Analyst: Blu-ray prices will nosedive for the holidays

Blu-ray vendors will be forced to drop their prices so as to compete with standard DVD, unless they adopt differentiators such as Netflix movie downloads, new research suggests.

Holiday prices for Blu-ray drives could fall further into the $150-to-200 range, especially with new download alternatives available from Microsoft's Xbox 360 and the Roku Netflix player, according to a new report from ABI Research.

"Blu-ray vendors and dealers are starting to realize that for Blu-ray to become the next DVD, they need to lower player prices in order to generate interest and build volumes," said Steve Wilson, principal analyst at ABI, in a statement this week.

Wilson pointed out that tier-2 players and earlier models six to nine months old are already widely available for below $200, and that Amazon is selling a Samsung Blu-ray drive bundled with four disks in the same price range.

However, content download capabilities represent an opportunity as well as a threat for Blu-ray vendors, the analyst noted. LG announced in August that its BD 300 drive will support streaming video content from Netflix. Samsung has completed a similar deal with Netflix.

"The more the Blu-ray players adopt these download capabilities, the better they will be able to differentiate themselves from standard DVD players," according to the ABI analyst.

As previously reported in BetaNews, unit sales for Blu-ray drives look likely to be lower than expected for 2008, too. Kurt Scherf, principal analyst at Parks Associates, told BetaNews in late October that total sales for the year will decline at least 25% from the firm's original projections to about 2.2 million players in the US and 4.3 million worldwide.