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Blu-ray Disc prices to remain high

Consumer spend 41% of their movie budget buying DVDs; 29% on rentals

By Brennon Slattery
September 17, 2008 12:00 PM ET

PC World - Despite optical media's market dominance, it looks like Blu-ray Disc prices will not go down anytime soon. "There's not enough market [volume] to lower the price," Andy Parsons, chairman of the Blu-ray Disc Association, said at the Display Search/NPD HDTV conference in Los Angeles. He added that companies have to build "awareness and demand for the technology" before prices can drop.

But sales figures suggest a great deal of consumer awareness, especially when compared with digital downloads. DVD sales have flattened but still outpace digital downloads, with 52% of HDTV owners buying movies or TV shows on DVD, compared with 6% downloading, according to The NPD Group Inc. On average, consumers spend 41% of their movie budgets on buying DVDs, 29% on rentals, and only 0.5% renting or purchasing online. The physical media format is far from dead, and major companies aren't expecting another format war like the Blu-ray vs. HD-DVD battle.

"It's a mistake to think it's either a physical [media] or an electronic [download] business," Danny Kaye, vice president of research and technology strategy at Twentieth Century Fox, told CNET. "That's arbitrary. They will coexist."

Now's the Time to Drop Blu-ray Prices

So with the figures pointing toward physical media as the top dog, how much more consumer awareness does the Blu-ray Disc Association need before it reevaluates the current pricing scheme?

With HD-DVD out of the way, and digital downloads barely a contender, the only barrier I see between Blu-ray and market saturation is the very thing the Blu-ray Disc Association is unprepared to do. You can often buy standard-definition DVDs for $20 or less; Blu-ray Discs sell at $25 or above. In addition, DVD players get cheaper by the minute, with many clocking in at below $100, while Blu-ray players are still hovering between $200 and $800. This hesitancy to lower prices will likely prolong the life of standard DVDs, making it harder for reluctant consumers to switch.

I think there's no time like the present to drop Blu-ray prices -- which will spur customer awareness and keep competitors such as iTunes and Apple TV, the Roku Netflix box, and's Video on Demand on the periphery. It only seems fair to give a little love to Blu-ray supporters and coax newbies into the ring.

Reprinted with permission from Story copyright 2012 PC World Communications. All rights reserved.
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