News & Commentary
Disney May Raise Blu-ray Prices
The company examines ways to cut losses.
By Swanni
Washington, D.C. (February 4, 2009) -- The Walt Disney studio yesterday said it's considering raising the price on Blu-ray titles although surveys show that most consumers believe that high-def discs are already too expensive.
In a conference call with Wall Street analysts, the studio discussed various ways how it would rebound from a 64 percent first quarter earnings decline. Disney CEO Robert Iger said that the company would continue to try to convince consumers that its products have value that goes beyond price.
For instance, he said, Blu-ray discs that offer interactive features and a digital download file that enables playback on computers could be a candidate for a price hike.
"For instance, we are finding that when we sell a Blu-ray DVD with a standard DEP file and also a downloadable file, we can actually offer a price to the consumer that is viewed by the consumer as delivering greater value, which is enabling us to drive revenue at a level that is slightly better than we might have if we had not added those basically valuable extras to the DVD," Iger said.
Most Blu-ray high-def titles are priced between $5-10 more than their standard-def DVD companions and analysts have blamed this in part for disappointing disc sales. Some studios have experimented with lower prices, but Disney appears poised to raise prices.
"Today our focus is only intensifying as we address the changes affecting the DVD market. To that end we plan to reduce production, marketing, and distribution expenses at our home video business and to implement strategies that enhance the price-to-value relationship of our products. We believe the unique nature of our brand and the quality of our movies helps us to stand out in this environment but we must also innovate in order to generate attractive returns," Iger said.
Disney has recently released such popular Blu-ray titles as Sleeping Beauty, WALL-E and the Pirates of the Caribbean trilogy.
Commentary
Yes, times are tough and companies have to reassess how they do business. But if Disney raises Blu-ray disc prices, times will get a lot tougher for its home video business. Bad idea, Bob Iger.
