Price fixing? No Chinese players allowed

[allargon]

A Sony Blu-ray Player, but No Cheap Chinese Models - Bits - Technology - New York Times Blog

March 5, 2008, 3:57 pm
A $299 Sony Blu-ray Player, but No Cheap Chinese Models

By Saul Hansell

Stan Glasgow, the president of Sony Electronics, held his semi-annual update today in New York, and there were a few new tidbits.

He was, predictably, bullish on the fate of the Blu-ray disc format, now that Sony’s technology has won against Toshiba’s HD-DVD. He acknowledged that the company now has to convince people they need to upgrade their DVD players .

He talked of a slow steady decline in the prices of Blu-ray players, which Sony now sells for $399 and up. He said that prices will fall to $299 for this Christmas and may be under $200 by the end of 2009. Sony isn’t the only one that makes Blu-ray players; Sharp, Samsung and other big electronics companies also compete with Sony.

Mr. Glasgow expressed hope that price levels wouldn’t collapse the way they did for DVD players. To protect against this, he said the Blu-ray Association, the group that controls the Blu-ray standard, has not licensed it to any manufacturers in China. (Cheap players from China were a large part of the collapse of the DVD player market.)

“Will there be Chinese players? Yes,” he said. “We don’t need to drive that and hand the technology over” any time soon, he said.

Mr. Glasgow also said that he didn’t see the market for Blu-ray undercut by movie downloads in the next few years. Given the speed of most home Internet connections in the United States, downloading a movie still takes hours, he said. Discs, moreover, are still popular because people can hold them and give them to others.

“People like owning packaged media,” he said. “Downloading will build over time, but it could take ten years for significant penetration.”

That said, Sony is working on a initiatives to enable customers to download video programs on to a variety of devices including PlayStation game consoles, some Bravia televisions, and the next generation of Blu-ray players that will include an Internet connection.

He confirmed reports that supply of L.C.D. panels for televisions will be in short supply this year, keeping prices firm. Sony, he said, has contracts in place to assure the supply it needs.

As for the dicey state of the economy, Mr. Glasgow expressed optimism, noting that Sony aims at higher price points favored by more affluent buyers. Nonetheless, the company is trying to reduce the amount of inventory it has in its supply chain so it can respond quicker to fluctuations in demand.

“We think the Sony brand holds up well during difficult economic times,” he said.

It was cheap Chinese players that allowed DVD to become the most successful consumer electronics product ever and replace VHS in record time. Everyone keeps saying Blu-Ray prices will come down just like DVD. If Japan, Inc. had price fixed DVD the way they want to do Blu-Ray Joe6Pack would still be using VHS players because DVD players would still be $150-200.

 

[navychop]

Impatient. Let it drop over the years, just as DVD did. Can't expect instant cheapness. Blu-ray provides a premium over DVD, and charges for it. Over the years, the premium will diminish.

I certainly agree with "ten years for significant penetration” as regards downloads. Maybe in 10 years the cablecos will have deployed a significant number of those new docsis 3 modems.

 

[mike123abc]

APEX the chief Chinese price driver (sold of course at Walmart) turned out not to be paying the licensing royalties for DVD. They do not want to let this happen again.

 

[haertig]

More sales at a lower per-sale profit, of fewer sales at a higher per-sale profit. It's their business, they can run in however they want.

But I don't think withholding licensing from manufacturers will do a whole lot to stop some Chinese factories from making BluRay players though, if what was said about APEX is true. "Licenses? We don't need no stinking licenses!!!" It's not just Chinese factories, it happens many places where there is a profit to be made. If something appears overpriced for what it is, cheaper copies will be made. Some copies might be somewhat functional, others terrible. You certainly place your bets and take your chances buying one, but it seems silly to think withholding a license will stop them.

So what should BluRay do? Withhold licensing. There's not much else they can do. Ultimately it will probably be futile, but it may work in the short term to gain them a bit more profit.

 

[diogen]

You certainly place your bets and take your chances buying one, but it seems silly to think withholding a license will stop them.

It might for a while.
There are very few component manufacturers (Sigma, Broadcom, NEC) that won't sell you the parts until paid (kjack talked about it more than once).

But I don't think this can last for a long time (1 year max, I believe).
And certainly the notion "China didn't pay DVD licenses" as the reason for cheap players is debatable...

Diogen.

 

[nonrev]

Impatient. Let it drop over the years, just as DVD did. Can't expect instant cheapness. Blu-ray provides a premium over DVD, and charges for it. Over the years, the premium will diminish.

I certainly agree with "ten years for significant penetration” as regards downloads. Maybe in 10 years the cablecos will have deployed a significant number of those new docsis 3 modems.

What an elitist thing to say. Who can be patient with the economy the way it is? $80+ to full up a car never mind a loaf of bread and you’re all for being patient so Sony can have extra time to squeeze more money out of us. You must be on their payroll that’s the only explanation for you getting more and more ridiculous with each post. Sony is clearly kock blocking the Chinese to keep prices artificially high against the American consumer. How you can’t see that and be disgusted is beyond me.Your BD love is starting to boarder on unpatriotic.

 

[JimMcC]

DAMN, I hate Sony !!!!!!

 

[mike123abc]

What an elitist thing to say. Who can be patient with the economy the way it is? $80+ to full up a car never mind a loaf of bread and you’re all for being patient so Sony can have extra time to squeeze more money out of us. You must be on their payroll that’s the only explanation for you getting more and more ridiculous with each post. Sony is clearly kock blocking the Chinese to keep prices artificially high against the American consumer. How you can’t see that and be disgusted is beyond me.Your BD love is starting to boarder on unpatriotic.

Why should they allow cheap Chinese players? They own the technology they can do what they want with it. Perhaps they feel allowing manufacturers make a profit will lead to higher quality players. Perhaps they want BD to be considered upscale? What ever the reason the market will still make the final decision if they do not gain enough adoption before the next big thing comes along.

If people like you get mad because of what you consider high priced tactics then they will not succeed, but if you give in and buy a player and movies anyways then they win.

 

[vurbano]

What an elitist thing to say. Who can be patient with the economy the way it is? $80+ to full up a car never mind a loaf of bread and you’re all for being patient so Sony can have extra time to squeeze more money out of us. You must be on their payroll that’s the only explanation for you getting more and more ridiculous with each post. Sony is clearly kock blocking the Chinese to keep prices artificially high against the American consumer. How you can’t see that and be disgusted is beyond me.Your BD love is starting to boarder on unpatriotic.

:up:up:up

 

[JoeSp]

You guys who are hoping for a cheap Chinese BD player better get real. In the tool business China's junk -- and that is what it is -- is destroying the market. Americans better get their collective heads out of their a$$es because not only are all of the jobs going to the Chinese but so is all of our money!! You better start supporting product from other countries including the good ol' USA or we will all end up in a bread line!!

This need to be cheap, buy cheap and live cheap is okay, but the BDA understands what happens if you let China in the door -- it kills your market. Yes, you might have to wait a year or two before BD players get under $200 but at least the market will make money and businesses will stay in business! And alot of those businesses employ Americans.

I guess as long as it doesn't affect your job you don't care? You better because if your friends, neighbors and fellow Americans continue to lose jobs at the rate it is going your job is not going to have enough customers to support your employee level and who knows who gets let go and who does not?

Hoping for Chinese entrance into a market is the sure sign of that markets profitablity to tank and be utterly destroyed when it comes to value for the dollar, product reliability and product improvements. Companies doing business in China might be making money on the sale but they are loosing their shirts paying for the warranty repairs. I know of one company that just filed bankruptcy over this and another that came close because of junk being produced in China. I have had to repair this crap under warranty, the same crap for the same customers over and over. Both companies I am talking about are leaders in their industry. One told me that they plan for 5% of gross sales for warranty repair and one product that is being made in China is costing the company 48% of gross!!! This one product has cost the company their entire budget for warranty repair for the entire division!!! They got screwed by the Italins who decided it was cheaper to farm out their contract to China rather than make the product in Italy. They no longer have a contract with this company.

I appoligize for my soap box rant but hoping for a Chinese solution because you think a product is too costly for your pocketbook and you can't or don't want to wait for the price to come down normally is economic suicide!! The product might make you happy because it is cheap to purchase but it is causing your neighbors to lose their jobs.

 

[gadgtfreek]

Glad to see nothing ever changes in this forum :haha

 

[dlsnyder]

A Sony Blu-ray Player, but No Cheap Chinese Models - Bits - Technology - New York Times Blog




It was cheap Chinese players that allowed DVD to become the most successful consumer electronics product ever and replace VHS in record time. Everyone keeps saying Blu-Ray prices will come down just like DVD. If Japan, Inc. had price fixed DVD the way they want to do Blu-Ray Joe6Pack would still be using VHS players because DVD players would still be $150-200.

Don't forget, that's the price that DVD players were back in 2000/2001 when the format started seeing its growth surge. It wasn't until about 2002 when you could get a player for around $100. If people (up until about January of this year) were willing to pay $3000 for a 1080p LCD flatscreen TV, why wouldn't they pay $299 for a BluRay player?

I'll answer my own question... because they already have a $99 upconverting DVD player and a library of DVDs that still look EXCELLENT on their new bigscreen.
Yes, I have a BluRay player, because I got it free with my new flatscreen TV as part of a special offer from Sharp. If I hadn't, I would still be using DVD only. As it is, I bought only 3 titles so far. It is a good format for rentals though.

 

[harshness]

Remember also that China has their own competing HD disc format, CH-DVD that is based on the HD-DVD format.

 

[NightRyder]

I'll answer my own question... because they already have a $99 upconverting DVD player and a library of DVDs that still look EXCELLENT on their new bigscreen.
Yes, I have a BluRay player, because I got it free with my new flatscreen TV as part of a special offer from Sharp. If I hadn't, I would still be using DVD only. As it is, I bought only 3 titles so far. It is a good format for rentals though.

Exactly, I hope Blu-ray succeeds but comparing pricing and consumer adoption of HDD to DVD has problems, DVD was revolutionary, HDD is evolutionary. A more valid comparison might have been CD vs SACD or DVD-A, but of course both of those evolutionary technologies failed, leaving the future of high quality disc based audio in serious doubt.

NightRyder

 

[foghorn2]

I have a XA2. $5 dvds and $10 HD-DVD's look sooooooo gewd from this thing.

Flock Sony and Blu/Gay.

 

[Stargazer]

Perhaps they feel that once the market has matured at the higher price level then they can explore other options for getting the price down.

 

[haertig]

You guys who are hoping for a cheap Chinese BD player better get real. In the tool business China's junk -- and that is what it is -- is destroying the market.

Rewind back a few years. Substitute '"Japan" for "China" in your post. Aren't all BD players made in Japan? Maybe not every last one of the things, but I would guess that the great majority are. At least designed there.

I agree that in certain products, China is not up to snuff. In others they are not terribly bad. I would not give a cold-shoulder to a product simply because it says "Made in China". I would research it for quality as best I could, because things can be iffy, but I wouldn't rule it out ONLY because of it manufacturing location. Given similarly priced products from Japan and China, I would probably choose Japan at this time. But we're not talking about "similarly priced products". Thus an individual product evaluation of quality needs to be made.

All of this is nice to discuss, but irrelevant to the topic as originally posted. The BluRay group can do whatever they want with their business model. It's their product. If they want to try to stop Chinese manufacture, more power to them.

 

[Chucky Cheese]

 

[haertig]

I've never quite understood why people post to a thread indicating that they're bored with it. Either by words or by an avatar. If you're so bored by the topic, what are you doing reading the thread in the first place? I don't get it.

 

[harshness]

Aren't all BD players made in Japan?

I'm betting that some or all of the less expensive players comes from China. There's probably subcomponents in the expensive ones that are manufactured in China too.

I'd figure that the Koreans (Samsung, LG) wouldn't bother with production in Japan.