The magical pricepoint myth

[AltonDarwin]

I'm not sure if Wal-Mart is tracked by individual store sections, interesting question. I get better clothes at Kohls, food at the farmers market, or my local butcher. And as far as stuff for kitchens etc. Kohls, Bed Bath and Beyond, or my local hardware store. So by your argument Wal-Mart shouldn't be making a dime because there are other place were you can get more quality items. By the way Wal-Mart carries Sony, so does that make Sony's electronics junk? If you're going to debate me, please know something of what you're talking about.

No I'm not saying that Sony makes junk, but just refuting the "most people go elsewhere because they know wal-mart..." statement.

MOST people who shop at Wal-Mart have families. Is a $200 HD DVD player a bargain when it won't play HI-DEF discs from Disney, Fox and Sony? Think about that for a moment. Both sides have great popcorn flicks AND great "real" movies. Do you REALLY think that tossing Disney under the bus spells "value" to a Wal-Mart customer? I don't think so.

Any consumer spending money in this war has to measure that quandary for THE FIRST TIME IN THE HISTORY OF HOME VIDEO. $200 is NOT a value for less than half of the current blockbusters and past catalog of movies. It's just not. By extension, a $400 player isn't a "value" either, which is why more people haven't jumped into the game yet.

[bruceames]

In the climate of a format war, consumers are more apt to wait until either a winner emerges, or the price of a player from one of the formats comes down to a point where they feel that it's a risk worth taking. Many if not most will probably be shopping initially for an upscaling DVD player and since both formats' players upscale DVDs well, it reduces the risk down to near zero if they feel the money they paid for the HD player is (almost) worth it for the upscaling alone.

Therefore in this climate of a format war, the appeal of the 'magic' price point is one that basically overpowers the fear of buying into the wrong format. And as I said these players double as great upscalers so in spite of the war people will bite for this reason alone at some price point if they are in the market for such a player. They may be aware that only 1/2 the available HD movies are compatible, but also that it plays their DVD collection better than they've ever seen it and besides they now have their foot in the HD optical door (whereas they couldn't before because they were too expensive or the price/risk ratio was too unattractive).

I think $199 is an appealing, or 'magic' price point, but it won't be the only one...only the first.

[carljmi]

MOST people who shop at Wal-Mart have families. Is a $200 HD DVD player a bargain when it won't play HI-DEF discs from Disney, Fox and Sony? Think about that for a moment. Both sides have great popcorn flicks AND great "real" movies. Do you REALLY think that tossing Disney under the bus spells "value" to a Wal-Mart customer? I don't think so.

Any consumer spending money in this war has to measure that quandary for THE FIRST TIME IN THE HISTORY OF HOME VIDEO. $200 is NOT a value for less than half of the current blockbusters and past catalog of movies. It's just not. By extension, a $400 player isn't a "value" either, which is why more people haven't jumped into the game yet.

I have a family and as far as the BULK of the Disney cartoons that I own I have no interest in replacing them in Hight Def regardless of who wins the format. My player up converts them fine, and a child really isn't going to be able to tell the difference. If any player up converts fine I don't think many parents will worry about that. This is were I think children's titles aren't going to be that much of a factor in this. Obviously this is my own opinion and like assholes.... . But the split may or may not hamper it. As for the normal people with smaller 720p and what not they may be happy with the up conversion. Hell that may even be a dumb move with some of the studios issuing out the children's titles before Christmas. I don't see any family wanting to repurchase a movie in hi def when they just got the thing before getting a high def player. That being the case we may get a season of people buying the players and waiting for the prices go down to start purchasing High Def movies. I still think that the pricing is going to make a difference. Hell with the A2's dropping under 200 my daughter may get one for Christmas along with a HDTV between 26-36inches at 720p.

[carljmi]

In the climate of a format war, consumers are more apt to wait until either a winner emerges, or the price of a player from one of the formats comes down to a point where they feel that it's a risk worth taking. Many if not most will probably be shopping initially for an upscaling DVD player and since both formats' players upscale DVDs well, it reduces the risk down to near zero if they feel the money they paid for the HD player is (almost) worth it for the upscaling alone.

Therefore in this climate of a format war, the appeal of the 'magic' price point is one that basically overpowers the fear of buying into the wrong format. And as I said these players double as great upscalers so in spite of the war people will bite for this reason alone at some price point if they are in the market for such a player. They may be aware that only 1/2 the available HD movies are compatible, but also that it plays their DVD collection better than they've ever seen it and besides they now have their foot in the HD optical door (whereas they couldn't before because they were too expensive or the price/risk ratio was too unattractive).

I think $199 is an appealing, or 'magic' price point, but it won't be the only one...only the first.

should have read this before I posted. Great points.

[HomeTheatreFreak]

Actually, media price is the problem, when HD media price drops to the point of just a couple dollars more, then you'll see the mass consumer beginning to adopt. That's if they have a HDTV already.

Yep I have said it ime and time again and that is the rediculous prices that peole see when they go into Best Buy such as Heroes on HD DVD for 100 bucks or average titles for 35 bucks is doing far more damage to the adoption of HD then the war or the player prices ever will.

The sad thing is it is very unlikely we will see a drop in software price before the market gets much much bigger as the biggest discount in manufacturing comes with mass production. So HD will always be slow adoption wise until the prices come down but the prices wont come down until alot of people are in the formats. Its just a bad situation all around, lol.

[ken]

There is nothing magic about lower price and volume sales.

Economics 101. When two products cannot be differentiated by the consumer the price becomes the deciding factor.

Even more so, if the product shows little consumer demand price becomes the key factor.

The goal for all products like the ones we're dealing with, is to get to the magic price point where the buy becomes a spontaneous.

[bruceames]

There is nothing magic about lower price and volume sales.

Economics 101. When two products cannot be differentiated by the consumer the price becomes the deciding factor.

Even more so, if the product shows little consumer demand price becomes the key factor.

The goal for all products like the ones we're dealing with, is to get to the magic price point where the buy becomes a spontaneous.

Excellent points.

[carljmi]

There is nothing magic about lower price and volume sales.

Economics 101. When two products cannot be differentiated by the consumer the price becomes the deciding factor.

Even more so, if the product shows little consumer demand price becomes the key factor.

The goal for all products like the ones we're dealing with, is to get to the magic price point where the buy becomes a spontaneous.

geez someone else who didn't sleep through Econ.

[leons26]

magic price point?

what is the magic price point of car?? why even make BMW's and Benz's when you can buy a Kia or a Hyundai?

why buy a dinner at 5 star restaurant when you can go the Mcdonald's value menu?

why buy a Denon/Harmon Kardon/Marantz receiver when you can buy a COBY HTIB system from Walmart?

why buy a million dollar home when you can buy one for $75K?

why, why, why have I asked these questions before and yet to here a valid response from an HD DVD zealot??? why?

is it because maybe value is more important, not price???

That is why you have C class Mercedes. Not everyone can afford the high end.

Which do you see more of on the streed Mercedes or Toyota and why is that?
I would bet unless you live in Saudi Arabia that you see more Toyotas. Because people not only look for price when buying things. They look for the value of a dollar.

On the other side, what I believe tobe your side. Why isn't everyone that loves sports cars looking for a Corvette. One of the best bang for the buck sport cars? That is because variety is the spice of life. Of some will think that Blu is better and some will think that HD DVD is better. The only think I HATE about this war is I have had to LOOK for HD DVD players in stores like Best buy and Circuit City. Is that because they sell more of them? I don't think so, but I can't be sure. Even though the choice is taken away in that setting.

A million dollar house is great!!! Unless it is California. Just kidding but who has that kind of $$$$$ to spend? Not I my friend so I have to get the best house I can for the amount of money I have.
Does that help any?

P.S. I don't hate rich people as I hope to be one someday.