Dreaming of a Blu Christmas
Internet Capability, Low Prices Boost Sales of HD Movie Players
By Yukari Iwantani Kane and Miguel Bustillo, The Wall Street Journal,
December 23, 2009
Blu-ray players, particularly those that can exploit Internet video services, are a hot item this shopping season.
Just 3½ years after Samsung Electronics Co. introduced the first Blu-ray player for $999, prices have dropped to as low as $80, making them an irresistible item for many consumers this year. Shoppers can now find dozens of brand-name Blu-ray players by the likes of Samsung, Sony Corp. and Panasonic Co. in the $130 range at large retailers, with some available for $99 or less in promotions.
But shoppers are also flocking to models that cost a bit more, starting around $150, for their ability to stream content from the Internet, including movies, television shows and music from services like Netflix Inc., Google Inc.'s YouTube and Pandora Media Inc.
Sales of both basic and new-wave Blu-ray players were up 53% during the week of Black Friday, according to market-research company NPD Group Inc., which obtains point-of-sale data from undisclosed electronics sellers, excluding Wal-Mart Stores Inc. Overall, the industry is expected to ship nine million Blu-ray players in 2009, up 54% from the previous year, according to research firm IDC.
Jim Beglinger, a 63-year-old San Francisco architect, was planning to buy a basic Blu-ray player to go along with a 37-inch high-definition television he purchased. Then he discovered Blu-ray models enabled to deliver video over the Internet were only $229. They were so affordable, he upgraded his choice. "It's all about convenience," he said, adding that he bought two so he could give one to his daughter.
The price plungeexpected to be a hot topic at next month's Consumer Electronics Showpartly reflects typical deflation for many consumer-electronics products. Prices on TVs and many gadgets have fallen 20% or more in the past year. But Blu-ray player prices have fallen faster than anyone has expected, in part because the price of laser components used in the devices has fallen dramatically.
"There's no season in the DVD saga that saw players come down like this," says Rick Doherty, an analyst at Envisioneering Group, a market-research company.
Analysts add that the Blu-ray price decline is particularly well timed, since prices of high-definition TVs are falling as well. Amazon.com Inc., for example, is selling 37-inch high-definition LCD televisions for less than $600. Blu-ray players exploit the full image quality of high-definition TVs, showing movies in 1,080 lines of resolution as opposed to just 480 lines for DVDs.
For an all-in-one device, Sony's PlayStation 3 consoles play videogames, Blu-ray and Internet content.
Studios are also offering a broader range of titles in the Blu-ray format. New movies are now available in both Blu-ray and regular DVD formats, and Blu-ray versions of older movies are being released slowly but surely. Prices for these also have dropped significantly; while studios typically set a price of $30 or more for Blu-ray titles, discounts this season have brought some down to $17 or less.
When Blu-ray beat out a rival format to succeed DVDs nearly two years ago, some people worried the devices, which merely played discs, would be stunted by competition from Internet-delivered movies. But consumers are opting for both, using the devices to play discs and get Web services into the living room.
For example, for as little as $8.99 a month, Netflix subscribers can access online movies that start playing with a single click in addition to receiving rental DVDs in the mail. (Blu-ray movies cost an additional $3 a month.) Roxio CinemaNow, another Internet-movie company, allows viewers to stream movies on a pay-per-view basis, with prices running from $3.99 to $4.99 for most new releases.
"The pie is getting biggerpeople are consuming more entertainment," says Chris Fawcett, vice president of home audio and video for Sony. The company also reduced the price of its PlayStation 3 videogame console, which comes with a Blu-ray player and Internet capability by $100 to $299, making it an attractive all-in-one device.
Blu-ray devices connect to the Internet through home networks, just like computers, via wires or built-in wireless adapters. (Few, however, can surf the Web like a computer.) The precise way that consumers access Internet content on Blu-ray players can vary by manufacturer, but in general they use their remote to navigate the main menu of the Blu-ray player. Then, users click on categories of entertainment offerings to view libraries of movies, music, and television shows and make a selection.
Some low-end players can't access such services, or can use the Internet only to access extra scenes and interactive content on Blu-ray discs through a feature called BD Live.
The emergence of Blu-ray players that can also stream Internet movies finally convinced Shawn Roberts, an Oklahoma City attorney, to make a move last month.
Mr. Roberts, 37 years old, and his wife haggled with Best Buy and got a reduced price on a combination of a flat-screen television, Blu-ray player and media cabinet. He says they never would have wanted a Blu-ray player before becoming intrigued by streaming movies from Netflix, which they had tested on their computer.
"That was a huge factor in our purchase," said Mr. Roberts, who derives nostalgic enjoyment from watching 1980s television shows on Netflix, such as "Growing Pains" and "Gimme a Break."
Blu-ray boosters foresee another potential boost from an emerging technology: 3-D home movies, which are expected to appear by next year.
The Blu-ray Disc Association, an industry consortium, is expected in coming weeks to finalize a 3-D playback standard, and 3-D content is expected to be another hot topic at the Consumer Electronics Show. Blu-ray discs are essential for viewing 3-D content, since 3-D movies come in large digital files that are impractical to stream or download over the Internet.http://online.wsj.com/article/SB1000...006064500.html