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Sony Blu-ray DVD Player for $599?

February 27, 2007 | Author: Ibex Marketing

At a press conference yesterday, Sony announced plans to release an entry-level Blu-ray high-definition DVD player with a $599 list price early this summer. A senior VP also predicted that a Blu-ray player will be selling for less than $500 for this year’s winter holiday buying season, according to a variety of sources. Sony also cited data from Nielsen VideoScan data that Blu-ray DVDs are outselling HD DVD discs three to one.

I’m going to stand pat on my prediction that HD DVD will be the winner in this horserace. Toshiba already offers an HD DVD player for $499, and it has been out for a while. That makes the Sony model $100 more expensive when it comes out three or four months from now. That’s a long time to wait just to spend a 25% premium. And you can be sure that the HD DVD camp won’t be standing still; I wouldn’t be surprised to see a $399 HD DVD player this summer, which kicks the difference up to $200, or 50% more. Early adopters are much looser with their disposable income than the mainstream buyer, so I expect that the price is going to become increasingly important to buyers.

As for the early lead in selling Blu-ray titles, Sony executives gave the explanation in their press conference; many Playstation 3 buyers have also bought Blu-ray movie titles to play on their game console. Yes, the Blu-ray player feature was expected to be the king maker in the high-def DVD contest, but there aren’t the millions of PS3s out there that we had expected to be in place by now. And it remains to be seen whether the gamers will keep buying movies; it’s possible that they wanted something else to do with their console while they waited for more games to be released. I’m not convinced that they’ll continue to buy movies at the expense of their game budget.

If you want a good metric of where the competition is headed, don’t look at what the early buyers have purchased. Look instead at Blockbuster Online’s collections. As I write this, the company is offering 150 Blu-ray titles, but has 162 HD DVDs available. That gives HD DVD a slight edge, and shows that Blockbuster is buying 8% more HD DVDs than Blu-ray discs. If the demand for Blu-ray was truly as lopsided as the Nielsen statistics indicate, you can be sure that Blockbuster would have their inventory adjusted accordingly.