Dixons hobbling DVD format?

Less than a month after Dixons was accused of overpricing, an online DVD retailer has accused the firm of stunting the developing DVD market with the same tactics.
Written by Tim Kelly, Contributor

DVDplus managing director Bryan Welsh believes Dixons is failing to give DVD the boost it needs by charging too much for titles: "The manufacturer and the retailer have a responsibility to stimulate the market and Dixons is not meeting that responsibility," he says.

This is not the first time Dixons has been accused of inflated pricing: at the US trade show Comdex last month, Dixons was stunned by an attack on its pricing by Intel CEO Craig Barrett who accused the firm of charging "ridiculous margins" for its PC equipment.

Jean-Luc Renaud, editor of UK newsletter, DVD Intelligence, agrees with Welsh saying the situation is unique to the UK with stores like Dixons, Virgin Megastores and HMV, the first to sell DVD, "scaring consumers" with inflated pricing.

Dixons however believes pricing has little to do with it, blaming the format's slow uptake on the continued strength of VHS. "The reason for the slow take up of DVD" says a company spokesman, "is that the quality of video in the UK is so good DVD is finding it hard to draw away customers." The spokesman adds that the Monopoly and Mergers Commission forbids Dixons from trading at the RRP and reminds customers of its ‘price matching policy'. "If you can find the same product locally, for less, within 7 days, we will refund you the difference", he says.

DVD has been no laggard however. Several DVD players have arrived in the UK this year and titles are steadily trickling in despite being more expensive than their video rivals. "We will probably see the price of DVD films drop considerably once there are more region 2 titles available," says Alan Macnaught, director of McNo Ltd, a dealer/distributor of video and CD formats. Macnaught agrees that inflated prices deter consumers but the real issue is shortage of god titles, making the format a premium choice.

Dixons is currently selling Jerry McGuire for £23.99 when the RRP is £19.99. DVDplus will be selling the same DVD for £18.99, £1 below the RRP, as of midnight Monday.

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