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Price cuts and bundling offers before Christmas

Territories covered

North America

USA,

Published: 11-Dec-07

Consumer electronics manufacturers, mass market retailers and both hi-def formats' promotional groups are working together in order to drive Blu-ray Disc (BD) and HD DVD consumer adoption during the Christmas shopping season.

A critical consumer price point was reached when US retailers including Wal-mart, Best Buy, Amazon.com and Circuit City started selling HD DVD players for less than $200.
Blu-ray Disc (BD) backers responded to the discounts by slashing their prices too: Sony's BDP-S300 is now $100 cheaper at $399 (equivalent to the 40Gb PS3 games console), while Samsung's BD-P1400 is currently available for $339—almost $200 less than its original SRP.
Wal-mart reportedly sold between 90,000 and 100,000 Toshiba HD-A2 players during its $99 two day-offer US offer in November designed to shift the older model.
In the meantime, 'soft' bundle deals—allowing customers to redeem five to eight BD or HD DVD discs for free with the purchase of a hi-def player—are running in the US and Europe as well as in Australia, where latest HD DVD Consortium promotion allows consumers as many as 10 soft bundled HD DVD titles along with hard bundled disc (in the box) when they purchase Toshiba's HD-XE1 $1,299-HD DVD player.
Retailers continue to offer discounts on software, with Amazon.com running a 'buy one Blu-ray get one free' offer at end November while BestBuy will offera $100 software gift certificate to customers who buy Sony's BDP-S300 from mid-December.

Our take...
Prices of both HD DVD and BD players have fallen considerably since launch, reaching around 40 per cent of their original launch prices over the last 12 months. Price declines of this magnitude on DVD players took over four years and coincided with the development of early mass market for the format. The falling prices of hi-def placers are driven by the format war as attempt to speed consumer adoption of the individual formats. However the reduced prices do not compensate for CE manufacturers for their production costs, promotional and marketing expenses together; Toshiba itself stated it only expects to start being profitable after April 2008. Smaller companies, which had earlier announced their plans to launch 'cheaper' HD DVD players have found it difficult to attract buyers to their products; Japanese CE manufacturer Onkyo launched its €899 DV-HD805 in Autumn 2007, but has reportedly ceased shipping the player in Europe.