Blu-ray player sales not rising with lower prices

Retailers say sour economy overshadows discounts

By Susanne Ault -- Video Business, 11/14/2008

NOV. 14 | Blu-ray Disc set-tops are quickly falling in price, but to mixed sales results, according to retailers who believe the sour economy is overshadowing the discounts.

Texas superstore Bjorn’s and Pennsylvania-based Gerhard Appliances saw no sales change after Sony and Samsung cut $100 off their respective BDP-S350 and BD-P1500 models to $299 at the end of September.

“When everything started happening in October on the financial side, store traffic was there, but the purchasing wasn’t there,” Bjorn’s president Bjorn Dybdahl said. “Blu-ray sales are level, but we’re projecting down sales for November and December [spanning all product categories]. Overall, October sales were down by double digits [over that month last year.] It think it’s because of the economy.”

Some in the retail community are doubting whether Blu-ray players will hit the 2.5 million installed base that has been projected for the end of this year.

“For us to hit projections at the end of the year, you will need to see more of an acceleration of sales,” said David Workman, executive director of consumer electronics buyer Pro Group. “There may be a revised range, where it wouldn’t surprise me to see sales in the 2 million to 2.5 million range.”

Workman and other retailers are nevertheless hopeful that Black Friday will prove a boon to the format, with Blu-ray player pricing sinking to new $150 to $200 pricing lows.

“At that pricing, you’ll sell a lot more units,” said Workman. “There is a 300,000- to 500,000-unit selling opportunity” on Black Friday.

Consumers do increasingly prefer cheaper Blu-ray players, according to NPD Group research. Year-to-date through September, $200- to $299-priced models comprised 17% of all Blu-ray set-top unit sales. That compares to 9% for that same frame through July.

Gerhard Electronics is planning to drop pricing on $299 Sony and Samsung players to $200 on Black Friday, which sales associate Erik Meyer thinks should spur spending.

“In October, we didn’t sell any more Blu-ray players because of the price drops, but at $200, you’ll see a big rush on them,” said Meyer. “People are really holding onto their money because of the economy. But at that price, you will see them move as holiday gifts.”