Open DVD players would sell better, if only they were on the shelves. I was in a Bestbuy last weekend, all the Toshiba and Pioneer players were out of stock. Only one Magnavox w/ spatulizer, was left. They had just got in a new shipment of Samsung and Sony players.............................................
e-town.com
ARE DVD PLAYERS DWINDLING?
Shortage bad for Open DVD, good for Divx
by David J. Elrich
NEW YORK, December 17, 1998 -- Say it isn't so!
We've heard through the industry grapevine -- and seen anecdotal evidence -- that there may be a severe shortage of low-priced Open DVD players during the final holiday rush. While this is great for manufacturers who are selling players as fast as they can make them, an unwanted beneficiary -- according to some DVD fans -- may be the controversial Divx pay-to-play system. With few low-priced Open DVD players in stock, the next option for shoppers is a Divx player such as the RCA RC5230Z ($399 list). The entry-level machines that sell for around $300 -- such as the Pioneer DV-414, Toshiba SD2008, Panasonic DVD-A110 and their ilk -- are in mighty short supply.
E/Town learned Toshiba is in a sold-out situation with retailers. This means that what dealers have now is what they've got until the new models arrive early in 1999. They can't simply call up and ask for another 500 to satisfy demand. You'll still find the higher-priced SD3108, but the SD2008/SD2108 are disappearing fast. Shades of the videogame industry hitting the mainstream CE business.
Panasonic reported most of its models are and have been in tight supply, especially the popular A110 and portable PalmTheater. "Consumer demand has been strong and we have already seen some shortages at retail," Panasonic's Rusty Osterstock reported. "With all of the intense advertising by hardware and software companies and retailers, consumer awareness is growing rapidly and they are spending this holiday season on DVD players and more sophisticated home theater systems," said the assistant general manager of the DVD division.
Sony has been in a tight supply situation since day one of the DVD era. The company really doesn't play in the $300 range -- the DVP-S300 is its entry-level machine at $399 in stores. Yeah, we know you can get it for less on the internet but we're talking about classic "bricks and mortar" stores. "We're seeing spot shortages of the 300," said Mike Fidler, Sony's VP of DVD Marketing. All players are "moving rapidly through retail, which is a great situation to be in," he told E/Town. Higher-end Pioneers are still available but you won't see slash-and-burn pricing since demand is so strong. [Is this the first slowing down of the "CE death spiral" of self-defeating pricing that David has written of in the past? -- Ed.]
Fidler also noted that smart retailers could find entry-level players since there are 30 brands selling machines, but "the low-priced A110, Pioneer, and Toshiba players are in tight supply." He told E/Town that the much anticipated S7700 will be introduced at the January Consumer Electronics Show and available shortly afterwards. Fidler couldn't resist making a friendly suggestion to his retail friends: "DVD is still an enthusiast's market. They should be able to walk people up to better features." In other words, stop focusing on $299 players and sell machines with analog Dolby Digital outputs, the whole drill.
Another big impetus to the season's strong DVD sales is the internet where companies like Best Buy, Amazon, and Reel.com are selling DVD software online at deep discounts. That there are now 2000 titles certainly is another factor driving sales.
Who is inadvertently benefiting from this shortage of low-priced players? None other than Divx, the bete noir of so many Open DVD enthusiasts. Circuit City's marketing clout certainly doesn't hurt. As we reported earlier this week, Thomson told the press, sales of Divx players are "very strong." Circuit's huge Divx ad blitz is underway and it's driving people to its stores.
We can hear the sales pitch now. "We don't have the $299 Pioneer in stock, but you can take this RCA home with you today for just a bit more. We know you hate paying late fees on rental tapes. With Divx you don't have to get stuck ever again. It plays all types of DVDs -- and we'll even throw in five free movies." How strong will sales be when Toshiba et al crank up the assembly lines for the '99 Open DVD models? Only time will tell. But a word to the wise: if you want to buy a top-name low-priced DVD player for the family this holiday season, better grab it now.
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