Why such huge product line separation?

D

Daniel Moore

Member
I don't understand why companies like Sony and Panasonic have such huge separation in prices between their product lines. I realize that there will always be a market for people who want the best of the best, but it seems like with camcorders the differences in price are disproportionate to the difference in quality.

An example where the product separation is much smaller is computers. When a new processor comes out (Pentium Extreme Edition, Athlon FX/64), it is pretty much a cutting edge product. A moderate income person can pretty easily afford a computer with (at least close to) the performance of high-end servers and what-not.

I realize that there are many components to a camcorder, and each component falls within this exponential model of price/quality, and that the computer market is completely different than the camcorder market, but what I really want to say is, why can't this camcorder be cheaper so that I can buy it?
 
Daniel Moore said:
what I really want to say is, why can't this camcorder be cheaper so that I can buy it?
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Well, at least he's not concealing his true motives : )
That's much appreciated. Thanks, Daniel
 
Hey, as a tech geek, I really don't think I could make any money with this camcorder, but I would definately have fun playing with it...
...that is, if I didn't suffer remorse from taking out a loan to pay for it. :angry:

Ah well, I'll just stick with my Canon Optura 20
 
Supply, demand, R&D and components. Price usually has very little to with the manufacturing cost or the value of the product.
 
And filmmaking, in case you haven't noticed, is the most expensive art. Why do they get 100k for an aaton 35 camera? Because they can.
 
If everybody shot billy's birthday on an Aaton 35mm they would be $300. They are much less sophisticated than a digital video camera, but because there is such a small market for such high precision it necessitates a very high premium. Price of production reduces exponentialy when the market for a product increases. There may only be a thousand or so Varicams, Cinealtas and the like Vs. the 1,000,00+ DVXs.
 
Loading an A-Minima is not easier than popping a videotape in a DVX100.. You know this...
Actually, a "big wig" media consultant I know bought an A-Minima to film Christmas one year....

Big Mistake!!
 
Well in the car industry, the lower priced cars are sold at a a small profit and the expensive luxury cars sold at a loss. because there is littel difference in materials, a toyota corrola and a Lexus ls400 probably only have a 2,000 or 3,000 dollars difference in raw materials cost, leather, additional metal cause its bigger etc. the Research&Design is where the money goes. The cost of designing a new top of the line v8 engine, desgning the look of the new model, etc, all cost HUGE amounts of money. thats why luxury cars are updated more often and standard models change only ever 4or5 years. the comapny makes their money off the cheaper cars, especailly cause they have been usign the same engine and interior parts for many years. the R&D has been paid off already and now its jsut the cost of materials and manufacture.

same proabyl goes for Electronics. once the facotry is tooled, its cheap to produce. but the cost of R&D and tooling the factory is where price comes in. If panasonic is hypothetically only making 5,000 DVX100a's this year, the R&D cost of the DVX was probably tens of millions of dollars. but they know they arent going to sell that many dvx's, so they have to charge more for it, still at a "loss", and offset the loss with their lesser cheaper more profitable cameras. Cause they know they are gonna sel lots of them. and they can make and sell (hypotheticalyl) 100,000 of the $500 - 1,000 cameras. Especailly cause alot of the cheaper cameras use older technology, or parts that have been made in huge volume which is cheaper. like the car industry.

i bet the crappy panasonic VHStape rewinder that sells for 19.99 and hasnt changed in 10 years, is paying for the DVX, Varicam, HDX200 , plasma HDtV screens....... etc.

Oy i think i just vomited out Econ 101.......... in 2 paragraphs.
 
How prices are made

How prices are made

I remember a marketing team meeting of a film camera manufacturer I once was very familiar with. At the end of the presentation we were all asked, "how much can we charge for that camera?" So they were asking for how much a prospective customers would think it was worth for him. And the mathematical formula behind that is: price asked be competitor divided by own cost multiplied by necessary profit margin (just kiddin!).
In other words, Pana would sure not hesitate to charge 10, 15 or 20 K if there were no FX-1 or Z1. The question always is the highest possible price customers will be willing to pay for a product that gives a healthy profit margin regarding costs for production and R&D. Taking also into account that you won't sell a tenfold number of products at a price of 10 or 20% less.
Good marketing people have a sound feeling how much something can cost at maximum and how "cheap" it must sell to not be a "dead" product.
 
I think my problem is that I asked a question that I really know nothing about. In my mind it is just hard to imagine that there is really innovation that requires drastic amounts of R&D. I mean, lenses have been around for quite a while (including ones that can resolve HD resolutions), and the processors to handle HD should be getting cheaper by the minute. I'm sure there is research in the sense of what Pana should put in the camera, but isn't this basically just an HD DVX100?

Ultimately, we will have HD cameras in the 300-400 dollar price range just like we do with miniDV now, but I would personally have thought that the leap from analog to miniDV would have been a bigger R&D challenge than going to HD, therefore couldn't these cameras be introduced at more competitive prices? Over time, good things get cheaper, so I would expect such things as bigger CCDs to filter into consumer products. It may be my imagination, but I don't see that happening right now. (Maybe CMOS will be cheaper and provide the necessary kick-in-the-pants)

Unfortunately, I realize everything Pana/Sony/Canon/etc. do is in the interest of maximizing profits, so there isn't much we can do about it.... Ok, I'm done complaining now.

-Daniel
 
I think you have the wrong perspective here Daniel. Panasonic didn't just raise the cost of the new DVX from $3500 to $6000 or $10,000. It has lowered the price of it's $60,000 camera.

Ok, not exactly, but that is the context that most of us see it. HD was an untouchable realm for all but a few (and the R&D to get HD up and running is massive). The arrival of HD below $10,000 is a huge bargin to most of us, and a lot of us will have no problem turning a profit on the DVCPro 50 alone, HD is just gravy. Honestly, I think Panasonic could have squeezed another couple thousand out of us and not affected their sales for the first year one bit (don't tell Jan).

Basically, this is an EXTREMELY competative price (again, assuming the camera works as good in reality as it looks on paper) and consumer HD is going to be brought to you by HDV not low-compression HD. I will repeat what I posted on another thread, in 3 or so years you will see HDV at Best Buy (~$1500 would be my guess).

Lastly, don't forget the R&D of P2 technology as well as getting all the high-thoughtput electronics into a low cost camera. Not easy or cheap.
 
Previously the only camera to offer 1080-24P was $85,000 without a lens. That's a %93 price drop. Not bad if you ask me. As to weather the everyday enthusiast will own one? I would guess the doctors and lawyers will. It's the same group who keep Leica and Hasselblad in business. Scrimp and save. September's not far away.
 
Daniel Moore said:
I think my problem is that I asked a question that I really know nothing about. In my mind it is just hard to imagine that there is really innovation that requires drastic amounts of R&D.
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See this is the problem, people do not understand that there is tons of work to make this camera work. Every frame rate and format needs testing and analysis, from P2 and then if there is a downconvert to DVtape it has to be tested there as well. If you count them all up including the Variable frame rates there are 72 formats to R & D for time code, metadata and video/audio quality.


I mean, lenses have been around for quite a while (including ones that can resolve HD resolutions), and the processors to handle HD should be getting cheaper by the minute. I'm sure there is research in the sense of what Pana should put in the camera, but isn't this basically just an HD DVX100?
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If it were, it would be out by now, but no it is not. Go take a read of the white paper off of the HVX200 product page at www.panasonic.com/pbds. P2 changes things and the software to support those changes has to be designed and implemented. Yes there are other P2 cameras, but none of them do HD. Yes we do have other HD cameras but none of them do 1080/24P. This is a new chip set and there are just a lot of different tasks to be accomplished.

Ultimately, we will have HD cameras in the 300-400 dollar price range just like we do with miniDV now, but I would personally have thought that the leap from analog to miniDV would have been a bigger R&D challenge than going to HD, therefore couldn't these cameras be introduced at more competitive prices?
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In the 3-400 range I would expect that the HD will be a highly compressed H.264 on an SD memory card. Bringing DVCPRO HD to under $10,000 is very competitive, in fact so competitive, there is no competition.

Over time, good things get cheaper, so I would expect such things as bigger CCDs to filter into consumer products. It may be my imagination, but I don't see that happening right now. (Maybe CMOS will be cheaper and provide the necessary kick-in-the-pants)
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I don't see that larger CCDs will be getting cheap enough to make it to the consumer level, heck, they have to make it to the professional level. ;-)

Unfortunately, I realize everything Pana/Sony/Canon/etc. do is in the interest of maximizing profits, so there isn't much we can do about it.... Ok, I'm done complaining now.
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Well if it wasn't for profits, we would not have jobs. If we don't make the right product and people don't buy it then we really have a problem. Profit is not a bad word, it is why anyone does anything.

Hope that helps,

Jan
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Bringing DVCPRO HD to under $10,000 is very competitive, in fact so competitive, there is no competition.
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In all fairness though, isn't DVCPRO-HD a proprietary Panasonic format? I'm only aware of professional Sony and Panny cameras in HD - does JVC license either codec? I doesn't make sense that Sony would license when they've developed their own (professional) solution.

I don't see that larger CCDs will be getting cheap enough to make it to the consumer level, heck, they have to make it to the professional level.
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Physics and classical optics (I won't get into non-linear optics or superlens research) dictates that at some resolution limit, it is much cheaper to make a large format detector and a large format lens than a smaller one, as the components are larger, and the optics are easier since you're no where near diffraction and wavelength limits. 5 microns across a CCD pixel is pretty tiny, when you consider that the wavelength is a tenth of that. At some point it will be cost effective to make everything larger as opposed to smaller.

-Spiff
 
Spiff said:
In all fairness though, isn't DVCPRO-HD a proprietary Panasonic format? I'm only aware of professional Sony and Panny cameras in HD - does JVC license either codec? I doesn't make sense that Sony would license when they've developed their own (professional) solution.
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The point I was making is that there is no other HD product that is I frame only, 4:2:2, uncompressed audio available under $10,000. I would be as if Sony had put HDCam into a small camera. That would be the only real competitive product.


Best,

Jan
 
Thanks for the reply Jan, I think I am getting more of a grasp on the huge scope of this new camera the more I read. I'm a computer engineer major, and I should realize that nothing ever comes easy in the design/testing phase of anything...

Thanks,
Daniel Moore
 
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