Warner begins aggressive Blu-ray Disc pricing strategy

The home video arm of the studio will cut the prices it charges retailers to order its titles in the holiday quarter, which translates to significant savings for consumers.

With Blu-ray player prices likely to sink further in anticipation of the holiday buying season, and a weakening economy cutting down on consumer spending overall, Warner Home Video's decision to cut its wholesale prices for Blu-ray movie titles may make sense.

Home video revenues actually seem to be surviving the downturn so far. Data from Home Media Research indicates spending rose 1.6% to $10.77 billion in the first half of 2008 over the same period last year.

Analysts say that data from the last significant recession nearly 20 years ago, video sales and rentals essentially held their own while other segments saw revenues down. The answer may be simple: The reusable characteristic of a purchased movie makes it more economical compared to a one-time event.

Even though a recessionary environment may be playing a part in the price cuts, it is more likely a lot of the drop has to do with shrinking production costs, and wider distribution of Blu-ray. Having HD discs nearer to prices of DVDs will only help to grow the market.

The cheapest catalog titles would cost about $11 per disc to the retailer. Among those titles would be Clockwork Orange, Swordfish, The Fugitive, and The Aviator. Currently these titles average around $20 to $25 in stores.

With the discounts to retailers, prices would be likely to fall between $14 and $17. In most cases, this would be only slightly above what the standard DVDs cost presently.

Newer catalog titles such as 300, I Am Legend, and Ocean's 13 would also see some discounts, although not as significant. Whereas these titles generally fall between $24 and $30 now, the new prices should generally be less than $20.

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