Blu-Ray And The Economy

Even if I rent Blu-Ray movies online, I go check, from time to time, what the 2 local video rental stores are doing with their Blu-Ray selection.

Slowly, gently they are arriving

So, yesterday, I discovered that they are slowly starting to offer Blu-Ray movies. The first store had more titles with it's own section but they started to mixed them too with the DVDs.

While at the second store, I started to talk to the manager. I should mentioned that the last time, he did not have any Blu-Ray movies. I asked if he had made a special section for Blu-Ray movies like I suggested. He said that he only had 2 titles so far and preferred to mixed them with the DVD to save space. I can understand that.
Since he started to offer those 2 titles last month, one was rented 1 time and the other titles 3 times. Plus, they cost $10 more than the DVD version.

What's the economy has to do with Blu-Ray?

To play Blu-Ray movies, you need an HDTV and his clients don't want to invest in a $400 Blu-Ray player. This is the kind of response he got from them:

I just bought my HDTV last year and I don't have the money for the HD player.

That's when he talked about the economy and how he affected him and his clients. You see, video rentals is one place people will cut first when they are not sure about the economy or their jobs.

For example, Crocs (those colorful footwears) was developed here in Quebec City and was bought by an US company. That company decided to lay off 500 employees(production) this week thus offshoring the manufacturing to a cheaper country ($2,50/hour versus $15/hour). The Quebec City plant represented only 4% of the manufacturing world wide. The government even tried to help them when they layoff 200+ at the start of the year. Even the ministers were surprise by that recent decision. That was the bad news in the newspaper yesterday.

I'm mentioning you this because this news came from nowhere. So, you can imagine that people may not feel secure when you hear this kind of news.

What Blu-Ray can do?

With the economy going worst in the US(bigger market), the price of Blu-Ray players/movies should be reduced. Even if Blu-Ray won the HD format war, it's biggest competitor is still the cheaper DVD. This is not the best time to sell a new and pricier video technology to consumers.

I have 2 propositions for Blu-Ray:

First, the price of a Blu-Ray movie should be same or close to a DVD. When a consumer start to cut on renting, it's easy to understand that they won't buy as much movies. By making it the same price, it will allow rental stores to get more copies. Buyers will turn to renters.

Second, cut the price of Blu-Ray players. I don't know how much margin they got but I'm sure they can save on royalties and higher price parts. A $199 player for 2008 holiday should be the goal. It's lower than the $250 most often projected but it's a better price point for a family gift. I still want the manufacturer to make a small profit but they must understand it is in their best interest on the long run.

Conclusion

The current economy will play a big part on the future of Blu-Ray. Will companies look for the short term like most do or will they invest in the long term?

Are you renting or buying Blu-Ray movies or still with a DVD?

If you rent(DVD, Blu-Ray) and want to make money, read my free ebook.

Edit 1 (2008/06/09): In the news(USA): Because of the high gas price, some will travel less and stay home instead and see/rent movies instead. That may give Blu-Ray some small hope with Blockbuster promoting it in their stores.