Rambo: First Price Break (Video View)May 28, 2008
For Blu-Ray, the victory in the high-def DVD format war was only the beginning of a long struggle to convert the masses from standard DVD to its 1080p counterpart. With the cash cow of the last decade showing signs of weakness, Hollywood is looking for another source of reliable revenue, and they have elected to stake their claim in the valley of Blu-Ray. It remains to be seen, however, whether DVD adopters will make the hoped-for transition. Will Blu-Ray be the next big thing in home video? Five years from now, will it be the standard? Or will it be like Vista, shunned by all but a loyal few. (In this scenario, standard DVD is XP.)
The end of the format war came at a bad time. Just as HD-DVD folded, the economy went in the tank. Now, people are too busy worrying about filing up their cars with gas and buying food to concern themselves with replacing a perfectly good DVD player with something new and shiny. In a hot economy, there's little doubt that Blu-Ray would be thriving. But it's hard to convince people to upgrade their video system during a time of shaky job and housing markets.
Two main factors are preventing Blu-Ray from going mainstream. The first is the cost of the players. Yes, they're a lot cheaper than they used to be, but not cheap enough. Blu-Ray players should be positioned to replace DVD players. That's not the case. Today, if a DVD player breaks, the consumer will buy a sub-$100 model rather than move to the high-def alternative. By Christmas, bottom-of-the-line Blu-Ray players may be selling for $250 to $300 (right now, they're $350 to $400, with the PS3 – the most popular version – at $400), but in this economy, that may still be too much. Shave off another $100, and the market looks better.
Then there are the actual disc prices. Consider last week's big seller: National Treasure 2: Book of Secrets. Discounted at amazon.com, the standard DVD sells for $15 and the Blu-Ray for $24. That's a significant difference. If software titles are meant to be an enticement to adopt Blu-Ray, prices are a mitigating factor. The reality is that for Blu-Ray to be successful, prices have to come down to be in line with those of DVDs. Consider a consumer who owns a Blu-Ray player and loves National Treasure 2. He wants to buy a copy not rent one, but money is tight. In this hypothetical situation (which is what it surely must be for anyone to want to buy National Treasure 2), the $8 differential means there's a decision to be made; however, if the price was equal (or nearly so), Blu-Ray would unquestionably win.
That brings us to Rambo.
As part of a push for the home video release of Rambo, the three previous First Blood movies are getting Blu-Ray treatment. They are available singly or as a three-pack. The prices are surprising. Discounted, the box set is $35. The individual movies are $14 each. Admittedly, the standard DVD releases are even cheaper, but these are prices I can live with. $14 may be a new low for a major Blu-Ray release. It's an older movie, but that hasn't stopped studios from charging in the $20-$30 range before this.
$35 is a nice price point for a three-movie pack on high-def. Costs like this not only encourage those who don't own copies of the movie to buy them but may even encourage fans who own copies of the movie on standard DVD to upgrade. Ultimately, upgrading is where a lot of the money will be made. The studios are relying on collectors re-buying high def versions of standard DVD titles. This is only going to happen if the price is right. I'll re-buy a lot more movies at $14 than I will at $24. It's a simple matter of economics. With the Rambo set, I bought the $35 Blu-Ray package because I don't own the movies on standard DVD and they are cheap enough that I wasn't annoyed by the price. At $50, I might not have made the purchase, and at $60 or $70, I certainly wouldn't have.
While the Blu-Ray for the new Rambo is at a more pricey $23 (versus $18 for the standard DVD), it's the vintage movies that offer a ray of hope for those of us who prefer to buy high def but don't like paying a premium price. Then again, there's always NetFlix...
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