Is DVD movie pricing holding Blu-ray back?

 Blu-ray U.S. disc sales have tripled in the past year, according to The Digital Entertainment Group, but there's a slight problem -- Blu-ray sales are still lower than where film studios would like them to be, and there's no indication that Blu-ray sales will can top DVD sales anytime soon. The studios blame Blu-ray's performance on the economy, and claim that if we were enjoying better economic times, the format's sales would be higher. But there's one person, Bill Mechanic, a film producer and former Fox Filmed Entertainment chief, who believes there's more to this story. "I think it's one part recession, but there are bigger factors," Mechanic told The Wrap in an interview. "That's a misreading of consumer behavior as well as a misreading of the economic environment. It's devalued the libraries." "If you can buy 'Titanic' for $4.99," Mechanic continued, "[consumers will say] 'Well, wait a minute...'" when they consider buying another film on Blu-ray at a substantially higher price. "There's no rhyme or reason of what I see in the market place in terms of pricing," Mechanic said. He has a point. Even on Amazon.com, where Blu-ray movies are usually priced at their cheapest level, there's a major difference between DVD pricing and Blu-ray pricing. In fact, an older film like "Independence Day" is currently being offered on DVD for $14.99 and on Blu-ray for $25.99. A DVD of a new film, "The Dark Knight," is retailing for $14.99 on the site, while its Blu-ray counterpart is going for $23.99. It sure looks like DVD pricing is holding Blu-ray back. There's no debating that Blu-ray is a superior format to DVD. But as Mechanic told The Wrap, studios are expecting consumers to replace their DVD collections with Blu-ray, so they're dropping the prices on DVDs to get every last dime out of the format. All the while, they're doing their best to to keep Blu-ray prices higher to capitalize on what they expect will be high consumer demand for the high-def format. Maybe the plan is starting to backfire. Last week, Viacom released its quarterly earnings and reported that its home entertainment sales dropped 6 percent in the last quarter. Fox Filmed Entertainment DVD sales fell 15 percent last quarter, while Time Warner's Warner Bros. division reported a 24 percent decline in DVD sales over the same period. Those aren't reassuring figures. They also underscore another issue: Blu-ray may not be the savior the film studios are looking for. So far, the market has grown and each week, more Blu-ray films are hitting store shelves. But at some point, the DVD pricing conundrum will need to be addressed. After all, why should I buy the same film on Blu-ray for $24.99 when I can get it on DVD for $14.99? Sure, it's only $10 and I'm getting a superior format, but is the difference so great that it would make me want to switch? Based on my testing with an upconverting DVD player and PlayStation 3 on my 50-inch Panasonic plasma, I'm hard-pressed to pick Blu-ray at such a drastic price difference. Sure, I get better quality, but is it worth $10 to me? Maybe once. But that difference starts piling up quickly and an entire library of Blu-ray films would cost me hundreds more than if I bought them on DVD. That's an issue. Even rentals are more expensive
But it doesn't just end with sales. Rentals are also more expensive. In fact, Redbox, the rental company that puts kiosks in stores around the country and allows customers to rent a film for $1 per day, announced last week that its current Blu-ray pricing model of $1 per day isn't working and it would be forced to raise the price of Blu-ray rentals. The company's executives wouldn't say how much more the company would charge for Blu-ray. Worse, Netflix, which adds a $1 monthly charge to its subscription plans for those who want to add Blu-ray rentals, announced in its earnings call last month that its online streaming service is outpacing Blu-ray rentals. According to Reed Hastings, the company's CEO, Blu-ray subscriptions grew 40 percent since September to about 700,000, but in the same period, "millions" of subscribers have started using the company's streaming offering. Is that a response to convenience or to price? One thing is certain: there is a pricing issue in the space. How much longer can Blu-ray be priced more than $10 higher than DVD before movie studios wake up and realize that the closer Blu-ray is priced to DVDs, the more value consumers will see in the format? Maybe they've already woken up to that reality. Just last week, a report from Josh Dreuth at Blu-ray.com, explained that movie studios have quietly started dropping the prices of Blu-ray discs and some films can be purchased at a price that's within $5 of their DVD counterparts. In fact, Blu-ray versions of "The 40-Year-Old Virgin" and "Iron Man" are currently on sale at Amazon for $14.99 and $18.99, respectively. The DVD versions of "The 40-Year-Old Virgin" is priced at $9.99, while "Iron Man" on DVD is on sale for $17.99. Unfortunately, those two films are more the exception than the norm. Based on my research, there are a select few films that are priced so closely to their DVD counterparts, but I should note that each day, more Blu-ray films are being reduced in price. In fact, Tuesday, I received a list of 55 Blu-ray films from Amazon that it just lowered prices on. Some are priced as low as $14.99. About time
To me, it's all about value. Am I getting more value out of a respective Blu-ray film that I'm paying more for than its DVD alternative? At a $10 difference, the film better be a blockbuster hit with outstanding visuals. If it doesn't have both, I'll choose the DVD. But if the price difference is nominal and rentals are priced just $1 apart, I'll pick Blu-ray every time. Maybe my rationalization is all wrong, but I do put a price on value and so far, Blu-ray pricing is outrageous. The film studios would be right to drop prices quickly and bring them down to a level that's more consistent with DVDs. I realize Blu-ray is a superior format, but let's face it -- it's not so superior that we can justify spending $10 more per film just to have it. Especially with HD streaming looming.
[Via: cnet.com ]

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VUDU permanently cuts retail price of movie set-top-box in half

We had a sinking feeling those promotional prices over the holidays wouldn't stick once Santa had done his duties, but rather than ratcheting price tags back up entirely, it has decided to permanently reduce the retail price on its standard VUDU movie set-top-box by half. As of now, prospective buyers can snag a box for $149 (down from $299), while the more capacious VUDU XL is dropping from $999 to $499 (and that'll include a gratis home theater connectivity software package). Also of note, the rack-mountable VUDU XL2 is stooping from $1,299 to $799 for those who prefer that form factor. So, these stickers low enough for you? Or are you really planning to wait 'til Christmas 2009 to score an even more special deal?

[Via: Engadget ]

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Some stations still plan early digital-TV transition

Over a quarter of all full-power broadcast TV stations could cut off their analog TV service on or before February 17 even though the official deadline has been extended another four months, according to the Federal Communications Commission.  Already 143 full-power TV stations have terminated broadcasting their analog signal. And another 60 stations have already informed the FCC that they would like to terminate broadcasting in analog before February 17. As of February 2, when acting FCC Chairman Michael Copps sent a letter to Congress urging them to delay the transition, another 276 broadcasters had told the FCC they intended to shut off their analog transmitters on February 17. If all these TV stations go through with their plans, roughly 27 percent of the 1,796 full-power TV broadcasters in the U.S. will be broadcasting only in digital. What does this mean for over-the-air TV viewers? Well, the FCC hopes that it won't disrupt TV viewing much. But for consumers who don't have a digital tuner built into their TV or haven't hooked up a digital converter box to their old TV, it could mean that they'll have fewer TV channels to watch. Earlier this week, the House of Representatives passed a bill that moves the deadline for transitioning TV broadcast from analog to digital from February 17 to June 12. The Senate has also passed a bill pushing the date of the transition back to June 12. President Obama is expected to sign it into law shortly. As part of a compromise to get the bills through Congress, lawmakers added a provision that allows broadcasters to transition to all-digital broadcasts early . The FCC met Thursday to discuss the process for allowing TV broadcasters to move to all-digital broadcasting early. Broadcasters must inform the FCC by 12 a.m. EST on February 10 if they intend to cut off their analog TV signal. And at that time, the FCC will have a better understanding of how many TV stations will actually go to all-digital broadcasts on or before February 17. The agency has said it will likely allow most of these broadcasters that would like to transition to all digital early to do so, but Copps said that the agency reserves the right to deny broadcasters from switching early if it doesn't serve the public interest. Specifically, the FCC will try to make sure that in areas where a large number of people are not ready that there are some TV stations still transmitting analog signals until the June 12 deadline. The agency will also make sure that TV stations that are transitioning early are not interfering with other TV broadcasters, using their old analog channels. TV stations that wish to switch to all-digital transmission on February 17 will have to provide ample notification to the public between now and then, an FCC spokesman said. Copps has encouraged as many TV stations as possible to continue transmitting analog signals until the new deadline of June 12. The nation's largest broadcasters--ABC, CBS, Fox, and NBC/Telemundo--have all agreed that their owned and operated stations would continue to broadcast in analog until the new DTV transition. Stations have been preparing to cut off their analog broadcasts for the February 17 deadline for months. Several TV stations throughout the country have tested switching off their analog transmission to make sure they are prepared as well as to make sure viewers are prepared. TV broadcasters are making the switch to digital to free up valuable wireless spectrum. About 61 percent of all full-power broadcast TV stations are transmitting both analog and digital signals. Leaving the analog signals on until the new deadline of June 12 will cost them more money as they are required to pay for the additional electricity and facility costs of running multiple transmitters. Congress passed the new legislation to delay the deadline because legislators and consumer advocates are concerned that 20 million people--most of whom are poor, elderly, and living in rural parts of the country--are not prepared for the transition; the government ran out of the $40 coupons it was issuing to help defray the cost of the converter boxes necessary to allow older TVs to get digital signals. There have also been reports that many consumers, who have already gotten converter boxes, are not able to connect them properly to their TVs.

[Via: cnet.com ]

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