Sony surprises with pricey Blu-ray player
At CEDIA, Pioneer also pursues high-end strategy
By Jennifer Netherby -- Video Business, 9/4/2008
SEPT. 4 | Rather than introduce new lower-priced Blu-ray players to go after the mass consumer as some had expected, Sony and Pioneer unveiled pricey new models this week at the CEDIA consumer electronics show in Denver.
Sony's BD-S5000ES player will be priced at $2,000.
Sony announced a $2,000 player along with six others as part of its fall lineup. Most will be available in Japan only, with just two being offered worldwide—the $2,000 BDP-S5000ES player due in December and the $399 BDP-S350 model, which debuted this summer. Before the show’s start, many expected Sony to cut its price to $299.
Instead, it surprised with its high-end player. The company also introduced two home-theater-in-a-box systems with integrated Blu-ray and three new desktop computers with Blu-ray drives.
Pioneer, meanwhile, announced a new top-of-the-line player, the BDT-09FD, with a $2,200 price tag and due later this year, all part of its effort to reposition itself as a high-end brand geared at enthusiasts.
Also at the show, Samsung introduced its fifth-generation player, the BD-P2500, due in October with a $499 price tag. The player includes BD Live capabilities as do the new offerings from Sony and Pioneer.
This was the first CEDIA where Blu-ray had the floor to itself following HD DVD’s demise earlier this year.
Andy Parsons, senior VP of product planning at Pioneer Home Entertainment Group and U.S. chairman of the Blu-ray Disc Assn. Promotions Committee, said the goal at this year’s CEDIA is to get the story out that Blu-ray is selling as well as the industry expected and to convince those in the custom installation business that Blu-ray players fit into the overall HDTV experience.
Through the end of July, Parsons said Blu-ray disc sales were 50% ahead of total 2007 sales and he countered reports that said sales weren’t meeting expectations. He said any problems were due to supply shortages.
Sony projected that the industry would sell 7 million standalone Blu-ray players through the 12months ending in March, up from the 2.1 million units sold last year, according to a story in the Wall Street Journal. (The company didn’t respond to e-mails by press time.) The manufacturer told the WSJ it expects to sell 3.1 million of those units for a 44% share of the market. The company also said it expects to sell 10 million PlayStation 3 consoles this year.
As part of its effort to sell the CEDIA crowd on Blu-ray, Walt Disney Studios Home Entertainment president Bob Chapek and 20th Century Fox Home Entertainment president Mike Dunn flew in for a lunch and to hold one-on-one chats with some attendees.
Pioneer used the show to unveil its slick new ad campaign created by TBWA\Chiat\Day that continues the effort begun last year to reposition itself as a premium brand around its KURO line of TVs, Blu-ray players and other high-def components. The company is trying to break away from the pack and the HD industry’s focus on low prices.
“We’re really focused on this home theater marketplace in a much different way than others,” said Russ Johnston, executive VP of marketing and product planning for the Home Entertainment and Business Solutions Group at Pioneer Electronics. “Our target demographic is the discerning entertainment junkie.”
Rather than competing on price or wowing consumers with specifications and acronyms, Pioneer is trying to sell the home theater experience (Blu-ray player included) as an emotional experience.
As part of the shift, it has worked with retailers such as Best Buy and smaller, more high-end players to create store-within-a-store sections devoted to its HD products in 45 stores, while an additional 100 locations have devoted a wall or other space to the brand, Johnston said.
Pioneer sees Blu-ray as part of the HD experience and with retail partners has been sending e-mail and direct mail to customers who bought Pioneer HDTVs, pushing Blu-ray players as an add-on, he said.
Johnston said the new strategy has been working and the high-end of the market doesn’t seem to be cutting back on purchases, unlike more price-conscious consumers.
“Retailers in the elite channels haven’t had a slowdown yet,” he said. “We’re waiting for it, and we think it might be coming.”
