DVD players dropped below the $200 price point for the first time just prior to the Labor Day Weekend. This is the pricing level at which consumer resistance to the new electronic hardware format is expected to break down and sales increase dramatically, according to industry analysts.
Two of the nation's most dominant mass merchants featured the under-$200 DVD players on the covers of their circulars. In its Sunday, Aug. 29, ad, Best Buy, Minneapolis, had the lowest price, $199.92 for an unspecified model, "Our lowest advertised price DVD player ever." Under the cover headline of "Home Entertainment," Wal-Mart Stores, Bentonville, Ark., featured an Emerson unit for $199.96 in a circular distributed mid-week. Best Buy repeated the $199.92 offer in a flier distributed mid-week.
"We envision the penetration of DVD getting stronger and stronger as time goes on," said Emiel Petrone, chairman of the DVD Video Group, Los Angeles, and executive vice president of Philips Entertainment Group, Beverly Hills, Calif. "I've never seen numbers like this for a new technology and I've never seen promotions like this, where the industry is clamoring to get the message out to the consumer. So I think you'll see an unusually big fourth quarter this year for DVD for both the hardware industry and the content providers," he said.
The Best Buy circular cover also proclaimed "All DVD players on sale," including the Panasonic, Sony, Toshiba and RCA brands, and promoted the first-time release on DVD of "Titanic" Aug. 31 with a $16.99 price. Inside the circular, a Pioneer DVD player was advertised at $279.92, along with a promotional of five free DVD movies and 13 DVD rentals with the purchase of a DVD player (excluding certain models). The retailer also offered an "exclusive" $50 DVD software coupon book. DVD movies highlighted in the circular were "Rush Hour," "Ghostbusters" and "Blade Runner" for $19.99 each, and "There's Something About Mary" for $27.99.
The Wal-Mart circular gave DVD its most prominent emphasis yet. Inside, Wal-Mart also featured an RCA player with a price "rollback" to $249.96 from $279.96. Two software titles were promoted: "Titanic" at $24.95 and "Analyze This" at $19.95.
Other retailers, including a new North Olmsted, Ohio, Giant Eagle store visited by SN, priced entry-level DVD players at about $250. The Iggle Video department had about 225 DVD software units available for rental and 250 for sale. Signage with the $249.99 Toshiba player promised, "Buy now and get eight free DVDs and five free rentals." Prices were competitive with mass merchants; for example, "Analyze This" at $19.99, "Shakespeare in Love" at $24.99, and "She's All That" for $24.99. The supermarket retailer also rented DVD players at $8.99 for five days.
Aug. 29, Circuit City, Richmond, Va., advertised an RCA player for $249, and offered five free DVD movies with the purchase of select players. The five movies, part of a national promotion coordinated by the DVD Video Group, Los Angeles, are "Stargate," "Stepmom," "Six Days, Seven Nights," "Lost in Space" and "Lethal Weapon 4."
Circuit City advertised three other machines and eight other pieces of DVD software at a variety of price points. For example, the retailer featured an Arnold Schwarzenegger four-movie collection for $79.95, an Adam Sandler three-movie gift pack for $47.99, "Office Space" for $27.95, "The Best of the Christ Rock Show" for $12.99, "Analyze This" for $17.99, "Armageddon" for $21.99, "Star Trek: Insurrection" for $21.99, and "Just Cause" for $9.95. The higher priced hardware units were a Panasonic player for $299.99, a Proscan player for $349.99, and a Sony player for $499.99.
The same date, Kmart, Troy, Mich., featured an RCA player for $249.99, offering five free movies and 12 free rentals. The circular promoted the DVD release of "Titanic" with a $24.99 price point and also highlighted one title for $19.99, "Analyze This," and seven other titles priced at $24.99: "8MM," "A Bug's Life," "Mighty Joe Young," "Enemy of the State," "Armageddon," "Stepmom" and "Cruel Intentions."
Industry observers noted that the promoted titles for Labor Day included a smattering of titles appealing to children, family and female consumers, and not just action-oriented fare targeting the male early-adopter market, which characterized the early promotion of the DVD format.