Why I think Blu-Ray Players will Hit $99 by this Time Next Year

I once had a discussion with some colleagues before Christmas about the price of Blu-Ray players. I made the bold prediction a year from now, the average price of a Blu-Ray player would be less than $150, with some players selling for less than $100. They disagreed with me, saying that it would not drop below $200, that it would take more than a year for prices to drop significantly. I'm sticking to my prediction, and these are the reasons why.

The current price range for a Blu-Ray player is from $150 to $300, depending on brand.

I think there are at least two major factors that will push down the price of Blu-Ray players. The first factor is the Sony Playstation 3 (PS3). Although most people think of a PS3 as a video game console, it also has the lesser known capability of playing Blu-Ray discs right out of the box. In fact, it is widely known in the industry as the best Blu-Ray player available. This is because, aside from the fact that it does play video games, it can easily be upgraded to the latest Blu-Ray standards, it has an internal hard disk to store data, and it can also function as a streaming video player (more on this later). Sony is positioning the PS3 not just a video game console, but as an all-in-one entertainment hub.

However, despite all of the features of the PS3, it has done terribly against its direct competion, the Microsoft XBox360 and the Nintendo Wii. Microsoft and (more notably) Nintendo have been successful with their respective video game consoles.

Microsoft released the XBox360 months ahead of the PS3, and was able to capture gamers that wanted the next piece of technology. This, coupled with the established XBox Live network (which allow players to go online and play against each other) and a solid collection of games, have made it hard for the average (and even hardcore) gamer spend $400 for another video game console (and this doesn't even include the price of games, which retail for about $35-$50). To make the XBox 360 even more appealing to consumers, Microsoft has recently dropped the price of the basic XBox 360 to $199.

Nintendo, on the other hand, did not go head to head with Sony and Microsoft by matching technical specifications and processing power. Instead of movie playback capability and cutting-edge graphics, Nintendo focused on re-inventing the way people play video games by using an innovative controller. Because of this, the Wii appealed to a far broader range of consumers and has become a worldwide success. It has been outselling the PS3 and XBox360 combined, and is still in demand, even though it has almost been 2 years since its release. In fact, unlike its rivals, Nintendo has not had to lower the price of the Wii; it still retails at $250.

How does the PS3 affect the way Blu-Ray players are priced? Typically, when sales of a video game console are lagging behind its peers, one way to generate sales is to lower the price of the console in order to attract new buyers. Since the PS3 is the most expensive console available, it will only be a matter of time before Sony decides to lower the price of he PS3. The PS3 currently retails for $399, making it more expensive than current Blu-Ray players. However, if Sony were to lower the price of the PS3 and make it equal or close to the price of a Blu-Ray player, it would make consumers think twice about purchasing a dedicated Blu-Ray player. After all, for a few dollars more, consumers get not just a Blu-Ray player but a video game console as well. In this day and age where electronics are being consolidated (mp3 players + cellphones, etc) having one machine that does double duty makes sense.

Already, there are some rumors on the internet that the PS3 is set to come down in price to $299. It is only a matter of time before Sony announces a price cut. When that happens, expect dedicated Blu-Ray players to drop down in price.

The second major factor is the establishment of streaming video as a viable form of viewing large video files instantly. It started with music in the form of online radio stations as internet bandwidth and technology could only support so much data. But as consumers got access to higher internet speeds via DSL and Cable, companies such as YouTube capitalized on this new form of media distribution. Now, even major television networks offer current episodes of hit shows available for immediate viewing hours after airing on tv.

Even Netflix, whose primary business is DVD rentals by mail, has adjusted to this trend. Subscribers have the ability to watch select movies and television shows via the internet. They have recently come out with the "Roku", a device that enables consumers to watch streaming video straight onto the television rather than watching or routing it through their personal computers.

As internet speed increases, look for more and more streaming video in HD quality.

Why does this affect Blu-Ray? Again, the lower cost of entry into streaming video will be more enticing than purchasing a standalone Blu-Ray player. Renting or purchasing television shows and movies in digital format will most likely be cheaper than buying the equivalent Blu-Ray disc. A perfect example is MP3 download prices vs CD prices. This is exactly the reason why when Blu-Ray won over HD-DVD, analysts said that this wasn't the real 'war', that the real battle would be digital versus physical media.

Of course, there are other factors, such as manufacturers wanting to speed up the shift of consumers from DVD to Blu-Ray, the economic crisis slowing down demand for high priced electronic items, to name just two out of several more reasons. All the more reasons why, if you are looking into upgrading into Blu-Ray soon, waiting patiently might save you alot of money and regret.