The need for healthy holiday sales in a bear market, competitive pressure from movie download services, and media speculation about the future success of the Blu-ray disc (BD) format itself has resulted in falling Blu-ray player prices across a range of current and older models.

“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,” comments ABI Research principal analyst Steve Wilson.

Second tier players and older – 6-9 months – models are now widely available under $200. Amazon is offering a Samsung model bundled with four discs for that price. Holiday season prices may be in the $150-200 range. All of this runs counter to many of the industry’s original market forecasts and expectations. According to ABI.

“They are also getting more competition than they expected from download alternatives such as Xbox 360 and the Roku Netflix player, TiVo and Amazon. However downloads provide an opportunity as well as a threat: both LG and Samsung have concluded agreements with Netflix that allow some of their players to download movies and TV shows straight from Netflix. The more the Blu-ray players adopt these download capabilities, the better they will be able to differentiate themselves from standard DVD players,” said Mr. Wilson.

As a consequence for consumer electronics manufacturers, who expected to enjoy premium prices on Blu-ray equipment for some time, they now need reduce pricing on their BD players so that either increase their popularity or keep the adoption pace on the desired level. It remains to be seen whether amid economic crisis customers will actually decide to start switching to Blu-ray, as many are cutting their spending now and are unlikely to pay premium price for BD movies, which are more expensive than DVDs.

Tags: Blu-ray