Sales of DVD players record robust growth amid fall in prices

Sudibyo M. Wiradji, The Jakarta Post, Jakarta

The sale of DVD players in the Indonesian electronics market recorded a significant increase over the past several months as the price of the devices dropped.

The entry of more affordable brands from emerging electronics producing countries has also contributed to the significant increase in DVD sales.

The Electronics Marketers Club (EMC) estimates that this year's sales of DVD players will increase by about 125 percent to 200,000 units from 90,000 units last year.

In addition to already established brands such as Sony, Philips, Sharp, Panasonic, Samsung, Pioneer, Aiwa and Toshiba, consumers can now easily find cheaper Chinese-made DVD players.

Chinese-made DVD players can sell for between Rp 400,000 (US$45) and Rp 500,000, while Samsung and Sharp offer their standard DVD players for between Rp 700,000 and Rp 800,000. Last year, the cheapest DVD player carried a price tag of above Rp 1 million.

The wide circulation of pirated DVD discs has also contributed to the significant increase in the sale of the players. Although the government has passed a copyright law to protect intellectual property rights, pirated DVD disks are still widely sold. A pirated DVD disc costs between Rp 10,000 and Rp 15,000, compared to an original which costs between Rp 300,000 and Rp 400,000.

"Compared to original VCD discs, a pirated DVD disc also has a much higher quality picture," said one electronics shop salesperson.

DVD, which stands for Digital Versatile Disc, is similar to a CD (Compact Disc) but it can hold much more data. Technologically speaking, a standard DVD holds about seven times more data than a CD. Commonly, a DVD player produces a much higher quality picture and resonance compared to VCD.

Unlike a VCD player, a DVD can be used to play both VCD and DVD discs. These are among the reasons why DVD players are preferred, even though one needs a TV with three output portals in order to get clearer pictures.

Players are now racing to take advantage of what they call the transitional period from VCD to DVD.

To seize market share during this fierce competition, several distributors of DVD players lowered prices earlier this year. PT Samsung Electronics Indonesia, the sole agent of Korea-based Samsung, offers its DVD E series players for Rp 700,000, down from Rp 1 million.

The company said its newly launched Samsung DVD E series were selling well because they had good features at a good price.

"Even though our products are targeted at the middle and upper income groups, we are aware that with the lingering economic crisis many people remain price sensitive. Therefore, we lowered our prices to win the hearts of more customers," said PT Samsung Electronics Indonesia's marketing manager Budi Pramono.

Like PT Samsung Electronics Indonesia, PT Sharp Yasonta Indonesia and PT LG Electronics Indonesia also saw an increase in demand for their DVD players after they lowered prices.

PT Sharp Yasonta sells its DVS1 type DVD players for Rp 800,000, down from Rp 1.5 million. "Price, quality and brand are among the reasons why consumers choose our DVD products," said PT Sharp Yasonta product manager Rudi Priambodo.

To deal with the competition, the company does not rely on one type of superior product but provides a variety of products tailored to the different needs and tastes of customers. "In this way, we can enjoy good sales," Rudi said.

To attract customers, the company also provides what is called a "home theater in box" for those wishing to set up a home theater. A home theater in a box consists of one DVD player, five speakers with an amplifier and subwoofer.

"With the ready-to-use home theater set, home entertainment enthusiasts do not have to bother buying speakers and a sound system anymore," he said, adding that the home theater in a box package had received a good response from audiophiles and videophiles.

Like other manufacturers, PT LG Electronics Indonesia, a new player in the DVD market in Indonesia, has also lowered its prices to enable it to compete in the market.

The LG DVD-DC7711 series is now sold for Rp 800,000, down from Rp 900,000. Other LG DVD players like the DK7942 go for between Rp 1.3 million and Rp 1.4 million.

"Our DVD DK7942 is among the thinnest machines in the world but it is equipped with karaoke equipment, a scanning program and Dolby digital recorder," said Hendra of the company.

However, some authorized dealers of foreign DVD brands, such as Sony, Aiwa and Bang & Olufsen, which generally aim at the upper market segment, are maintaining their old prices.

A sale executive at PT Sarana Elektrindo Utama, which sells equipment manufactured by Bang & Olufsen of Denmark, said that despite the entry of less expensive Chinese brands, the company saw a 35 percent increase in the sale of Bang & Olufsen DVD players this year from last year.

The price of a Bang & Olufsen DVD player is about S$2,100 per unit. "Based on a survey of our targeted customers, they prefer products that ensure high quality and good after-sale services, despite the high price," said Arief Hadianto, retail and brand manager of PT Sarana Elektrindo Utama.

PT Sony Indonesia acknowledges the market for DVD players is getting tighter, but it is optimistic its market share will not be affected thanks to the company's good after-sales service.

Prices for Sony DVD players range from Rp 1.1 million to Rp 4 million, depending on the model and series.