Jiangsu krUTDDVD Market Shrinks by Nearly 70% in Four Years: Future Focus on Low-end Market

In recent years, the market has shrunk severely, and the Blu-ray technology has little effect in saving the market. Industry insiders said that focusing on the low-end market would be its future way out. The DVD, which was once owned by every household, is now gradually declining. Recently, when visiting some home appliance malls in Zhongshan, it was found that with the emergence of multimedia multifunctional products such as Internet TV, 3G, etc., the sales of DVD players have become more and more shrinking. Faced with the bleak situation of the DVD market, manufacturers and sellers are helpless. However, some industry insiders said that DVD will not become the next "vinyl record player" and turn into a niche collectible. The low-end market will be an important space for future DVD manufacturers to explore opportunities.

Text by Feng Jie, Chen ?, Huang Tinghui; Photos by Yu Tao

The market has shrunk nearly 70% in four years

Feng Jie saw in some home appliance malls and audio-visual product sales counters in the city that there were only a few joint venture brands and domestic famous brands operating before, and the styles were not many either. The price of ordinary DVD players is not high, most of them are between 200 to 500 yuan, and even portable DVD players are only 700 yuan. Even so, compared with popular products like LCD TVs in the mall, there are still not many people who stop to ask about prices. Some salespeople said that fewer and fewer people are buying DVDs now.

"Before, a single brand could sell hundreds of DVD players in Shenyang during an event, but this situation no longer exists." Miss Zhang, the person in charge of the black electrical department at Suning Appliances, confirmed to Feng Jie that the sales volume of DVD players had been declining in recent years, and the situation this year is not optimistic either. Since 2008, the DVD player market has started to shrink, and last year, the total sales of DVDs at Suning in Zhongshan was less than 40% of the total in 2006, showing a significant contraction in Jiangsu.

Miss Zhang said that the rapid shrinkage of the DVD market is inseparable from the rapid development of the Internet and multimedia. "The decline of the DVD market is consistent with the pace of the arrival of the high-speed Internet and multimedia era."

Feng Jie learned that under the circumstances of gradually shrinking sales, many domestic manufacturers have also reduced production. Manufacturers originally focused on producing DVDs have switched to producing digital products. Miss Zhang believed that besides being impacted by the Internet, etc., the decline of the DVD market has more diverse reasons, one of which is still related to the fact that domestic manufacturers do not master core technologies. "In terms of DVD production and sales, most domestic enterprises do not possess core technologies. In the previous battle between Blu-ray and HD DVD, domestic manufacturers had no say. Now that the Blu-ray camp has won, domestic manufacturers can only continue to buy others' technologies when facing product upgrades. Under the fierce competition of market prices, the inability to reduce production costs is also one of the reasons for the gradual decline of the DVD market."

Blu-ray saving the market is impractical

Feng Jie learned that after several years of continuous competition, Blu-ray technology achieved a monopolistic victory in the DVD market. Currently, the only high-end priced machines available on the market are mainly based on the concept of Blu-ray. However, Blu-ray DVD players cannot justify their high prices. On the market in Zhongshan, the lowest-priced Blu-ray DVD player is less than 1500 yuan, and Blu-ray DVD players costing two or three thousand yuan are considered "astronomically priced." For this, market analysts believe that it is somewhat unrealistic for the DVD market to rely on Blu-ray to save the market.

"There are too many choices in the market. If Blu-ray goes the high-end route, it's undoubtedly a dead end, so Blu-ray must go the low-price route." Miss Zhang analyzed: "In the high-end market, technologies like Internet TV are also becoming increasingly mature, and there are many substitutable products. It is relatively difficult to find true Blu-ray discs on the market currently, and the prices are relatively high. In the situation where cracking down on piracy domestically has not shown significant results, if Blu-ray DVD players take the high-price route, they will eventually lose the entire market."

Will the future focus on the low-end market?

Mr. Lei, the Zhongshan sales agent for步步高, told Feng Jie that despite the severe impact on the DVD market in recent years, we still have confidence that DVD will not exit the historical stage.

"DVD will not completely disappear, but the groups targeted for promotion will definitely be different. We still see potential demand for DVDs in remote areas and among low-income groups," Mr. Lei said. Low-income groups have relatively high mobility between cities, while digital TV, the Internet, 3G, etc., require large one-time investments and need to sign fixed contracts for a relatively long time. In contrast, DVDs are not expensive and are convenient for mobility. Therefore, for those who work outside all year round or live in areas where information networks are not well developed, there will still be sufficient demand for quite a long time.