A Matter of Price

Jul 22, 2010

In the past month or so, some customers have noticed a little change in the way we’re pricing new DVD releases, and they can’t seem to figure out whether to cheer or complain. We’ve been charging $10 less for fully loaded DVDs than we used to, dropping our suggested retail price for most new special editions from $39.95 to $29.95. So what’s the problem? Well, back when we started issuing Blu-rays, we promised that we’d price them the same way we’d been pricing DVDs, not make them more expensive, even though Blu-ray authoring and manufacturing costs were then and are still much higher than those costs ever were for DVD. Our goal was to take price out of the equation for buyers considering which edition to pick up, and up to now, that’s what we’ve done. Recently, some costs associated with producing finished DVDs have fallen dramatically, and we wanted to pass that savings on to our DVD customers. Should our pledge not to jack up the price of Blu-ray have prevented us from offering better pricing on DVD when the economics permitted it? We decided it shouldn’t, but some Blu-ray customers were understandably distressed when they saw the two formats priced differently. What do you think?