Standard Blu-ray pricing starting to emerge

Paramount offers rentailers $10 BD bundle deal

By Susanne Ault -- Video Business, 12/5/2008

DEC. 5 | Retailers and distributors see individual studios beginning to standardize wholesale pricing on Blu-ray Discs, though there still appears to be little relationship between features and price.

Titles with extensive BD Live interactivity, such as Warner Home Video’s $24.99 wholesale The Dark Knight and Walt Disney Studios Home Entertainment’s $24.50 Sleeping Beauty, for instance, cost less than Paramount Home Entertainment’s $25.95 Eagle Eye, which lacks Web features.

A standard cost is emerging within individual studios, distributors said. Warner is at $24.99 for distributors and direct retail accounts (Dark Knight and Get Smart); Paramount at $25.95 (Kung Fu Panda, Indiana Jones and the Kingdom of the Crystal Skull, Iron Man and Eagle Eye); Disney at $24.50 (The Chronicles of Narnia: Prince Caspian, WALL-E and Sleeping Beauty); and Sony Pictures Home Entertainment at $25.95 (Hancock and Step Brothers).

None of the studios would comment on pricing.

Distributors and retailers contacted by VB said they believe studios are still experimenting with Blu-ray prices and features.

“It’s a wild west attitude,” said Ian Leshin, Newbury Comics buyer. “Everyone is trying to stake out their place in the world.”

John Sanders, products/operations manager at Blockbuster franchisee Major Video, added, “If it’s $24.50 or [something else], we’ll buy it the same either way. It doesn’t make much sense, but it’s not a big difference.”

Sanders does admit budget planning would be simpler if Blu-ray costs were the same across the studios, as they generally are on DVD.

“It would make it easier if there was a standard,” he said. “It would be easier in penciling February’s number whether I know I’ll spend X amount on these Blu-ray titles, as opposed to seeing that I was off by a couple of dollars.”

The wholesale price on most standard-def single-DVD new releases is $17.99 across studios and has been for several years, according to retailers and distributors. The exception is Paramount, which raised its price to $18.30, about 2% higher than average, earlier this year.

For Blu-ray, the retail pricing on shelves also seems to be inconsistent, suggesting stores are experimenting as well. At times, retailers seem to be pricing under the titles’ costs. For example, at Amazon.com and Best Buy, The Dark Knight is priced at $23.99. Other titles such as Eagle Eye represent a mark-up, at $27.99 and $29.99 at Amazon.com and Best Buy, respectively.

Retailers are generally happy to see that studios are expanding Blu-ray re-pricing offers, which help accounts deepen their title selection at a reasonable cost. Catering expressly to the rentailers, Paramount is offering a $10 title bundle deal in which rentailers can purchase 10 Paramount Blu-rays at a $10 per unit cost, representing a significant discount from original pricing to stores.

“It’s a real rental-friendly program,” said Don Rood, director of business development at VPD. “It’s a great move in this economy and is a way to get people to experiment with the new format. This gets their product to more stores and on more shelves.”

Paramount’s plan comes on the heels of Warner Home Video and Lionsgate lowering the SRP on a number of their catalog Blu-ray titles.

Regarding Paramount’s standard DVD price hike, the retail community appears to be taking it in stride.

“A 30¢ jump when you buy a million worth of units can add up, but for us, it was minimal,” said Ted Engen, president of the Video Buyers Group. “The bigger volume guys might feel the increase more. The cost of everything has gone up, and our main concern is with operation expenses, such as heat [and rent]. Those are the real issues versus a few pennies with Paramount.”

Another distributor source explained that studios are looking to boost revenue with an aging DVD business, but said he hopes other suppliers don’t follow suit.

“We had the same price for 10 years, and now it costs less to make a DVD than it did before,” the source said.