Black Friday and Blu-ray: Do or Die?

[J_UNTITLED]

From Variety...

"... This year, however, stakes are even higher given the uncertainty surrounding Blu-ray: Execs are hoping that low player prices will drive purchases and help the high-def format take off at last.

The big question is whether these prices will entice converts in a roiling retail climate. Blu-ray player prices will certainly reach new lows on Black Friday: Wal-Mart will be selling a Magnavox Blu-ray player below $130, while rival mass merchant K-Mart is selling a Sony Blu-ray machine for $179. Mass merchants have also steeply discounted Blu-ray discs to entice shoppers during the official kickoff to the holiday gift-buying frenzy.

The importance of Blu-ray cannot be overstated. Studios need the format to offset sales declines in the aging DVD format. Homevid declines are pinching studios that have come to rely on the coin to cover production and marketing costs of their theatrical releases. Digital sales, while also growing, are even smaller than Blu-ray sales at this point, and considered unlikely to substantially eat into disc sales for a few years.

Because standard DVD sales dwarf those for Blu-ray, strong sales in that format are even more crucial on a title-by-title basis during the holiday period. To boost DVD sales, studios have ramped up their promotions.

Paramount, for example, took the unusual step of placing a $5 coupon for "Kung Fu Panda" purchases in full-page ads in the New York Times and Los Angeles Times late last week. The promotion is all the more notable because the studio had already bundled "Kung Fu Panda" with the separate "Secrets of the Furious Five" disc to boost sales.

Massive retail pushes also are expected for "The Dark Knight" when it arrives on disc Dec. 9, and studios have churned out lavish gift sets by the scores, even for recent movies such as "300" and "I Am Legend."

However, despite all these promotional efforts, home entertainment execs do not expect holiday sales to make up for soft sales earlier in the year. The Digital Entertainment Group recently projected a 3%-4% decline in overall homevid sales worldwide this year and a 6% drop in DVD sales. The homevid biz, which posted its first substantial spending decline last year, had hoped for a turnaround by the end of this year but now projects that a return to growth is at least a year away (Daily Variety, Nov. 17)."