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Bill Sheppard on Holiday BD & HD pricing - 11.02.07

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Bill Sheppard on Holiday BD & HD pricing - 11.02.07

Old 11-04-07, 04:51 PM
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Bill Sheppard on Holiday BD & HD pricing - 11.02.07



William Sheppard
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Cheif Digital Media Officer, Client Software Group
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Old 11-04-07, 05:06 PM
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I understand where Sheppard is coming from on this. A big reason Sony and its partners wanted to start up a new format was to have another 5 year period where they could make big profits on players like the days of DVD before player prices finally bottomed out a couple of years ago.

This is why I love this format war. If there had been no format competition and Blu-ray was the only format you can bet there would be no $400 players on the market right now from them. They would also have held the prices in the $300 - $400 range for as long as possible to make as much money on the new format as possible. You definitely wouldn't be getting a $99 HD player less than two years into the new format.

Basically, Toshiba has screwed it up for everyone, but has done a great service for consumers. This is how a free market is supposed to work and why competition is important. The competition from Toshiba has forced Sony to cut prices and on the video game side the same thing has happened. Competition from Microsoft and Nintendo has caused PS3 prices to plummet.

Sure it isn't as convenient to have your movies split in two formats, but we will save a lot more money in the long run due to the competition. I think these Toshiba sales will have an impact and I'm betting there is a BD player for $199 for Black Friday.

Last edited by darkside; 11-04-07 at 05:10 PM.
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Old 11-04-07, 05:17 PM
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Did you mean...Basically, Toshiba Sony has screwed it up for everyone, but has done a great service for consumers? Because if it wasn't for Toshiba, you'd be paying $400 or more for your BD player for several more years, and there would be no B1G1 sales of Blu-ray, either.
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Old 11-04-07, 05:24 PM
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Originally Posted by DVD Polizei
Did you mean...Basically, Toshiba Sony has screwed it up for everyone, but has done a great service for consumers? Because if it wasn't for Toshiba, you'd be paying $400 or more for your BD player for several more years, and there would be no B1G1 sales of Blu-ray, either.
He means that Toshiba single handedly screwed the CEs out of price gouging the HD consumer electronics market.

I remember reading insider posts on AVS two years ago stating the major CEs were very upset with Toshiba going against them and threatening the low price battle. They are probably pulling their hair out in disgust after this week.
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Old 11-04-07, 05:28 PM
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Samsung states that Bluray's target audience is Cinephiles and early adopters.

Could it be that Bluray ISN'T going after the average TV owner?

http://www.dealerscope.com/story/sto...ection=Unknown

Last edited by Damed; 11-04-07 at 06:01 PM.
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Old 11-04-07, 05:50 PM
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Thanks for the clarification, DthRdrX.

From the article:

“What we’re not going to do is chase a Black Friday price that’s going to last seven or eight hours,” Baxter said.


Well, I think that's a mistake. Price will determine the quantity of HD users. Kind of shows the mentality of Blu-ray executives. Just think if there was no HD DVD. You'd be one fucked HD consumer, and indeed, only cinephiles and the wealthy would be able to afford HD. Hate to say it, but this is what the future will be if Blu-ray wins. We need HD DVD more badly than ever to come out on top. Only this will make the Blu-ray execs begin to ease up and be more format friendly.

Last edited by DVD Polizei; 11-04-07 at 05:52 PM.
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Old 11-04-07, 05:50 PM
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If it wasn't for the BDA, Toshiba would have you paying $300 to $400 for 5 years also. Secret Friday would have never happened if Blu-ray wasn't around and beating HD-DVD week after week.
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Old 11-04-07, 05:52 PM
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Originally Posted by Damed
Sony's COO states that Bluray's target audience is Cinephiles and early adopters.

Could it be that Bluray ISN'T going after the average TV owner?

http://www.dealerscope.com/story/sto...ection=Unknown
That may be true, but it makes no sense when your product is indistinguishable from the much cheaper competition.
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Old 11-04-07, 05:54 PM
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Originally Posted by Harry Lime
If it wasn't for the BDA, Toshiba would have you paying $300 to $400 for 5 years also. Secret Friday would have never happened if Blu-ray wasn't around and beating HD-DVD week after week.
So, if we see Blu-ray players going sub-$300 by the end of the year, then it means they are taking a beating as well? Not sure I understand. If you track Sony's record of product manufacturing, you see a history of proprietary products, and a refusal to be mainstream.

Maybe Blu-ray is beating HD DVD week after week. But I will say, lowering prices will level the playing field, no? Seems to me pricing is what will determine the majority of HD format users.

If you want to say Blu-ray is defeating HD DVD until next Christmas, that's great, but do you seriously think a $99 HD DVD player is NOT going to have an effect? It's all about price.

The brand doesn't mean shit. I think we have many new members who have said as much.

Last edited by DVD Polizei; 11-04-07 at 05:58 PM.
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Old 11-04-07, 05:55 PM
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Originally Posted by Harry Lime
If it wasn't for the BDA, Toshiba would have you paying $300 to $400 for 5 years also. Secret Friday would have never happened if Blu-ray wasn't around and beating HD-DVD week after week.
I'll agree with this as well. Not trying to put Toshiba on too much of a pedestal as a hero. Just saying that the competition is good for us regardless of which side you are on. Same is true of the video game realm. There are people that wish there was only one console and those people are fools. The thing that has kept hardware and game prices down over the years has been the competition.
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Old 11-04-07, 05:56 PM
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Originally Posted by Harry Lime
If it wasn't for the BDA, Toshiba would have you paying $300 to $400 for 5 years also. Secret Friday would have never happened if Blu-ray wasn't around and beating HD-DVD week after week.
Hence the point that competition is good. But Toshiba has thrown down the gauntlent, and now it's up to the BDA to respond.
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Old 11-04-07, 06:04 PM
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Originally Posted by Suprmallet
Hence the point that competition is good. But Toshiba has thrown down the gauntlent, and now it's up to the BDA to respond.
But will they?

So far the cheapest Blu-ray player is actually a video game system. The others available are still in the $500 range and will not be able to play certain special features in the very near future. The BDA needs to dump these 1.0 players NOW and get 1.1 ones out there if they want to still be in the game next year. I can't imagine the 1.1 players cost the same to make either, so we may see some premium prices on them.
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Old 11-04-07, 06:07 PM
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I'd say we'll see some pretty competitive Blu-ray prices around a few days before Thanksgiving. If not, then I'll be surprised. I've never experienced a company not competing price-wise with its competitor. Especially during the holidays.
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Old 11-04-07, 06:11 PM
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Originally Posted by DVD Polizei
I'd say we'll see some pretty competitive Blu-ray prices around a few days before Thanksgiving. If not, then I'll be surprised. I've never experienced a company not competing price-wise with its competitor. Especially during the holidays.
Blu-ray has always sold their players with a price twice as much as HD DVD.

I'd be shocked to see a Blu-ray player for $300 new this year.
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Old 11-04-07, 06:12 PM
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If it comes down to it:

It would probably be logical for Sony to be the company everyone in the BDA would expect to drop hardware prices below PS3 level. They would have to make a choice between helping their CE partners out & under-cutting their own PS3 pricing structure.

The thing that Bill definitely confirmed was that manufacturing costs of both are similiar and pricing structure has been due to a difference in ideology between the two camps.
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Old 11-04-07, 06:12 PM
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But Blu-ray hasn't faced this kind of mass influx of HD DVD adopters since the first days of HD DVD, and we all remember how that turned out for BD.
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Old 11-04-07, 06:18 PM
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Originally Posted by Harry Lime
If it wasn't for the BDA, Toshiba would have you paying $300 to $400 for 5 years also
Well, that's not necessarily true. Toshiba has always been one of the first of the 'respected' manufacturers eager to compete price-wise. I very clearly remember paying $249 for my first DVD player - a Toshiba with 5 free DVDs - in early '98 and DVD hit the market in what? The spring of 97? A player that's hooked up in my daugher's room now with not one issue in almost ten years...
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Old 11-04-07, 06:21 PM
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Originally Posted by Suprmallet
But Blu-ray hasn't faced this kind of mass influx of HD DVD adopters since the first days of HD DVD, and we all remember how that turned out for BD.
Judging by how many copies of Heroes was sold last week (Free with the 360AO at BB), 15k or so AOs were sold minimum last week, and at least 100k+ HD DVD players sold between Wal-Mart, Best Buy, CC. These sales have been nuts. I bought 2 freaking players this week!

Of course, player sales may take a hit in the next week or two as A2/A3 are pretty much cleared from all retail channels.
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Old 11-04-07, 06:22 PM
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I'm just waiting for a good sale on the A35. I want that bitstreaming audio for my Onkyo.
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Old 11-04-07, 06:38 PM
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Sony is screwing their CE partners by making the PS3 the lowest, most adoptable Blu-Ray player.

The allure of the Blu Ray for CE companies was assurances that it would not be licensed to cheapo vendors for cut-rate players....they probably have to keep minimium pricing, because once vendor does it, its capitalism mayhem and every other vendor would do it.
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Old 11-04-07, 08:31 PM
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Originally Posted by tbickle
Well, that's not necessarily true. Toshiba has always been one of the first of the 'respected' manufacturers eager to compete price-wise. I very clearly remember paying $249 for my first DVD player - a Toshiba with 5 free DVDs - in early '98 and DVD hit the market in what? The spring of 97? A player that's hooked up in my daugher's room now with not one issue in almost ten years...
Me too, except the daughter part.

I bought a dual disc Toshiba from 800.com for about that price and it still works great.
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Old 11-04-07, 09:22 PM
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Originally Posted by Harry Lime
If it wasn't for the BDA, Toshiba would have you paying $300 to $400 for 5 years also. Secret Friday would have never happened if Blu-ray wasn't around and beating HD-DVD week after week.
Have to agree here. The existence of two formats is what has driven prices so low so fast. Now I only hope since they are at a basement level for players, they will start competing on media.
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Old 11-04-07, 09:52 PM
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But currently, only one format is reducing its prices. And now we have an article which Blu-ray leaders affirmatively and adamantly say they don't need to reduce prices. Sounds rather anti-consumer.

I wouldn't mind going Blu-ray but the price of their players are outrageously high for me to adopt both formats.
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Old 11-04-07, 10:04 PM
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Originally Posted by DVD Polizei
But currently, only one format is reducing its prices. And now we have an article which Blu-ray leaders affirmatively and adamantly say they don't need to reduce prices. Sounds rather anti-consumer.

I wouldn't mind going Blu-ray but the price of their players are outrageously high for me to adopt both formats.
Does that part come before or after they say they will be reducing prices?

Sony Plans Blu-ray Player Price Drop; Profile 1.2 Players On the Way?
Fri Nov 02, 2007 at 02:25 PM ET
http://bluray.highdefdigest.com/news...n_the_Way/1140
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Old 11-04-07, 10:18 PM
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Originally Posted by Harry Lime
Does that part come before or after they say they will be reducing prices?
He was referring to the interview with Sheppard. Not sure if you listened to it, but he says pretty clearly that they do not want to drop prices the way Toshiba has. Their players cost the same to manufacture according to Sheppard, but they do not want to drop to Toshiba's prices. $399 seems to be their basement according to the article you posted.

I'm fine with them wanting to keep the profit margin on hardware, but don't blame consumers for buying the competition's $99 player or the $200 one with 5 free movies in store and 5 free in the mail.

I also don't want to be reminded about profile 1.1, 1.2 etc. What a FU to your consumers.

Last edited by darkside; 11-04-07 at 10:21 PM.
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