray...
1. Costs too much. The consortium won't license the technology to cheap manufacturers. Until you get cheap players to the Wal-Mart crowd you will not have a critical mass. The manufacturers can’t do that because they need to recoup costs with the format war.
2. Confusion in the market. 1.0 players vs. 2.0 players. The consortium is allowing manufacturs to produce version 1.1 players even when the 2.0 spec is out. Which does a consumer choose? Confusion is never good for a market.
3. Technology. Up-scaling technology built into the TVs and DVD players is getting better and better. It is good enough for people who have spent YEARS building a collection.
4. Blu-Ray is not big enough and there are not enough of them. Already studios are talking multiple disc releases because Blu does not have enough room for all the things they use to put on a DVD but now need to be rendered in HD with better audio. Disney is going to release three movies with two blu-ray discs this year. This just makes the discs remain high in price out of reach for the average buyer. Also, the current studios have purchased the entire stock of discs that will be produced this year. Late comers from the HD-DVD camp are only able to purchase smaller single layer discs and won’t be releasing back catalogs for a long time because there unwilling to do the work without the necessary space.
What does all this mean? It will be years before Blu-Ray gets even close to DVD. Digital distribution is only going to be stronger by then. I think the movie industry is going to suffer the hard realities that the music industry is going through now.
Posted at 10:10AM on May 1st 2008 by Sean