Media Wonk

Reading Sony's Blu-ray price cut - February 26, 2007

So I guess we can assume Sony’s $999 BDP-S1Blu-ray Disc player wasn’t exactly flying off retail shelves.

If it were, I can’t imagine Sony would be telling us now about plans for a $599 player this summer with exactly the same features, plus CD playback capability. That announcement, at a press conference in New York Monday, should pretty much put a halt to whatever sales the $999 player was managing to capture.

It will also cost Sony some short-term cash, as it will have to price-protect retailers who just saw the value of their BDP-S1 inventory chopped by 40%.

Sony, of course, already has a $599 Blu-ray player on the market, along with a $499 version, in its PlayStation 3 consoles, and the announcement this week is simply an acknowledgment that it’s hard to sell $1,000 players when you’re offering consumers the same capability—along with a killer game player—for half that.

If that’s the case it’s not great news for Panasonic, Pioneer or anyone else still trying to sell high-end standalone Blu-ray players.

The real message and more troubling message, though, is that it’s hard to sell $1,000 anything when the consumers have no guarantee that they’re buying a seat on the right train.

It’s not clear that you can sell a $599 something under those conditions either, or even a $499 something as Toshiba is attempting to do, which is why both the Blu-ray and HD DVD hardware camps seem to be preparing for a nasty price war in the second half of this year.

Sony’s $599 summer price could well hit $499 by the holiday selling season, about the time HD DVD players are expected to start hitting the market priced around $399.

And there’s nowhere to go but down.

With consumers still sitting on the sidelines—judging from the lackluster sales of both formats to date—the two sides are about to pay the price for the confusion they’ve fostered.

Whether the consumer ultimately benefits depends on whether there’s a clear winner in the price war. And that could take some time to determine.

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