Blu-ray player manufacturers, faced with increasing competition from movie download services and a weak economy heading into the holiday shopping season, are dropping prices across a range of current and older models, a market researcher said Friday.
While manufacturers originally expected to get a premium for the high-definition movie devices, many Blu-ray players today are available for less than $200, such as a Samsung model bundled with four movie discs that's available on Amazon.com, ABI research said. Holiday season prices may be in the $150-to-$200 range.
"Blu-ray vendors and dealers are starting to realize that for Blu-ray to become the next DVD, they need to lower player prices in order to generate interest and build volumes," ABI analyst Steve Wilson said in a statement.
Helping to drive prices down is increasing competition from movie download alternatives. Examples include Microsoft's video game console Xbox 360, which is also capable of downloading and playing films; broadband-connected TiVo digital video recorders; and Netflix's recently launched $100 Roku player, which streams movies from the Netflix Web site to a subscriber's digital TV. The device can connect to the site through a wired or Wi-Fi connection. Other options include Apple TV, which connects to the computer and iPod maker's online iTunes store to rent or buy movies for streaming to a television.
Along with lowering prices, Blu-ray player makers are meeting the competition head on. LG and Samsung, for example, have recently announced agreements with Netflix to offer players that can download and play content directly from the download service. "The more the Blu-ray players adopt these download capabilities, the better they will be able to differentiate themselves from standard DVD players," Wilson said.
Netflix's flat monthly fee approach in offering movies and TV shows is expected to dominate the purchased/rented video market in the next few years, according to In-Stat. The online video market is expected to rocket to $4.5 billion in sales by 2012 from $1.2 billion this year.