Sony sets price for Blu-ray discs

[Gregg Lengling]

http://today.reuters.com/news/newsArticle.aspx?type=industryNews&storyID=2006-02-08T101400Z_01_N08286567_RTRIDST_0_INDUSTRY-BLURAY-DC.XML

Sony Pictures on Tuesday became the first major studio to put a price tag on Blu-ray discs when they become available in U.S. stores this year.

At the same time, the studio unveiled what many observers believe will be a key component of the next-generation, high-definition optical disc's marketing strategy: bundling various formats together to give consumers more flexibility and mobility.

Catalog Blu-ray disc titles will wholesale for $17.95, about the same as DVDs when that format hit the market in 1997. New-release Blu-ray discs will wholesale for $23.45, a premium of 15%-20% over what suppliers were charging for new theatrical DVDs.

The higher pricing structure for new releases is meant to accommodate the sell-through and rental markets, said Benjamin Feingold, president of Sony Pictures Home Entertainment. He noted that in at the dawn of DVD in 1997, most movies initially were released on rental-priced videocassettes.

"The premium is for a way better format and to remind retailers that at the time we launched DVD, VHS was selling for $55 wholesale in the first window," Feingold said.

He added that Sony will not attach any suggested list prices to its Blu-ray discs, at least not at this time.

"From the retail perspective, this is going to be a hot product, and retailers will no doubt determine their own margin structure," he said. "We believe in a free market."

Blu-ray discs likely will start showing up in stores by early summer, sources say. In advance of that, Sony is bowing a bundling concept to DVD and the Universal Media Disc (UMD) that it may migrate to Blu-ray.

Starting March 28, consumers can buy DVD-UMD combo packs of "The Grudge," "Resident Evil," "Underworld," "Crouching Tiger, Hidden Dragon" and MGM's "The Terminator" for just pennies more than Sony typically charges for a new DVD.

A second batch of DVD-UMD combos -- "Ghostbusters," "Mad Max," "The Fifth Element" and "Snatch" -- arrives April 25, with a third wave is slated to come on the market in May.

Each combo is priced at $28.95. Sony typically charges $24.96-$26.96 for new DVD releases, while titles new to UMD generally list for $19.95.
Feingold said that is a taste of what consumers can expect when Blu-ray discs appear in stores.

"With the launch of Blu-ray, we're going to try to introduce the managed-copy concept, where if you buy Blu-ray you'll be able to get additional versions (of the same title) to use in your home," Feingold said. "Ultimately, we might even get to the point where we'll offer consumers the ability to have different versions of the same movie on different devices in the home -- that's something we're working on."

For now, Feingold said, "we're experimenting with UMD," the tiny optical-disc format playable only on Sony's handheld PlayStation Portable (PSP).

"A lot of people have DVD players and also have PSPs, and this way for one price they can get one movie and play it back on both formats," Feingold said.

Feingold would not specify whether future Blu-ray bundling would be electronic or physical, as is the case with the DVD-UMD combo packs.