Blu-ray players priced high and low

At CEDIA, Sony surprises with $2,000 player

By Jennifer Netherby -- Video Business, 9/4/2008

SEPT. 4 | Rather than introduce new lower-priced Blu-ray Disc players to go after the mass consumer, as some had expected, Sony and Pioneer unveiled pricey new models at the CEDIA consumer electronics show in Denver this week.

Nearly all the new players introduced at the show include BD Live functionality or the ability to upgrade to BD Live, allowing consumers to take advantage of new features coming on titles being released in the fall.

Sony announced the $2,000 BDP-S5000ES, due in December, which the company called fully BD Live capable. The player includes a flash memory drive and an external 1GB flash storage device for BD-downloaded features. The high-end player complements Sony’s BDP-S550 at $499 and the $399 BDP-S350 model, the latter of which debuted this summer. Both can be upgraded to include BD Live functionality.

Before the show’s start, many expected Sony to cut its price to $299 on the entry-level player. Instead the company surprised the industry with its high-end player. Sony 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 BDP-09FD with a $2,200 price tag. Due later this year, the high-end player is part of Pioneer’s effort to reposition itself as a high-end brand geared at enthusiasts.

Envisioneering Group research director Richard Doherty said the launch of premium players doesn’t signal a move away from pushing Blu-ray to the mass market. He pointed to Best Buy’s price cut on its Insignia-branded Blu-ray player to $249, making it one of the lowest-priced players on the market. Amazon.com is selling Sony’s BDP-S300 for $229. Doherty believes that prices on entry-level players will drop below $200 come Black Friday.

Envisioneering is projecting that lower prices will push Blu-ray player sales over the next 120 days above the number sold over the last two years.

At the same time, the launch of premium players is geared at targeting the 3% to 5% of Americans who say they have a home theater system and have shown no sign of curtailing spending habits.

“Blu-ray is such high quality. Blu-ray can produce better video than many theaters,” Doherty said. “When you go see Harry Potter [at a theater with digital projection], Blu-ray can produce better picture or better sound than what people are paying $10, $13 to see at the theater.”

Also at CEDIA, Samsung, Sharp and Panasonic introduced new players. Samsung showed off its fifth-generation BD-P2500, due in October with a $499 price tag. The player includes BD Live capabilities, just like the new offerings from Sony and Pioneer.

Sharp will release two new players next month, the BD-HP50U and the BD-HP21U, priced at $549 and $449, respectively. Both will have some interactive functionality for playback of trailers, bonus content and games, which can be saved on a memory card.

Netflix and LG held a press event Wednesday to show off the upcoming LG BD300, with BD Live functionality and the ability to stream Netflix movies to the TV.

This was the first time at CEDIA that Blu-ray had the floor to itself, following the demise of HD DVD earlier this year.

Blu-ray Disc Assn. president Andy Parsons said the goal at this year’s CEDIA was 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 stand-alone Blu-ray players through the 12 months 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 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 installers.

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 Pioneer 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 high-def 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 home theaters (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 high-def 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 high-def 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.”

Greg Tarr from TWICE contributed