Blu-ray Disc new release prices drop at retail

PHYSICAL: Harry Potter, Terminator: Salvation as low as $16 in high-def

By Susanne Ault -- Video Business, 11/11/2009

NOV. 11 | PHYSICAL: Retailers have added new release Blu-ray Discs to their aggressive holiday pricing strategies. Best Buy, Amazon.com and Walmart are listing Harry Potter and the Half-Blood Prince at $16 to $17 at their respective Web sites.

Blu-ray pricing at these stores, also including The Hangover for $17 to $18 and Terminator: Salvation for $16 to $18, among other high-profile markdowns, represents several dollars off the typical $25 or so tags for new high-definition releases.

Various retailers also are tagging Blu-ray editions of Night at the Museum: Battle of the Smithsonian and Star Trek, among others, at historical lows nearing what new release standard-definition DVDs are generally priced.

Many studios and industry analysts are upbeat over the pricing, believing it will help drive Blu-ray adoption rather than devalue the format.

Studios hope, however, that the pricing is limited to retailers’ seasonal merchandising and will return to higher levels by January.

Although studios are often involved in repricing plans around the holidays, sources say these retailers are generally launching their own discounts for the Blu-ray releases. The moves come on the heels of many of these same retailers engaging in $10 price wars with high-profile movies coming on DVD in the fourth quarter.

Walmart has indicated on its site that its pre-order pricing on products is guaranteed online only until the titles street. However, Up kept its $19 advertised pricing at the chain and other retailers when it bowed on Tuesday, Nov. 10.

“I think this is something that is being done for the holidays and that long-term will help the overall goals for the Blu-ray format—helping make it available to more people,” said one studio source. “Anytime prices are lowered [on products], it can make it more appealing for people to test the waters with it.”

Russ Crupnick, senior entertainment industry analyst for NPD, believes that Blu-ray software pricing needed to become more in line with DVD pricing for the high-def format to reach mainstream consumers. NPD research indicates that people continue to be negatively impacted by the recession and will spend carefully through the holidays.

“To this point, consumer reaction to pricing in the $20-plus range has been moderate,” said Crupnick. “I suspect that with all the low Blu-ray hardware pricing [with Best Buy already offering a $99 model], this will make a really killer holiday gift. But once consumers have brand new Blu-ray players and see $22 to $23 for titles, I think they might run to rental. With all of our research on the economy, consumers are still really nervous.”

Crupnick also is hopeful that low pricing will motivate people to finally start replacing their DVDs with Blu-ray versions, which is considered crucial in making up for steady declines in the packaged media business this year.

Best Buy spokeswoman Erin Bix declined to specifically discuss the chain’s Blu-ray pricing. But the product is a critical piece of their merchandising, she said.

“We hear from our customers that they want to get the most out of their high-definition television,” said Bix. “And Blu-ray delivers that. Our focus this holiday season is definitely Blu-ray and stepping customers up to the format.”

Best Buy’s current Blu-ray demos particularly stress that people’s HDTV experiences can now be replicated with home video movies.

As well as new release titles, a leaked ad from Target shows the retailer will offer catalog Blu-ray releases for $8.99 over Black Friday, which would be one of lowest known tags for high-definition catalog product.