Pricing for BD software has dropped significantly everywhere, fostering an increase in demand and spending. In the US, BD software pricing has fallen more than 10% for new releases and a full one-third on catalog titles since 2008. This has caused spending on theatrical Blu-ray catalog to increase 72% from the same 2008 period. However, retailers would like prices to drop more.
According to Rentrak data cited by
Video Business, the retail price of a single-disc theatrical new release on BD dropped 12% to $23.47 between July 2008 and July 2009. Catalog pricing over that same frame dropped even more steeply by 33% to $17.23.
In the UK, according to Futuresource data cited by
One to One, new releases on Blu-ray have seen a 40 percent drop in the last six months, from £27.29 in February to £16.74 in August. Catalogue pricing has also fallen, but not so much: from an average price of £16.87 in February (15 percent down). However, average catalog price across the three largest British etailers (Amazon UK, Play and HMV) has dropped way beyond the average, as average catalogue price goes now for £11.22.
Back in Q4 2008, both in the US and the UK, the premium for purchasing a new release title on Blu-ray compared with DVD was between 30 and 80 percent. However, for catalog BD titles this premium was considerably higher, and in some instances was as much as 300 percent (i.e., the BD cost four times as much as the DVD).
Although it has never been disputed that consumers will pay more for Blu-ray, Futuresource believes that the premium in the market in 2008 was clearly not sustainable. Retailers too have long complained that the premium placed on Blu-ray versus the SD DVD versions of the same titles discourages customers from buying the high-def versions, and welcome these price drops.
“Studios are making these moves to drive some additional sales with Blu-ray,” said David T. Barker, VP of e-commerce marketing at DeepDiscount.com parent Infinity Resources. “I definitely think that cost is still a factor, because getting a dollar from a customer isn't easy.”
Steve Torr, director of software purchasing and rental services at InMotion Entertainment, added, “I'm of the opinion that Blu-ray pricing needs to go down faster. Catalog is doing nothing right now. It's tough. I think a Blu-ray title should be $2 to $3 more than a DVD. The film buffs get it, but the everyday consumer just isn't seeing the value in Blu-ray yet.”
One unnamed US retailer only sees its catalog titles sell when they are promoted at their heaviest, typically within the $12.99 and $14.99 range, and certainly not at $25.
Futuresource's Alison Casey confirmed that “although a number of new BD releases are beginning to achieve healthy sales volumes, catalog titles continue to disappoint”. The retail price of Blu-ray titles, particularly when compared to DVD, is a key factor in holding back sales. “Research shows that Blu-ray player owners are making a value judgement call when deciding whether or not to pay the Blu-ray premium”, Casey added, remarking that BD player owners often continued to buy some titles in standard definition.
Some retailers say studios are trying to apply to Blu-ray the same strategy used during the launch of DVD, but that a bolder pricing approach as regards discounting is needed. However, studios seem satisfied with the results of their pricing programs, which include point-of-sale rebates and lower entry price points. Year-to-date, spending on theatrical Blu-ray catalog is up 72% from the same 2008 period, according to sources (although no hard figures were given).
The price levels for new-release and catalog BD are now close to what customers desired in an NPD survey conducted earlier this year. Respondents said they most wanted to pay $19.62 for a new release, $16.93 for a new-to-Blu-ray catalog movie and $16.16 for a Blu-ray movie out on shelves for at least six months.