Retailers anticipate rise in Blu-ray set-top sales
Wide variety of players expected this fall
By Susanne Ault -- Video Business, 9/12/2008
SEPT. 12 | So far, consumers have largely gravitated toward the least expensive Blu-ray Disc set-top players, but retailers are embracing players in a wide range of price points as the format quickens its sales pace.
Consumer electronics retailers Ultimate Electronics, Crutchfield and Best Buy, among others, believe sales potential is increased when consumers are presented with wide variety. They will get that this fall, as Pioneer, Sony and Yamaha introduce models ranging from $1,000 and $2,200, far above the average player price of $399. Retailers are also expecting Sony to knock $100 off its BDP-S350 to bring it down to $299 by the end of September. Sony had no comment.
Retailers also believe the introduction of new models will help maintain healthy supply levels. As the flow of Blu-ray players to stores increased in the later summer, Ultimate in August posted higher Blu-ray hardware unit sales than standard-definition DVD player sales for the first time this year, as did other retailers.
Blu-ray’s presence in retailers’ newspaper ads also has climbed two to three times over July levels in recent weeks, according to DisplaySearch.
“Earlier this year, there wasn’t a lot of product, and we didn’t want customers coming in and not finding anything. But now supply has caught up, and we can do more outreach in stores,” Best Buy spokesman Brian Lucas said. “We don’t put things in our inserts if we can’t deliver it.”
Lucas said Best Buy welcomed the wide range of players due in stores this fall.
“I would say that the biggest thing we can bring to customers is a wide choice. We have tech savvy customers who would be interested [in advanced features], but then not everyone can have the top-of-the-line model.”
To greet the high-end hardware, such as the fall roll-out of the Sony and Pioneer players, Best Buy is planning to upgrade its upscale Magnolia showing rooms. The retailer wants to improve how it demonstrates Blu-ray hardware’s elite quality sound.
“It’s hard to do an audio demo in the middle of the store,” said Lucas. “Someone can’t get a real taste for how it will sound in their home. We are doing some work to figure out how to demonstrate players inside Magnolia.”
Across all retail channels, people are favoring the lowest-priced players by far, according to NPD Group research. Year-to-date through July, Blu-ray players priced $300 to $500 made up a commanding 85% of the industry’s unit sales. Models tagged over $900 held just a 1% share.
Other sources note that Sony and Samsung entry-level models are the most dominant set-top purchases, which is similar to last year’s consumer trends.
At Ultimate, the $399 Sony BDP-S350 and Samsung BD-P1500 models, plus the $799 Pioneer BDP-05FD player, are the chain’s top sellers, said Matt Duda, the retailer’s director of merchandising. Similarly, Crutchfield’s most popular are the $399 Sony and the $999 Denon DVD-2500BTCI, according to director of merchandising Rick Souder.
“The features of higher-end players do make them relevant,” said Duda. “One of the biggest complaints that we hear is how long a Blu-ray player takes to start up, but the Pioneer player has really improved the start-up time much more than any of the entry-level players. There is definitely a premium with some of these brands, but Blu-ray can co-exist at different price points. You cover your entire customer base.”
Boosted by Blu-ray choice and supply, retailers should sell two to three times the number of players during the holidays than in that frame last year, according to David Workman, executive director of consumer electronics buyer Pro Group.
“This is probably Blu-ray’s year,” said Workman. “Some of the other technology that has dominated attention, such as the Wii or navigational units, have been out there awhile. Coming off of previous shortages and having prices that are more mainstream will make Blu-ray a compelling thing to put under the tree.”
