Re: Profits

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ectobuilder

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Re: Profits

I've been thinking about this ever since the NEX-FS100 was dropped in price by a whopping $1000 on pre-order launch day.

What kind of margins are we talking about here? What other item on the market other than real estate or a car can a company drop the MSRP by $1000?????

And to think we were all about to pay $1000 more! That's $1000 of air!

And to think that these products don't even cover the full spectrum of basic needs (i.e. no HD-SDI, no ND-Filters...etc).

I almost think that we are being had as higher-order consumers (we are more willing to pay more) as the industry is taking advantage of our willingness by offering products that partially give us the solution that we need, thus forcing us to upgrade down the road.

What do you guys think?
 
Well I can only speak for myself, but I knew the MSRP was way higher than the camera would cost. I don't typically buy a lot of things that are in the $5k range myself, but when I bought my car, I DEFINITELY got it a lot cheaper than the MSRP. I'd say, look at it from the other perspective. They announce a higher price to start with, then come in lower on launch. People are excited to see it cheaper and it changes their minds. Maybe there was some technology involved that became cheaper. Maybe they want a larger market share and to get closer to the competition. I'd MUCH rather go this way then a company that announces a lower price, then begins raising it.
 
ectobuilder said:
I've been thinking about this ever since the NEX-FS100 was dropped in price by a whopping $1000 on pre-order launch day.

What kind of margins are we talking about here? What other item on the market other than real estate or a car can a company drop the MSRP by $1000?????

And to think we were all about to pay $1000 more! That's $1000 of air!

And to think that these products don't even cover the full spectrum of basic needs (i.e. no HD-SDI, no ND-Filters...etc).

I almost think that we are being had as higher-order consumers (we are more willing to pay more) as the industry is taking advantage of our willingness by offering products that partially give us the solution that we need, thus forcing us to upgrade down the road.

What do you guys think?
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If you've been following Sony for any length of time, they traditionally quote a higher price than intended when they make their first public announcements. Been doing that for years. Almost no one was surprised by the price drop.
 
Are you kidding? They are taking advantage of us because they dropped prices?

You want gouging? How about if they had charged MSRP for the first four months, THEN dropped prices. That would actually be a bummer.

All they are doing is trying to make people feel like they are getting a deal, just like any bargainer in a flea market anywhere.
 
I wonder what the € Price will be... I bet at least 6000 € without Kit Lens despite 1,43 $/€ exchange rate...
 
Five years ago this class of camera didn't exist. You wanted the 35mm film look? Get 35mm film... or fork out a small fortune for a high end 2/3 camera like the F900. That we now can get something with DoF and resolution rivaling film for ~$5k + lens is amazing. I'm not complaining that the street price is $1k less than the pre-release MSRP.
 
zeke said:
If you've been following Sony for any length of time, they traditionally quote a higher price than intended when they make their first public announcements. Been doing that for years. Almost no one was surprised by the price drop.
Click to expand...

Or the prosumer video camera market as a whole. $5,000.00, give or take $1500.00 is kind of a sweet spot in the market where some very innovative, prosumer niche, flag ship cameras kind of hit the market. It has been that way for quite a while actually. I have a FS100 on pre-order and it is just about the same price that I paid for a Canon XL-1 back in 1998(ish). I am sure that Canon made a good bit of money on that purchase back then, and that Sony is going to make a good bit of money when I get my FS-100. Are they ripping me off? No. It is a price I am willing to pay for the benefits that the cameras offer me, and the camera manufactures are willing to invest millions and millions of dollars in research and design to offer the cameras at a price where they get the return on investment that they seek, and that is workable in a highly competitive market. Welcome to the game!
 
Maybe they thought no one was going to pay $6500 for 1080p60 since that's about what Red plans to charge for 3072p120...
 
Who gives a rat's patootie what their margin is on the camera?

I want them to make OBSCENE amounts of money on the camera, and then spend it all, after the saki party, on R&D for the Sony F4.
 
If you you think the price is too high, don't buy it.
At 6K I would not buy an FS100.
At 5K I would.

I don't know, maybe I am stupid for "giving" Sony my money but for as long as I can remember there was always MSRP and Street Price in photography.

Based on downloaded footage and reviews and form factor and the fact that I can use lenses I already own and the SONY name [I have yet to own a bad Sony product] I think the price is right for me at this time for my budget.
 
mcgeedigital said:
Who gives a rat's patootie what their margin is on the camera?

I want them to make OBSCENE amounts of money on the camera, and then spend it all, after the saki party, on R&D for the Sony F4.
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haha, exactly! I like the way you think, make a great camera and reap the rewards. Nothing at all wrong about that. I am guessing most working professionals agree.
 
My point is that this is an indication of how HIGH margins are in this industry. The ONLY reason why they dropped their price is because of the lukewarm reviews it got for it's wonky physical design compared to the AF100 and the fact that the RED Scarlet was coming in at $6K with everything included.

I don't think a corporation drops the prices for the sake of doing so, they normally are reacting to competition. So my point is that had it not been for the competition, Sony would have absolutely taken advantage of reaping in $1000 more profit from us.
 
David G. Smith said:
Or the prosumer video camera market as a whole. $5,000.00, give or take $1500.00 is kind of a sweet spot in the market where some very innovative, prosumer niche, flag ship cameras kind of hit the market. It has been that way for quite a while actually. I have a FS100 on pre-order and it is just about the same price that I paid for a Canon XL-1 back in 1998(ish). I am sure that Canon made a good bit of money on that purchase back then, and that Sony is going to make a good bit of money when I get my FS-100. Are they ripping me off? No. It is a price I am willing to pay for the benefits that the cameras offer me, and the camera manufactures are willing to invest millions and millions of dollars in research and design to offer the cameras at a price where they get the return on investment that they seek, and that is workable in a highly competitive market. Welcome to the game!
Click to expand...

I totally get what you are saying, the fact that this is a business investment rather than for pure consumption is why we are willing to pay the dollars for it. My point is we are not exercising enough market force to lower the MSRP of these products.

I've worked in the consumer electronics business for many years now and the end-consumers do a very good job in accelerating the downward trend of MSRP's of electronics. Take LCD TV's for instance, 3 years ago a 46" 1080p was $3000, now they can be had as low as $650. However I see that the same isn't true within the professional audio/video segment.

Margins on consumer electronics used to be 30% (on average). It tanked to as low as 5% last year, basically consumers were getting electronics last year for the bulk price equivalent of 3 years ago. We used to make $4000 on a $8000 TV at the upper end of the profit scale. But now good luck making that much as consumers have done their due diligence to keep our industry honest with them.

FYI: Margins on audio tend to be between 50% to 70%. Imagine as an audio professional if you could get the industry to reduce it's MSRP to more reasonable levels. If you average out most business models that provide products (not services) it would be hard to find a model that have gross margins higher than 25% on the retail side. So the audio industry have sneaked past our consumer eyes to become king of the margin hill.
 
Profit margins in the fashion world and jewelry business are pretty high... Real, pretty, very high.



I understand what you are saying but what is you want us do?
Not buy an FS100 and hope that Sony will drop the price more?

I willing bet that everyone here knows that we are paying more than cost for this camera but I'm just wondering what it is YOU think we should do?
What do you think is a fair market price?


Sony has already met my “I will pay that” price.
Will I be happy if they came down even more in price? Heck ya!
Will I wait [how long?] for the price to drop more? I plan on a July or August purchase date, so I'll see.



As far as the AF100 goes.
It has more features for sure. And a lower base price.
It does not have an S35 or lower noise or better low light.
I hate noise......

When is Red coming out with their 6k everything killer camera?
 
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Do you have any idea what the volume difference is between the professional and consumer segments? They are multiple orders of magnitude different. Huge amounts of R&D dollars are needed to develop these things, so when they sell 5 million of them, they cost less than when they sell 50K. That's called a supply curve, and it's combined with a learning curve:

http://en.wikipedia.org/wiki/Supply_and_demand
 
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