HD DVD player price to drop further in Q4

Retailers mixed on impact to format war

By Susanne Ault -- Video Business, 8/31/2007

AUG. 31 | The high-definition format war will hit a new low in the fourth quarter—price, that is.

Canada’s Venturer Electronics is set to release Chinese-manufactured HD DVD players priced below $200.

Venturer's SHD7000 will be priced at $199, according to a company representative, which would make it the cheapest stand-alone HD DVD player available today.

To date, Toshiba has the lowest priced stand-alone player, its entry level HD-A2 $299 model.

Hitting a new HD DVD hardware pricing low could be what tips on-the-fence consumers to embrace the high-def format. But many retailers, including Wal-Mart, Ultimate Electronics and Bjorn’s, say they are not committed to carrying the Venturer player, preferring instead to underscore products from bigger brand companies.

“We have no plans to have Venturer in our stores this holiday,” Wal-Mart merchandise spokeswoman Melissa O’Brien said. “We will continue to offer the best values on popular HD DVD and Blu-ray products from leading consumer brands like Sony, Samsung, Philips, Toshiba and RCA.”

Wal-Mart does sell some Venturer portable DVD players on its Web site.

Ultimate Electronics’ director of merchandising for video Matt Duda is considering stocking the Venturer HD DVD player, but he doesn’t expect a major swing in the format war until a better-known company, such as Toshiba or Sony, rolls out a sub-$200 player.

“I have never heard of Venturer,” admits Duda. “If the price [similarly drops] for a tier-one brand, that will be more compelling.”

Research firm Understanding & Solutions believes the Venturer player could push the established companies to compete with their own price cuts.

“At this early stage in the market development, consumers generally want branded product,” said Jim Bottoms, U&S director. “But low-priced non-branded players force the branded suppliers to review their pricing.”

Sales of DVD players began skyrocketing when prices fell nearer to $100, acknowledge retailers. But unlike the earlier stages of DVD, the high-def format split could stop many consumers from investing.

“The only time a price can really stimulate demand is if that demand is already there,” said David Workman, director of the Progressive Retailers Organization. “But I’m not sure demand is there. I think the recent Paramount news [about releasing titles in HD DVD exclusively] has polarized software companies even more, so there is further format stalemate. And consumers are still comparing high-def players against the price of [standard-def] players. A $199 player is still an expensive DVD player for people.”

Bjorn Dybdahl, owner of San Antonio store Bjorn’s, added, “Because of the confusion over formats, some people wouldn’t spend $50 on a product that they perceive might not be around for very long.”

Some retailers, such as Value Electronics, are already rallying around the Venturer player. Value president Robert Zohn said he is ordering 1,000 to 1,200 units, and he expects he could start selling them as early as October.

Zohn believes that $199 will be the right carrot to dangle in front of hesitant customers. When Value slashed Toshiba’s entry-level model to $199 in a promotion, the chain sold 400 units within 30 hours and had to prematurely shut the sale down.

“When it gets to a certain price point, the thing takes off like a rocket,” said Zohn, who prefers the HD DVD format over Blu-ray. “That price point moves an enormous amount of HD players.”

Venturer’s SHD7000 features 1080i video output, Ethernet connectivity and advanced audio technology Dolby TrueHD. In addition to HD DVD and CD playback, the model also upconverts standard-def DVDs to near high-def quality through an HDMI connection. The player will be distributed nationally to retailers.

For months, HD DVD backers have said Chinese manufacturers would soon start producing ultra-low-price players, likely impacting the format war. Venturer represents the first such company to potentially get the ball rolling.

A statement from Venturer, whose North American headquarters is in Markham, Ontario, touts the player “to be one of the lowest among entry-level HD DVD players.”

Ned Randolph contributed