Post by dkennedy on Mar 13, 2009 17:58:43 GMT -5
Blu-ray prices drop at retail
High-def titles sell for average of $26 tag
March 13, 2009
By Susanne Ault, Video Business
Blu-ray Disc new release pricing is on the slide at retail, hovering at an average of $26 so far in 2009, according to Adams Media Research, as retailers try to find the right carrot to dangle for the thriftiest consumers in years.
Through the first three quarters of last year, retail prices on Blu-ray new releases ranged between $28 and $30. Studios’ wholesale charges to retailers, generally $21 to $24 on titles with list prices of $35 to $40, have mostly stayed the same since the format’s 2006 launch, sources say, so retailers are squeezing their margins to sell more volume.
Stores are battling the quickly deteriorating economy through lower Blu-ray pricing, so there is less of a perceived difference between high-definition discs and cheaper $15 to $20 new release standard-definition DVDs.
“I think the two major things working against Blu-ray are the recession and that the layman may not notice the difference going from disc to disc,” said one chain product manager. “It’s not like it’s tape to DVD.”
Adams Media Research predicts the Blu-ray price cuts at retail will continue through 2013. By that time, tags will hit $22.09, declining from $23.24 in 2011 and $24.46 in 2010 (see chart).
Recently, Walt Disney Studios Home Entertainment’s March 3 release Beverly Hills Chihuahua, list priced at $34.99, debuted at Amazon.com and Best Buy at $27.99 and $25.99, respectively.
MGM Home Entertainment’s Quantum of Solace, distributed by 20th Century Fox Home Entertainment, streets March 24 with a list price of $39.99 but is pre-selling for $25.99 at Amazon and $26.99 at Best Buy.
Fox’s Slumdog Millionaire bows March 31 for $26.99 at both Amazon and Best Buy. Its list price is $39.99.
“Retail understands elasticity and this is their response to the consumer in this type of economic environment,” said Denis Cambruzzi, VP of Adams Media Research, a division of Screen Digest.
He also believes that Circuit City’s going-out-of-business sales have spurred deals from rival retailers.
“We’re likely to see more aggressive discounting this year,” said Cambruzzi, “as major retailers try to grab the Circuit City customer and increase their market share.”
The NPD Group, specifically analyzing Blu-ray theatrical new releases, notes the average retail price falling from $26.30 in September to $25.83 in January.
“Consumers were saying a year ago that the price was high and that they were much more comfortable at $22 or $23,” said Russ Crupnick, NPD entertainment industry analyst. “Yes, the economy can exacerbate things. But the consumers do get that Blu-ray is a premium, but it’s the extent of that premium where they are resistant.”
Retailers understand why Blu-ray is being targeted for discounting. But they worry that the format, meant to deliver higher margins than standard DVD, is being devalued too fast in its short lifetime. Once prices are slashed, it’s doubtful consumers will accept them lifted back up to original levels.
“Personally, once prices do go down, I don’t think that people will get in the habit of paying $28 or $29 for a movie again,” said one store buyer. “Retailers are just trying to get consumers into stores. But what concerns me are retailers dropping prices where the margins aren’t there. This could get into loss leader territory.”
Another retailer believes certain Blu-ray film genres need an extra push off shelves. Dramas, family and kids titles, lacking the special effects that maximize Blu-ray’s effects, do not sell as well as action titles for the chain.
“You just want people to step into the pool and try it out,” said the retail source. “Many people aren’t aware of the Blu-ray experience. But once you start watching, you don’t want to go back.”
High-def titles sell for average of $26 tag
March 13, 2009
By Susanne Ault, Video Business
Blu-ray Disc new release pricing is on the slide at retail, hovering at an average of $26 so far in 2009, according to Adams Media Research, as retailers try to find the right carrot to dangle for the thriftiest consumers in years.
Through the first three quarters of last year, retail prices on Blu-ray new releases ranged between $28 and $30. Studios’ wholesale charges to retailers, generally $21 to $24 on titles with list prices of $35 to $40, have mostly stayed the same since the format’s 2006 launch, sources say, so retailers are squeezing their margins to sell more volume.
Stores are battling the quickly deteriorating economy through lower Blu-ray pricing, so there is less of a perceived difference between high-definition discs and cheaper $15 to $20 new release standard-definition DVDs.
“I think the two major things working against Blu-ray are the recession and that the layman may not notice the difference going from disc to disc,” said one chain product manager. “It’s not like it’s tape to DVD.”
Adams Media Research predicts the Blu-ray price cuts at retail will continue through 2013. By that time, tags will hit $22.09, declining from $23.24 in 2011 and $24.46 in 2010 (see chart).
Recently, Walt Disney Studios Home Entertainment’s March 3 release Beverly Hills Chihuahua, list priced at $34.99, debuted at Amazon.com and Best Buy at $27.99 and $25.99, respectively.
MGM Home Entertainment’s Quantum of Solace, distributed by 20th Century Fox Home Entertainment, streets March 24 with a list price of $39.99 but is pre-selling for $25.99 at Amazon and $26.99 at Best Buy.
Fox’s Slumdog Millionaire bows March 31 for $26.99 at both Amazon and Best Buy. Its list price is $39.99.
“Retail understands elasticity and this is their response to the consumer in this type of economic environment,” said Denis Cambruzzi, VP of Adams Media Research, a division of Screen Digest.
He also believes that Circuit City’s going-out-of-business sales have spurred deals from rival retailers.
“We’re likely to see more aggressive discounting this year,” said Cambruzzi, “as major retailers try to grab the Circuit City customer and increase their market share.”
The NPD Group, specifically analyzing Blu-ray theatrical new releases, notes the average retail price falling from $26.30 in September to $25.83 in January.
“Consumers were saying a year ago that the price was high and that they were much more comfortable at $22 or $23,” said Russ Crupnick, NPD entertainment industry analyst. “Yes, the economy can exacerbate things. But the consumers do get that Blu-ray is a premium, but it’s the extent of that premium where they are resistant.”
Retailers understand why Blu-ray is being targeted for discounting. But they worry that the format, meant to deliver higher margins than standard DVD, is being devalued too fast in its short lifetime. Once prices are slashed, it’s doubtful consumers will accept them lifted back up to original levels.
“Personally, once prices do go down, I don’t think that people will get in the habit of paying $28 or $29 for a movie again,” said one store buyer. “Retailers are just trying to get consumers into stores. But what concerns me are retailers dropping prices where the margins aren’t there. This could get into loss leader territory.”
Another retailer believes certain Blu-ray film genres need an extra push off shelves. Dramas, family and kids titles, lacking the special effects that maximize Blu-ray’s effects, do not sell as well as action titles for the chain.
“You just want people to step into the pool and try it out,” said the retail source. “Many people aren’t aware of the Blu-ray experience. But once you start watching, you don’t want to go back.”