Blu-Ray Disc Association sinks to new low with childish YouTube attack ads!

[Carl B]

Walmart sold them at a loss to move merchandise to make room for the A3 (that's why when BestBuy sold too many A2's they replaced them with new A3's).

Walmart brokered a massive lot of A2's from Toshiba for that very sale; this is widely acknowledged. Why else would such a minor player in the HD space have had such a huge inventory of these players available for a single day? I don't believe for a moment that it was Wal-Mart clearing inventory... but I do believe that it was Toshiba clearing inventory.

The promotion helped both out - for Toshiba it gave them a true national ad presence targeted directly at the average individual, and for Wal-Mart is bolstered their image as a credible source of technology purchasing; something they are very keen to build on of late.

But I think the fact that of nearly all the major B&M stores with web presences... that Wal-Mart is among the only store remaining with HD-A2's shows the scope of their HD-A2 order from Toshiba. And that order would not have come without significant discussion of price-breaks and cross-promotion deals; i.e. the massive sale we saw.

 

[Carl B]

Huge marketing campaign? I must have missed the TV blitz

I guess so!

I've seen it happen a lot with other electronics products, stores a few years ago were blowing out old projection big screen tvs for much less than half their MSRP.

But when that happens, it's the manufacturer green-lighting the sale of a model. Retail will only ever discount such items to a point; when you see a dramatic and instant decrease, it's normally an across the board EOL declaration from the manufacturer in conjunction with an associated behind-the-scenes price cut.

There's no mold for loss leader other than a product a store is willing to take a hit on to bring in a certain demographic of customers. Loss leaders come in all shapes and sizes and they don't need to be ipod popular to get people into the store. Less popular products may bring in less foot traffic and less sales, but they'll also incur less of a loss based on that.

The whole concept here though is that Best Buy, for example, gained *nothing* from the HD-A2 sale as a loss leader... so, by extension it must not have been. What they sold was every single one of their HD-A2s online in minutes. Where was the generated loss-led profits from that? Yet, if Toshiba green-lighted them... it all makes sense for them to do. Not to mention the whole 'replace with A3' thing I strongly believe to have gotten clearance from Toshiba as well. Anything else would be ridiculous on Best Buy's part; seriously, they would gain nothing.

 

[AlphaWolf]

The whole concept here though is that Best Buy, for example, gained *nothing* from the HD-A2 sale as a loss leader... so, by extension it must not have been. What they sold was every single one of their HD-A2s online in minutes. Where was the generated loss-led profits from that? Yet, if Toshiba green-lighted them... it all makes sense for them to do. Not to mention the whole 'replace with A3' thing I strongly believe to have gotten clearance from Toshiba as well. Anything else would be ridiculous on Best Buy's part; seriously, they would gain nothing.

Best Buy would have had to price match anyway as its their policy. By matching they actually save money. See my edit above. Why they chose to fill orders with A3 units I have no ideas, but I also seriously doubt that was any of toshiba's doing.

If Toshiba was going to slash prices why would they only do so at select retailers?

 

[willardjuice]

Walmart brokered a massive lot of A2's from Toshiba for that very sale; this is widely acknowledged

Then it shouldn't be too hard to find some proof then.

 

[patsu]

And?

When Walmart is sold out of their players, that's it. It doesn't really affect BestBuy and others subsequently.

 

[Carl B]

Why they chose to fill orders with A3 units I have no ideas, but I also seriously doubt that was any of toshiba's doing.

But why do you doubt it? I just don't understand what about the scenario would seem like something one could envision Toshiba saying "no" to.

If Toshiba was going to slash prices why would they only do so at select retailers?

Firstly, Sears has been a long-time HD DVD supporter of sorts... the truth is with their own Black Friday A3 sale and their regular decent stocking of HD DVD players in general, I think they are quite warm to Toshiba's format. Wal-Mart, well, obviously is a retailer that anyone would want on their side - and via the HD-A2 sale we can see that if nothing else Toshiba and Wal-Mart have had a significant volume transaction with one another.

As for Best Buy, though I don't consider it as natively aligned with HD DVD as the above retailers, it is nonetheless the quintessential electronics store; they must be appeased. Toshiba/MS also use them for a number of promotions obviously outside of the mainstream, such as the "2 free HD DVD additional" deals and the Heroes/360 deal recently. So, frankly I think if Best Buy asked for equivalent pricing to what Toshiba was giving Wal-Mart at the time, they would have received it.

And who knows, it could have been Toshiba proactively letting loose the hounds at Best Buy and Sears after the media hype of the Wal Mart sale had already been built up to a point where they knew excess demand would instantly dry up supplies at those retailers.

 

[AlphaWolf]

When Walmart is sold out of their players, that's it. It doesn't really affect BestBuy and others subsequently.

Well once the units are gone it doesn't affect them, but while the units are there they are compelled by their own advertising to match price (and even beat it by 10%). So they might as well match it and get people shopping their products rather than walmarts.

 

[patsu]

Well once the units are gone it doesn't affect them, but while the units are there they are compelled by their own advertising to match price (and even beat it by 10%). So they might as well match it and get people shopping their products rather than walmarts.

... or (also common) they will go to the vendor to complain first and ask for the same deal to allow them to give a matching discount.

 

[Carl B]

Well once the units are gone it doesn't affect them, but while the units are there they are compelled by their own advertising to match price (and even beat it by 10%). So they might as well match it and get people shopping their products rather than walmarts.

But the truth is, that deal was never eligible for price-matching to begin with, as Best Buy (and no retailer) price-matches door-busters... for obvious reasons.

From Best Buy's own site:

What if the competitor does not have the item in stock or has limited quantities of the product?

Sometimes a retailer will advertise a very low price for a product but have only limited quantities in stock. If the item is out of stock or the competitor has limited quantities of an item, it is not eligible for price matching. Likewise, if Best Buy has a product that is advertised as being limited in quantity it will not be eligible for price matching.

 

[AlphaWolf]

But why do you doubt it? I just don't understand what about the scenario would seem like something one could envision Toshiba saying "no" to.

huh? So they made up a plan with one retailer, and then when the plan got out they matched it with another retailer only they modified it to include A3 models should they run out of stock? That sounds ridiculous.

I don't doubt Toshiba recently discounted the A2, but I doubt they green lighted sales at $100.

Firstly, Sears has been a long-time HD DVD supporter of sorts... the truth is with their own Black Friday A3 sale and their regular decent stocking of HD DVD players in general, I think they are quite warm to Toshiba's format. Wal-Mart, well, obviously is a retailer that anyone would want on their side - and via the HD-A2 sale we can see that if nothing else Toshiba and Wal-Mart have had a significant volume transaction with one another.

As for Best Buy, though I don't consider it as natively aligned with HD DVD as the above retailers, it is nonetheless the quintessential electronics store; they must be appeased. Toshiba/MS also use them for a number of promotions obviously outside of the mainstream, such as the "2 free HD DVD additional" deals and the Heroes/360 deal recently. So, frankly I think if Best Buy asked for equivalent pricing to what Toshiba was giving Wal-Mart at the time, they would have received it.

A conspiracy theory now? good god, all of these companies give pretty much equal space to both formats. You're just being ridiculous.

And who knows, frankly it could have been Toshiba proactively letting loose the hounds at Best Buy and Sears after the media hype of the Wal Mart sale had already been built up to a point where they knew excess demand would instantly dry up supplies at those retailers.

Ya or it could be as simple as walmart choosing to clear out stock for new models and a couple of other retailers matching it. Wow that's just crazy enough to be true!

 

[Carl B]

huh? So they made up a plan with one retailer, and then when the plan got out they matched it with another retailer only they modified it to include A3 models should they run out of stock? That sounds ridiculous.

What sounds ridiculous to me is that it seems inconceivable to you that Toshiba could possibly do such a thing to move HD DVD players. Was that weekend's sale not generally credited with moving ~100,000 units? And Toshiba had no role in your mind? Then truly you must believe that Toshiba is totally inept in its retailer relations.

I don't doubt Toshiba recently discounted the A2, but I doubt they green lighted sales at $100.

Is your doubt as great as my certainty, that is the question!

A conspiracy theory now? good god, all of these companies give pretty much equal space to both formats. You're just being ridiculous.

I wasn't speaking about space though, and honestly my comments stand. If there's a specific point you disagree with, point it out. I'm hardly one for conspiracy theories, and don't think I presented one above. Manufacturers though *do* target their favors on the retailers they feel will give them the most return at retail, I think that much is just common sense.

Ya or it could be as simple as walmart choosing to clear out stock for new models and a couple of other retailers matching it. Wow that's just crazy enough to be true!

If it was Wal-Mart wanting to clear out stock, then why in the world did they order so many beforehand to begin with? And if they wanted to clear out stock, then why in the world didn't they just get it done that day? Indeed, they're the only major B&M store that still has them available... and they certainly could have sold more that day if they had chosen to.

Doesn't sound like they cleared out the stock to me; sounds instead like a massive sweetheart deal with Toshiba so that they could clear out their stock.

BTW, Wal-Mart just had a massive Blu-ray promotion featuring the PS3 this past Saturday - 80GB unit with 10 free movies in-store (in addition to the 5 via mail), with extra BD's shipped in to stores special to the occasion. Now... are people here going to assert that this was again all Wal-Mart, or now that it's about BD are folk maybe going to start saying Sony had a role?

 

[AlphaWolf]

I wasn't speaking about space though, and honestly my comments stand. If there's a specific point you disagree with, point it out. I'm hardly one for conspiracy theories, and don't think I presented one above. Manufacturers though *do* target their favors on the retailers they feel will give them the most return at retail, I think that much is just common sense.

If walmart wanted blu-ray or HD DVD dead, dead it would be. All they would have to do is remove the media from the shelves and 25% of the sales would be gone. The format would be as finished as dreamcast was when EA took a pass. Sony or Toshiba might get pissed off but its hardly like that matters to them, they really have little choice in the matter.

If wal-mart is so toshiba friendly I find it odd that they carry very few of their products. I don't think they sell any of their TV's or DVD players.

 

[Carl B]

If walmart wanted blu-ray or HD DVD dead, dead it would be. All they would have to do is remove the media from the shelves and 25% of the sales would be gone. The format would be as finished as dreamcast was when EA took a pass. Sony or Toshiba might get pissed off but its hardly like that matters to them, they really have little choice in the matter.

Wal-Mart contributes an *extremely* small amount of the high-def media sales at this point, just want to point that out. They essentially have no power at this point in terms of the format war, save for their mass reach further down the line. The HD-A2 sale we're discussing had a massive effect and was a huge show of force, but it was not reflective of Wal-Mart's normal presence. For example, at present the HD-A2 retails for $249 on their website.

Best Buy contributes the most to HD sales at the moment, it's worth mentioning.

If wal-mart is so toshiba friendly I find it odd that they carry very few of their products. I don't think they sell any of their TV's or DVD players.

I didn't say they were Toshiba friendly, I said they were HD DVD friendly. But everything with Wal-Mart is a temporary state of being; all contracts are negotiated case-by-case, and they need to like what they see on the price side to go ahead. And in this case if I had to guess between Wal-Mart initially having approached Toshiba about the HD-A2, or Toshiba having approached Wal-Mart, I would put my money on the later.

***********************************************

In fact, further to the $249 HD-A2/Wal-Mart point I highlighted above, it's worth mentioning that at this time in the majority of B&M retail the least expensive HD DVD option is the A3 at $299, with BD only a $100 increment more with both the Sony S300 and the Samsung P1400 available for $399.

 

[AlphaWolf]

Wal-Mart contributes an *extremely* small amount of the high-def media sales at this point, just want to point that out. They essentially have no power at this point in terms of the format war, save for their mass reach further down the line. The HD-A2 sale we're discussing had a massive effect and was a huge show of force, but it was not reflective of Wal-Mart's normal presence. For example, at present the HD-A2 retails for $249 on their website.

Best Buy contributes the most to HD sales at the moment, it's worth mentioning.

Got some numbers to back that up? And when you say extremely small I don't want to see you coming back with 10%+.

I mean actual sales of HD media at this point are ridiculously small in any event (I really don't think they've overtaken the 5 disc mail in offer yet in retail)so its quite possible that Wal-mart isn't moving a lot of the media at this point. In any event the fact is that if a format wants to succeed Wal-mart will have to carry it.

I didn't say they were Toshiba friendly, I said they were HD DVD friendly. But everything with Wal-Mart is a temporary state of being; all contracts are negotiated case-by-case, and they need to like what they see on the price side to go ahead.

What are you basing that on? Just this one time sale?

And in this case if I had to guess between Wal-Mart initially having approached Toshiba about the HD-A2, or Toshiba having approached Wal-Mart, I would put my money on the later.

I'll take door number 3.

 

[Carl B]

Got some numbers to back that up? And when you say extremely small I don't want to see you coming back with 10%+.

I'd guess Wal-Mart at under 10% to be honest.

I think Best Buy and Amazon, perhaps Circuit City, are the clear leaders. You don't generally buy your media somewhere where you wouldn't go to buy the player itself, and Wal-Mart finds itself exactly in that role - outside of one-time mega events of course. There have been figures given as to the estimated breakdown before... but it's lost to the density of the threads in which it was given IMO. But you can scrounge around AVS in the Nielsen thread reading Grubert's posts... if you can afford to take the several hours out of your day to do so, within that archive will lie the best guess estimates at this time.

What are you basing that on? Just this one time sale?

I'm basing it on my knowledge of the company, which comes from case studies read, various reports viewed...CNBC even ran a special insider feature on Wal-Mart a couple of years ago. That special alone would open anyone's eyes as to their methods when negotiating large blocks of goods. Their buyers are essentially gods in the world of retail, and you don't tell them a price, they tell you.

 

[AlphaWolf]

I'd guess Wal-Mart at under 10% to be honest.

I think Best Buy and Amazon, perhaps Circuit City, are the clear leaders. You don't generally buy your media somewhere where you wouldn't go to buy the player itself, and Wal-Mart finds itself exactly in that role - outside of one-time mega events of course. There have been figures given as to the estimated breakdown before... but it's lost to the density of the threads in which it was given IMO. But you can scrounge around AVS in the Nielsen thread reading Grubert's posts... if you can afford to take the several hours out of your day to do so, within that archive will lie the best guess estimates at this time.

Honestly looking at week to week numbers is a joke they jump around so much. If you don't have any to LTD numbers I'll just take that as meaning you don't know.

I'm basing it on my knowledge of the company, which comes from case studies read, various reports viewed...CNBC even ran a special insider feature on Wal-Mart a couple of years ago. That special alone would open anyone's eyes as to their methods when negotiating large blocks of goods. Their buyers are essentially gods in the world of retail, and you don't tell them a price, they tell you.

heh... I know how they operate. In no way does that really explain to me how they are favoring HD DVD. I think this again is more of you making assumptions than anything.

 

[Carl B]

Honestly looking at week to week numbers is a joke they jump around so much. If you don't have any to LTD numbers I'll just take that as meaning you don't know.

What I do know is that they contribute a low volume of sales. You're the one that was claiming 25% if you remember, so not sure what you've achieved by stating the obvious point that I don't have an exact figure. Yet which of us is closer to the truth? This can be surmised without having the raw data, in my humble opinion.

heh... I know how they operate. In no way does that really explain to me how they are favoring HD DVD. I think this again is more of you making assumptions than anything.

An error then in how I originally phrased the paragraph you have a problem with, but I explained it explicitly elsewhere; the HD-A2 promotion served a mutual need for both companies. You think that Toshiba was not involved. I think otherwise.

 

[willardjuice]

But the truth is, that deal was never eligible for price-matching to begin with, as Best Buy (and no retailer) price-matches door-busters... for obvious reasons.

From Best Buy's own site:

Then why did my local BestBuy price match the HD-A2 at $98 for me on that Friday?

 

[Carl B]

Because the employees don't know what they're doing - no rare occurence. It would be disingenuous of you to say otherwise, and I've seen entire threads dedicated to the act of taking advantage of retail and squeezing every last penny you can before on AVS. Indeed, people feel indignant when they don't get the same deal some other person got - even though that original person was never truly entitled to it to begin with! I'm not sure what the breaking of the rule has to do with your effort to disprove the rule itself.

It is their policy. Do companies price-match each others Black Friday deals? Same thing here.

 

[Ty]

Why are we arguing if it was Toshiba OR Walmart? Couldn't it be both? Toshiba needed to clear out a large amount of old inventory and Walmart was there to buy it up?

I bought one of the ~98 HD-DVD players incidentally.