To: Kent Kuo who wrote (36507 ) 10/5/1998 3:33:00 PM From: John Rieman Read Replies (3) | Respond to of 50808
Divx players drop prices to meet open DVD player prices.............207.240.177.145 Entertainment News Mid-Rollout, Divx Prices Fall $100 Steve Koenig Dallas 7:15 PM EDT, Fri., Sept. 25, 1998 In the midst of a national rollout, the going price of Divx-enabled DVD players is dropping by $100. Divx, which licenses the technology to RCA, Zenith and other manufacturers, cited declining street prices for competing DVD players as the reason for the price cut. "In reality, Divx can no longer afford a price premium over open-DVD players," explained Van Baker, director of consumer market research for Dataquest, San Jose, Calif. "In the beginning, Divx had exclusive distribution rights with some movie studios, which gave them somewhat of an edge. But now, those studios have also embraced DVD, and the Divx advantage has evaporated." A Divx spokesman said new players based on its technology will be released nationwide during the next two weeks. Only one Divx-enabled DVD player, the Zenith Inteq DVX2100, is currently available for purchase at retail. RCA is slated to ship a model in early October. A Circuit City store in San Francisco, one of the first markets to get Divx, has already lowered its price for the Zenith player to $399, down from $499. Interestingly enough, the same player is listed on Divx Web-site (www.divx.com) for the old $499 price. Baker noted that Divx is "far behind" DVD in terms of market longevity. Average street prices for DVD players have declined since their introduction in early 1997. Dataquest reports that early last year prices ranged from $499 to $1,500 for a DVD player. The current average street price for DVD players is about $399. One RCA model is selling for $329 at Wal-Mart. While prices for DVD players have decreased, unit sales for the players have increased. According to the Consumer Electronics Manufacturer's Association (CEMA), 34,000 DVD players were sold in January and 81,000 units were sold in August. CEMA also reported that year-to-date sales of DVD players are 458,200 units for period ending Sept. 11. Baker attributed the falling prices and accelerating sales of DVD players to greater confidence in DVD by vendors. "Enough time has elapsed that vendors are feeling confident that DVD is not some passing trend," Baker said. "They know with relative certainty that the [unit sales] volume will be there." In addition, Baker said, DVD vendors have also cut price to stimulate market demand. Nonetheless, vendors plan to introduce Divx-enabled DVD players this year. Divx said ProScan and Panasonic are expected to launch Divx players in the fourth quarter. Harman-Kardon, JVC and Pioneer will introduce Divx players in early 1999.