Fun going back and seeing my comments from almost 4 years ago. How about that $99 price needed on a Blu-ray , and my concerns over IPTV (compare that to latest release from NPD), as well as the industry need to promote the VALUE of the innovation and technology we provide, vs the consumer just waiting for a cheaper price.
Ah if I was only so good with picking Lottery Numbers!!!!! ;-)
JZ
By Greg Tarr -- TWICE, 2/23/2009
NEW YORK — As the economic storm clouds grow
darker, consumer electronics manufacturers are looking at a handful of growth
categories — including Blu-ray Disc players — to hedge the industry's bets, but
one major retailer told TWICE that he fears the category is still not the
slam-dunk some perceive it to be.
Some manufacturers believe the economy
could actually have a positive impact on the fledgling Blu-ray category this
year. As consumers hunker down in their homes and avoid expensive nights out,
they can become more willing to spend to upgrade their entertainment experience
at home.
“We're still in agreement with CEA's estimates that Blu-ray
decks have the potential to double this year to roughly 5.7 million units,” said
Tim Alessi, LG Electronics product development director, who said he sees the
cocooning encouraging that adoption. “Also, a new category of Blu-ray-based home
theater has begun to emerge which will also add to the installed base. We
believe that providing home-entertainment options will be a key to
growth.”
Similar to the CEA, market research firm FutureSource Consulting
is predicting U.S. stand-alone Blu-ray Disc player sales at 6 million in 2009,
up from 2.5 million in 2008. At the same time, sales of Blu-ray-enabled
PlayStation3 consoles are forecast to rise from 3 million in 2008 to 5 million
in 2009. By 2012, the research firm sees the PS3 in more than 20 percent of U.S.
homes and stand-alone BD players in 50 percent.
But at least one retailer
wasn't as optimistic. Jonathan Zupnik, Sears audio/video/TV DMM, told TWICE: “I
continue to have concern about Blu-ray. It did not hit industry expectations
last year with production issues. I also believe the economy has had more of an
impact than believed. The simple reason being the difference is not demonstrable
in comparison to VHS to DVD. Standard DVD looks very good on a 1080p TV. Unless
you are watching on a 60-inch-plus TV, it is hard to see the impact [of a 1080p
Blu-ray Disc]. I do not believe the industry numbers will be hit this year,
unless they drop the price.”
Demand was generated in the fourth quarter
of 2008, largely through the price promotions and system bundling run by
manufacturers and retailers during the critical holiday shopping season, some
industry watchers have said.
Major price promotions were offered by
leading discount chains, such as Wal-Mart's $129 special, Target's $149 special
on an Olevia-branded player and Best Buy's $169 sale on an Insignia-branded
model.
Since then, most prices have trended back up to more than
$200.
According to a consumer study conducted by SmithGeiger in 2008 for
the Digital Entertainment Group, 60 percent of respondents listed higher cost as
the largest reservation they had in making a Blu-ray Disc player purchase.
Additionally, some of those who do use Blu-ray mentioned price as one important
factor when considering the purchase of a Blu-ray Disc title.
Sears'
Zupnik said, “As we are hearing the opening price point is already flashing $149
— it needs to be $99 to really get things going. Even with that, as long as the
movies are over $20 that will continue to keep things at a relatively slow pace.
The consumer is used to [disc prices of] $13.99 at launch and picking through
bins at $3.99.”
From a hardware perspective Reid Sullivan, Samsung
digital audio/video marketing VP, said that he is wary of Samsung moving player
prices downward too quickly.
“While price will always be an important
consideration, especially in a soft economy, we believe there is a great
opportunity to improve the consumer experience by offering more value,” Sullivan
said. “The biggest opportunity to increase Blu-ray sales is to attach to the
large and growing base of HD flat panel TVs. Consumers that may have recently
purchased a HDTV now realize that only Blu-ray can deliver a true 1080p
experience and bring out the full potential of their HDTV.”
Sears' Zupnik
agreed, saying: “1080p is the only call out that seems to attract consumers to
Blu-ray, they are well aware of 1080p due to the TV spec, and matching it up is
easy.”
In addition, Samsung, LG and other hardware manufacturers
introduced Blu-ray Disc players that add IPTV applications with the ability to
download various forms of audio and video content through built-in broadband
connectivity as a value-enhancement.
“For LG, new player adoption begins
with providing the best access to content for consumers,” Alessi said. “To do
this we've partnered with the best in the industry, players like CinemaNow,
YouTube and Netflix.”
Samsung's Sullivan said: “We also think more and
more consumers will find video-on-demand and other content services appealing as
they become easier to use and offer a wider selection of content.”
But
Zupnik said the IPTV message has not gotten across to most consumers
yet.
“I have not seen much of an impact from IPTV, but the younger
generation is comfortable with a significant amount of streaming and this may be
part of why Blu-ray hardware's install base is not as large as we all would like
it to be yet. I don't believe HD on demand, and quality content that is easy for
the consumer to download is a threat [go packaged media].”
As for the
wider crop of Blu-ray players adding BD-Live as another form of added broadband
functionality, Zupnik said he believes retailers and manufacturers need to do a
better job of getting the message out.
“BD-Live is not a requested
feature,” he said. “Disney has done a good job [promoting it], almost to a
fault, where you would think only Tinkerbelle and such titles they have
advertised have this feature. If there isn't a stronger marketing campaign to
draw attention to the increasing number of titles that are BD Live, I am not
sure it will be worth much to consumers.”
In general, Zupnik said, the
industry needs to generate more excitement and awareness for their
products.
“Customers don't get it about consumer electronics as a whole,”
he said. “Vendors and retailers do not do a good job building awareness and
pent-up demand for new technology — other than the iPhone, the iPod and the last
round of video game consoles. If there is no awareness or education before the
product is released, the customers do not have any opportunity to apply a value
to the benefit the technology will be for them, and determine if they need it
right away or are willing to wait. This generally keeps the majority willing to
wait until it hits a price, but the price is not based on what the technology is
worth.”
