Blu Ray prices
January 22, 2010 7:26 AM   Subscribe

I've noticed that Blu Ray discs are priced a lot higher than DVDs.

Reminds me of the CD vs cassette tape price gap in the 90s. Cassettes cost more to make but were priced cheaper that CDs and then we had that lawsuit. Are they gouging or do Blu Rays cost that much more to make or is it a supply and demand thing?
posted by zzazazz to Technology (32 answers total)
 
It's what the market will bear. The manufacturing price of a BD is slightly higher, but only because volume isn't up yet.
posted by Chocolate Pickle at 7:30 AM on January 22, 2010 [1 favorite]


There's a lot more going on in a Blu-Ray disc. They hold upwards of 25GB of information whereas a DVD is, what, 4.7? It's just natural that they'll cost more. A blank BD-R will always cost more than a blank DVD-R, regardless of any actual manufacturing cost.

But yes, I'm sure some of the price is because they're still relatively new.
posted by carlh at 7:30 AM on January 22, 2010


Blu-ray discs are different enough from DVDs that making them requires substantial restructuring of the manufacturing process. I assume those changes run to millions of dollars for each manufacturing facility, but I don't have any actual numbers. I'm just remembering the gist of things I've read in the past. One of the selling points of HD-DVD (the failed format) was that it required almost no changes to the manufacturing process and thus would be much cheaper to produce.

And yes, they are charging way more for them now because they can, not because it costs that much more to make. Even considering the one-time expense of updating the manufacturing facilities, the discs themselves cannot cost more than a few dollars to make.
posted by Nonce at 7:32 AM on January 22, 2010


They hold upwards of 25GB of information whereas a DVD is, what, 4.7? It's just natural that they'll cost more.

Crazy talk. This here 2Tb hard disk I just bought (points) holds much more than this older 100Gb one over here, and yet it cost much less. Unpossible, right?

They cost near-nothing to make. The Pickle is correct: it's the amount people will pay.
posted by rokusan at 7:33 AM on January 22, 2010 [5 favorites]


There was an article in the past year (that I now can't find) about how the movie companies were expecting to ride the higher price of Blu-Ray discs for a while (i.e., now that DVDs are so exceedingly cheap)--but that they were starting to feel the pinch because consumers were not willing to pay 32 dollars for a movie. Does anyone else remember that article?

The price of Blu-Ray discs is going to fall further and further.
posted by Admiral Haddock at 7:33 AM on January 22, 2010


Are you entering this with some assumption that a Blu-Ray is the same technology, or would for some reason be cheaper to produce than a DVD?
posted by floam at 7:34 AM on January 22, 2010


My confidential industry source revealed that one large replication company is currently charging approximately $1.15 per single layer HD DVD (15GB) and $1.30 per single layer Blu-ray Disc (25GB), assuming a quantity of 25,000.

That's two years ago. Linky.
posted by rokusan at 7:35 AM on January 22, 2010


This isn't the article I was thinking of, but it serves the point.
posted by Admiral Haddock at 7:35 AM on January 22, 2010


The lawsuit you reference, which resulted in a settlement, did not address the comparative costs of production but alleged that CD manufacturers and retailers were illegally fixing prices.
posted by iknowizbirfmark at 7:35 AM on January 22, 2010


rokusan: "Crazy talk. This here 2Tb hard disk I just bought (points) holds much more than this older 100Gb one over here, and yet it cost much less. Unpossible, right?"

But you're talking about an older technology that's already been purchased. A 100Gb drive purchased today costs less than a 2Tb drive purchased today.
posted by carlh at 7:36 AM on January 22, 2010


Blu-rays aren't always more expensive than DVDs--for instance, Amazon's Criterion Collection Blu-rays are often several dollars cheaper than their DVD equivalents.

But, yeah, it's a matter of what the market will bear.
posted by Prospero at 7:36 AM on January 22, 2010


Floam, I accept Blu Rays may cost more to manufacture but there is so much of a difference now in the price of the two formats that you can't help but be suspicious. Especially after the blatant fixing and gouging of the CD prices in the 90s.
posted by zzazazz at 7:38 AM on January 22, 2010


Carlh, I think the point he's making is that a 2TB drive TODAY costs less than a 100GB drive BACK IN THE DAY. This is always the way. I spent less on my 8 core Mac Pro than I did on my Quadra 650.

Just because it is better does not mean it should cost more. In most cases, it should cost less.
posted by Admiral Haddock at 7:39 AM on January 22, 2010


iknowizbirfmark, you're right about that lawsuit but I think I am correct about the manufacturing cost difference. I hope I wasn't full of shit there. I remember reading that sometime.
posted by zzazazz at 7:42 AM on January 22, 2010


OP, yes, 100% you are being gouged. I don't think this should be a surprise to you. As I said above (still wish I could find the link), Hollywood viewed the Blu-Ray format as a chance to recoup home video sales now that DVDs are so incredibly cheap. They are finding that consumers are reluctant to pay the premium, even for the demonstrable increase in quality.

You can't blame the studios for trying, though.
posted by Admiral Haddock at 7:43 AM on January 22, 2010 [1 favorite]


I dunno, I think once the technology is adopted, it'll be the same regular price. In 1995, a 10-pack of 3.5" disks cost about $5. In 2000, a 10-pack of CD-Rs cost about $5. Now, a 10-pack of DVD-Rs cost about $5. Really, they're getting cheaper, because inflation has increased so significantly.
posted by Jon_Evil at 7:47 AM on January 22, 2010


Why does anyone charge more for HD than SD? Because people will pay extra for HD.
posted by smackfu at 7:49 AM on January 22, 2010


One bit of historical context.. Back when DVD was released, a VHS copy of a new movie was outrageously expensive. Like $60 or more. DVDs came out priced at about $20 and suddenly people were buying movies for home instead of renting them. This was the birth of the big home video sales market and a big part of why many movies now make more money after DVD release than in the theaters.

My guess is that Blu-Ray pricing is being set just low enough that the industry thinks consumers will still buy a movie rather than rent it, but otherwise as high as they can to squeeze out more revenue. I also think that's backfiring, I hear a lot of people complain that Blu-Ray discs are too expensive to buy. Sorry, I don't have citations for any of this.

Another bit of context: Netflix recently announced they will delay renting of Warner Brothers movies by a month after retail DVD/Blu-Ray release. Presumably they were forced to do this by the movie studios. There's a good chance that in a few months all movie studios will have similar embargoes, which means that consumers may be forced to buy (or steal) expensive discs if they want to see a film early.

All in all the movie industry increasingly sees disc sales as a more important source of revenue than theatrical release. Expect more consumer-hostile pricing and policy to come.
posted by Nelson at 7:51 AM on January 22, 2010 [1 favorite]


Slightly off-topic, but if you shop at Amazon, Blu Ray prices aren't that much higher. In a lot of cases, BD is actually cheaper than DVD.

Up
BD: $28
DVD: $22.50

Transformers: Revenge of the Fallen (2-disc)
BD: $17
DVD: $25

The Dark Knight
BD: $15
DVD: $22

Star Trek
BD: $17
DVD: $25
posted by puritycontrol at 7:51 AM on January 22, 2010


And you see exactly the same thing just among DVDs, where the production prices are exactly the same: would you call it gouging that a new movie costs $20 on DVD, while "From Justin to Kelly" costs $4.99 in the Walmart DVD bin?
posted by smackfu at 7:52 AM on January 22, 2010


It's a premium price to distinguish it from DVDs, which are no longer a premium product. The existence of a DVD at a lower price justifies a higher price for a higher quality product, so companies can charge more and make more money.

DVDs were around the $40 mark when that standard was first released and they dropped. Blu-Ray seems to be dropping at a fairly even rate, and will probably do so quicker as digital distribution of films increases.
posted by mikeh at 8:10 AM on January 22, 2010


"...I think I am correct about the manufacturing cost difference. I hope I wasn't full of shit there. I remember reading that sometime."

I'm sure that you are correct, but there any many other factors which affect street prices[1] of retail products more than the manufacturing costs, which from quotes in the thread appear to be about 5-10% of street prices for Blu-Ray discs.

I suspect that, for retailers, Blu-Ray discs priced around $15 may be loss leaders anyway.

[1] That is, actual prices you can buy these products for, not what you can buy bad copies for on the street corner.
posted by iknowizbirfmark at 8:22 AM on January 22, 2010


The manufacture of scale for bluray is much smaller than DVD. Price is high because of this and of course because of the economics of monopolistic markets. Production is also a cost. Studios need to do transfers from the original film to the bluray format. They cant just use the old DVD transfer.

On to of that, Bluray is doing pretty poorly thanks to competition from VOD, Netflix, torrents, etc. If the studios could sell the discs for 9.99 they probably would, but I doubt thats going to be feasible for a long time, if not ever. I suspect they are also deathly afraid of commodizing bluray like they have now done with DVD. I imagine there are a lot of concerns with bluray pricing and the final price is calculated more with monopoly voodoo than anything else.
posted by damn dirty ape at 8:49 AM on January 22, 2010


I don't know if you noticed but there were some great deals on Blu-Ray discs over the holidays, specifically at Target and Costco. Many were heavily discounted and Target had a $5 off coupon that you could stack. We picked up close to a dozen movies, with a couple under $5 with discounts.

The Blu-Ray movies that we've opened have all had way more stuff on them than a standard dvd - multiple commentary tracks, making of films (sometimes more than one), etc. Also at least one (Up I think) included a Blu-Ray version of the film, a standard dvd version, and an unlockable Ipod/PC version. There is definitely value added with that.

And Pixar movies in 1080p look amazing.
posted by Big_B at 9:01 AM on January 22, 2010


I wish I could find the article I read a few weeks ago, but it basically demonstrated that average BR prices are following the same curve as DVD prices in the first few years after release.

Give it another couple of years and BR will be at the same price level as the $5 Wal-Mart DVD bin.
posted by blue_beetle at 9:05 AM on January 22, 2010


A bit of truth in both camps.

They'll charge a higher value, because of customer's perceived value.

There's some heavy licensing issues with blu ray (AACS) - it was $5k + per title, but now it's down to only $500.
New purchase of authoring systems (hate to tell you there is no duplication compliant abstraction layer (easy) DVD authoring software.) Authoring software is between 4k-50k per station.
Replication plants have to be retooled.
Authors (for anything beyond basics) have to learn new programming concepts.
posted by filmgeek at 9:33 AM on January 22, 2010


In both cases the actual media costs barely anything. You're really paying for the content, and on Blu-ray, you're getting more content. There IS a higher up front cost to scraping that together, but if you're selling a million copies, that isn't going to be a big deal either.

I'm not saying this isn't some kind of illegal price fixing, but it takes neither rocket scientist nor collusion to realize that people may be willing to pay more for something better, and charge accordingly.

Are they gouging or do Blu Rays cost that much more to make or is it a supply and demand thing?

If by gouging you mean charging more than they strictly need to to stay in business? Certainly they are. They don't cost more to make, but it is a supply and demand thing, but the emphasis here is on the (real or perceived) demand, rather than the supply.
posted by aubilenon at 9:47 AM on January 22, 2010


You do realize that Blu-ray and DVD are different products and not just different containers? There is a huge quality jump between the two, I would imagine that Blu-rays would pretty much always cost more than DVDs.
posted by wongcorgi at 10:02 AM on January 22, 2010


Not sure what you mean by "gouging". I think it's what they sometimes call price segmentation.

Suppose the shop buys its stock at a wholesale price of $15.

The owner may think if he prices it at $20, he will sell twenty copies at a profit of $5 each, making him $100.

Or if he prices it at $25, half of those people will walk away. But selling the others ten copies at a profit of $10 each, still makes him $100.

But what he really wants to do is sell it to the ten rich people at $25, and the ten poor people at $20. That way his profit is 10*5 + 10*10 which makes $150.

So what he wants to do is create a "premium" product for the rich people, and an "economy" product for the poor people. They can be different qualities. They might be the same product in different packaging. Or they might be absolutely identical, but he'll give away $5 discount coupons that only poorer people will bother to clip.

Now Blu-Ray does have some differences in quality and production price to DVD. But mainly it's about marketing a premium product and an economy product to maximize profit

There's nothing illegal about doing this. It's not like a cartel where different companies are conspiring to make profits higher all round (say if all the retailers agreed to sell at $26). I'm not sure if it's what you call gouging or not.
posted by TheophileEscargot at 11:38 AM on January 22, 2010


There's some heavy licensing issues with blu ray (AACS) - it was $5k + per title, but now it's down to only $500.

That's because AACS has been cracked. It no longer represents any kind of protection.
posted by Chocolate Pickle at 4:19 PM on January 22, 2010


Rats. I meant this link.
posted by Chocolate Pickle at 4:20 PM on January 22, 2010


I think everyone else has pretty much covered the question, but, since I work for a home video distributor, I feel like I should chime in. (I'm in the operations department so, basically, I set products up in the database. Been at it since 1999, when we were still in the VHS business.) So, yes, the replication/authoring costs are currently still higher for blu-ray than for dvd, and the sales are lower.

As far as how pricing is decided, I suppose it varies from company to company. I know that for us, the general policy whenever we're doing a new release is for someone in Marketing to plug the various costs (licensing, authoring, manufacturing, packaging, marketing, whatever) into a profit & loss chart, to figure out how many units at what price & configuration would be do-able. There's definitely some guesstimate work involved, since you can't predict how many units people will buy, you look at how many units were sold of similar products.
posted by oh yeah! at 10:17 PM on January 22, 2010 [1 favorite]


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