Consumers still lukewarm on Blu-ray adoption

But falling prices, retail demos attracting women to format

By Susanne Ault -- Video Business, 10/23/2008

OCT. 23 | Going into the holiday shopping season, Blu-ray Disc purchase intent remains at about the same level as earlier in the year, according to the NPD Group.

In NPD’s most recent consumer survey, in August, less than 10% of respondents said they planned to buy a Blu-ray set-top player in the next six months. That interest has remained at that modest level for most of 2008.

But this is not a doom and gloom picture for the format, noted NPD VP, senior industry analyst Russ Crupnick. He points out that current pricing declines combined with steadily improving retail environments could quickly boost consumers’ Blu-ray desire.

Starting the week of Oct. 19, Best Buy knocked the price of its exclusive Insignia Blu-ray player to $199, marking a 43% drop from when it launched in June/July. With its picture-in-picture capabilities, the Profile 1.1 Insignia represents one of the most advanced set-tops at a budget price. Best Buy’s slashing came on the heels of Target exclusively rolling out a Profile 1.1 Olevia Blu-ray player for $229 to $250, which set a new record low price for a launched Blu-ray set-top.

“I think intent could change very dramatically as people go into stores, starting with Black Friday. We’re really staring to see the prices come down,” said Crupnick. “And coming down to the levels that analysts thought was the $250 sweet spot.”

Additionally, significant numbers of NPD respondents say that store interaction and merchandising does influence shopping.

One-third of recent Blu-ray buyers said they bought set-tops because of a demo they saw in the store. Exposure to like-minded products can sway people as well: 26% of respondents said they bought a Blu-ray player and an HDTV at the same time.

“This is the thing we’ve been waiting for,” said Crupnick. “The in-store experience a year ago was: I go into the stores and I’m not wowed by the presentation.”

He adds that stores didn’t necessarily need to be at the top of their game, because “the first wave of buyers didn’t need to be marketed to—these are the real innovators, people that buy on the grounds of [superior] technology. But now, we are at the second wave of people, and we’re starting to see the impact of things in-store.”

In recent weeks, a number of Target stores have added a second Blu-ray demo area into their DVD sections.

It is still a man’s world within the Blu-ray set-top shelves, with about 60% of people who express strong purchase intent for the format being male.

But women are becoming more curious about the product, especially if retail staff communicates to them about Blu-ray’s advantages, notes NPD. About 12% of women who bought Blu-ray players say a big reason was because a salesperson recommended it, about twice the amount of men who said the same.

“Salespeople are apparently doing a better job of coaching women through the process,” said Crupnick. “That will be important, as women go into Target and Wal-Mart to buy a gift. Someone talking about the benefits [of Blu-ray] will help.”

Crupnick advises Blu-ray backers that persistent format advertising through the year should also create demand in consumers’ minds.

“I think Blu-ray has to get into the family conversations in the same way that other technology has,” said Crupnick. “Moms know that their kids want a Wii, they know they want their first big-screen TV. I think the conversations will start.”