HD-DVD and the Early Adopter Premium
Date : 2008 03 08 Category : Technology
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Hodejo1 writes "The early adopter premium is the difference between the cost of buying the latest greatest techno-toy today and the cost of buying an equal or better unit a couple of years later for much less. That Blu-ray unit you buy today for $300 will cost $80 two years from now. The premium is the $220 you pay to get the starter Blu-ray unit now as opposed to waiting. The same applied for HD-DVD until the axe finally fell and this is where it gets interesting. MP3 Newswire has been tracking post-mortem HD-DVD sales on eBay and surprisingly found that there are many takers. And why are people flocking to buy this decade's Betamax? Simple, they did the math. The demise of HD-DVD format creates "an option where the consumer can get his high-def player NOW without paying the $220 early adopter premium. That savings pays for the player and more. New sealed boxes of the Toshiba HD-A3, which shipped last fall for $300, are now drawing on average about $75 on eBay, where plummeting HD-DVD movie prices are averaging between $6 and $10. "Take a consumer with a 42" plasma set who needs to replace a broken standard definition DVD player. He can a) replace it with another standard definition DVD for about $60. b) He can buy a Blu-Ray player for between $300-$1000. c) He can buy an HD-DVD unit for under $80 and then buy ten $10 or sixteen $6 HD-DVD videos for a total of $180". What really drives this is Blu-ray's skimpy catalog, which will take a couple of years to pump up. Rather than blow the $220 on the early adopter premium just to have access to a limited number of movies the post mortem HD-DVD buyers can enjoy cheap Hi-Def players, cheap Hi-Def videos, and pay less. These users can shift to Blu-ray when players are less expensive and the catalog is robust. Actually, the early adopter premium is more like $320. With the win, Blu-ray manufacturers have raised prices."
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