TWiP #247 – Pricing Analysis of the Canon 5D Mark III
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Today we have a special treat for TWiP listeners. Frederick sat down for a special conversation with TWiP regular Derrick Story who shares his thoughts on pricing for the new Canon 5D Mark III.
Hosts: Frederick Van Johnson and Derrick Story
Episode Overview:
On this special episode of TWiP, Frederick recently had the chance to chat with Derrick Story from the Digital Story to get his thoughts on pricing for the new Canon 5 D Mark III.
The 5D Mark III was announced last month and started shipping late last week. This upgrade to the popular 5D Mark II features an improved AF system, better video controls, better low-light performance, dual card slots, and host of other improvements.
Before you rush out to add this latest camera body to your collection, we ask if it is worth the $1000 price increase? Derrick shares his thoughts on the matter with the TWiP audience and reveals what he thinks is behind the recent price increases from Canon.
Connect with Our Hosts & Guests:
Derrick Story: www.twitter.com/derrick_story or www.thedigitalstory.com or Google+
Frederick Van Johnson: www.mediabytes.com or www.twitter.com/frederickvan or Google+
Credits:
Pre-production by: Bruce Clarke
Post production by: Suzanne Llewellyn
Bandwidth provided by: Cachefly
Intro Music by Scott Cannizzaro
I have the original 5D. I was first priced at $3300. So it seems that $3500 for the first mk 3s isn’t as big a gouge as it may appear…
I paid $2,500 for my 5D brand new.
I had been shooting a 7D and wanted to upgrade to a full frame camera so I started looking in January. Upon hearing about the III coming out in March, I decided to wait and purchase the new camera. I couldn’t be happier. Rather than buy a four year old camera in the II, I decided for as long as I’m planning to keep it, it was worth the cost. Each person just has to do their own analysis as you say.
If I already had a 5D Mark II, I probably would not have upgraded to the III.
Great discussion though.
You hit the nail right on the head, Larry. It depends on what you need. All I’m talking about is feeling the need to automatically upgrade just because it’s the latest model.
Also, keep in mind, that the exchange rate for US dollars against the Yen has gone down recently. The 5D Mark II and the 5D Mark III were introduced at roughly the same price in Yen…
It’s gone down that much? Wow… How are the other camera manufacturers in Japan coping with that?
In the quarter 5D mark ii came out, $1 = ¥107; last quarter, $1 = ¥77. Funny it takes a 5d mark iii for me to realize the weaken dollar against yen.
I think the dollar vs yen is an important point, and I’m glad it has come up in this conversation. But even with the difference in conversion, there’s still a price increase on top of that. Plus, money is just plain tighter now than during the release of the Mark II. So if the Mark III launched at $3,000 or $3,100 in the US, we could say that the increase was basically the dollar vs yen, and that Canon is making an effort to keep this camera within reach of its audience. And you’re right, it is interesting that the 5D has led to this awareness.
regardless to the US and Yen exchange ratio, the relative increase in Mark III’s launching price is fiscally and emotionally “real” for average consumers (I don’t see my salary increase by that much). This really supports your point from the show — are there better ways to spend your money improve your photographic skills?
The glass half-full perspective will say, wow, the original 24-70mm F2.8L or the 135mm F2.0L are really good deals now…
Glass is good. And the 24-70mm 2.8 version 1 is a great deal right now. And I like your point about the “emotionally real price.” I know that’s a factor for me.
I’ve read that nikon up’ed the D800 price in the UK significantly.
But the other point made in the episode is also significant besides canon and Nikon there are no other full frame DSLR’s. Sony is not yet back in the full frame game. They were the price fighter with their pretty decent cam. Or is this market just not as profitable for them as we think it is?
Frederick,
In the 5D3 price discussion Derrick said no new tech was added and he even said radio flash controll was not added.
The 5D3 DID add wireless flash control INSIDE the body. There are videos on the Canon Professional Imaging UK site showing the 5D3 controlling groups of off camera 600EX-RT’s and NO transmitter on the hotshot. 1DX ANSI has this feature.
That has to be worth $200+ of the $100 increase and means one less thing to forget to bring or charge or break off the top of the camera.
Dave
Dave, you’re probably right about that. Although I think that it’s odd that Canon did not list that feature on the Features page of the 5D Mark III – https://www.usa.canon.com/cusa/professional/products/professional_cameras/digital_slr_cameras/eos_5d_mark_iii#Features
Woops!!! Re watching and reading the articles it looks like I was wrong. The 5D3 and 1DX do have additional features when controlling the 600EX from the camera LCD as apposed to needing to use the Flash LCD, but the 5D3 body doesn’t have the radio controll inside. That would have been an awesome feature to add. Maybe in the 5D4 in 2015!!!
Don’t forget the Yen exchange rate,especially after that strange sad year 2011 in Japan.
somewhere else someone posted yen price which i think is right:
Canon 5D Mark II intro price: 300,000 Yen
Canon 5D Mark III intro price: 270,000 Yen
Agree with you that 5D3 is over-priced. But I’m absolutely fine with that because it makes me less tempting to upgrade from 5D2. As well laugh at people who upgraded, no offense! XD
The marketing folks at Canon have simply decided to maximize
their revenue (as any successful business should do). By increasing the price
they will sell a smaller number of cameras but get more revenue because of the
increased price. In economics/business this is what is called moving up the demand curve.
For example if they sell 12,000 at $2,000 they bring in $24M. Selling 10,000 at
$3,500 they bring in $35M. They lose 2,000 potential buyers because of the price
increase but gain $13M in revenue. At
some point the increase will not be enough to compensate from the reduced
quantity sold – judging from the amount of buzz about this camera, we are not
even close to that yet. Yes we don’t like it but it’s a smart business
practice. Canon knows that they won’t lose a significant amount of buyers
because the 5DMkII is such a popular camera and brand loyalty in cameras is
almost purely emotional, bordering on the religious.
The other idea that I find interesting is the concept of
anyone “needing” this camera. Better autofocus and more low light capability
are not necessities as they can be easily compensated for through better
technique and/or supporting equipment (learn to focus manually, lighting). I cannot think of a single shot that I would
be able to get with this camera that I cannot get right now with my current
gear.
I think there are many more issues in pricing than the simple example you’ve outlined. Yen to $ conversion, setting an introductory price to set market expectations, positioning it relative to other models and makes, leaving room for discounted prices in the months to come, etc.
Consider prices of the models on either side of the 5d and you’ll see a massive gap on one side, that to the higher side of the 1d. In that products are usually priced relative to their features and not cost of manufacture, it’s only logical that the 5d be given a price bump. I don’t want to pay it of course, but that’s how the market really works. Just look at the iphone for another example of feature pricing.
You are correct in that there are more factors that influence the demand. Items like the currency conversion and price of competitor’s similar products are factors. The actual price of the product, however is usually the most significant factor in influencing demand. The Yen to $ conversion cannot be that significant of a factor because then the price of the MarkII and every other Japanese made camera would have risen similarly if this were the case.
Your idea about pricing according to features does not hold when we look at other cameras. For example the Sony SLT/SLRs would be priced much higher if this were true. Additionally if you apply this to automobiles it completely falls apart. A BMW does not have that many more features than a Honda, yet commands a much higher price. In this case the customer is paying a premium for the BMW name – there is a social value to the brand. It has very little to do with cost or features. The iPhone’s price is more heavily influenced by the subsidies of the service providers than its features. There are several Android phones that have comparable or even better features yet do not command the price that the iPhone does. Again, here, consumers willingly pay for the Apple brand.
Pricing is multifaceted. The bottom line is that the 5DMkIII is priced at $3500 because Canon believes its customers will pay that much for it. Judging from the interest online and the number of pros adopting the camera, Canon is right.
Hey Frederick & Derrick,
First things first, BIG fan of the show. Been listening for years – all the way back to the Scott B days. 🙂
I look forward to the show but I have to admit the takeaway from the show focusing on the 5D Mark III left me a bit frustrated. The bottom line – an entire show was dedicated to saying that a product was too expensive?
I think if the point of the program had been to make sure you don’t lose focus on your art by getting caught up in all of the new gear – I would have agreed 100%! But we were left with the impression that the 5D3 isn’t worth it – even though (if I can be blunt) neither of you have shot it yet – and you’d be better off getting more glass instead.
But I have a very different perspective on this camera. I’ve had it for a few days now and all I can say is wow! It’s simply fantastic. Period.
A little over 2 years ago, I made the hard decision to go for a 1D Mark IV. I gained a better build, amazing, quick AF, far better high ISO, dual cards, and a faster frame rate than the 5D Mark II I had been using.
The 5D Mark III has – at a FAR lower price – all of that. And it’s given me even better AF (the same found in the 1DX) and even better low light/high ISO than the 1D Mark IV! (I’ve been closely testing this the last few days.)
Martin Bailey and Scott Bourne have both – after shooting it – commented on what an excellent camera this is. Martin says the new AF – alone – is worth the upgrade. I agree. And again these are guys are coming from knowing and shooting the top of the line workhorses like the 1D4.
On the podcast Frederick asked “Why the $1000 shift in a negligibly different body?” There is nothing negligibly different about the 5D3 other than the slight MP increase – a welcome decision that resulted in a FAR cleaner ISO range than the 5D2 and the 1D4.
What is it Nikonians have been saying for years? “I’d rather have better megapixels, than more megapixels?” Now it’s negligible improvement? Sorry, it’s just not accurate.
Is the price increase dramatic over the 5D2? Yes. And I would always be happy to pay less for something. But with the yen being weak and initial prices likely being set so they have room to come down a bit later, I think this is understandable. Nikon just raise it’s prices on the D800/E and D4 as well placing the D800E right next to the 5D3.
It’s not a Canon/Nikon thing at all. Both make excellent cameras that help us turn our passion into art.
Again, love you guys. But since the entire show was done with without shooting the camera – I had to call foul on this one. 🙂
Hi Robert, I think you missed the point of the special episode. This wasn’t a regular TWiP podcast. It was something extra that Frederick and I wanted to do, like a special report. Our goal was to acknowledge that it’s OK not to automatically upgrade just because a new model comes out. I said repeatedly that I like the 5D Mark III. But right now, for that price tag, I’m going to wait and see what happens. For others who need its upgraded features, we said they should buy it. What’s foul about that?
I enjoyed this episode. I am also cheesed about the price. Frederick/Derrick have either of you contacted Canon directly and asked why they hiked up the price? Do either of you know a guy you knows a Canon guy to ask about the price hike? I have not gotten a reply.
P.S. Sad there was no pic of the week.
Here is my basic take on the 5D Mark III and 24-70mm f/2.8.
The 5D Mark II was originally rushed to market to protect market share because of Nikon’s low noise sensors. One example of this was the minor bugs they had to fix. So the price was kept a little on the low to protect the market share. New camera 5D Mark III comes out they raise price because they are less concerned about market share. The next Factor is the decreasing value of the dollar. This causing all Japanese products to cost more. Toyota is raising their prices for example. Next part of this is simple greed they what more profit.
Like Canon has done with the 24-70mm and raised the price Nikon did the same thing with the 70-200 f/2.8 VR II.
With the release of more and more camera bodies with extreme ISO capabilities, are image stabilized lenses becoming obsolete? Canon seems to think so. With the release of the new improved 5DIII, canon also introduced the new 24-70mm f/2.8L. To everyone’s surprise, the lens does not feature IS, but it does have a price increase of nearly $1000.
If ISO can be increased by two stops as they have promised, then you can increase your shutter speed significantly and eliminate the need for IS in most situations. In fact, image stabilization may slow down the new speedier autofocus systems, and a higher shutter speed eliminates handheld blur and motion blur that IS cannot.
Well, not to ‘everyone’s’ surprise. Canon said that adding IS to this lens would sacrifice lens sharpness and quality due to trade-offs required in the design. Also, at f2.8 you aren’t exactly crying for light as you would for the 24-105 f4.
You may be complaining about the price of the 5D Mark III or worse the 1Dx in the US, but spare a thought for us in Australia as the prices here are even harder to justify. Launch price in US USD$3499, should be around AUD$3299 in Australia, but launch price is AUD$3850-$4200. The 1Dx is even worse with US pricing USD$6700 and Australian pricing AUD$7800-$8200. Theres enough in it to get an airfare from Australia and pick them both up at B&H in New York and still save money. Don’t even mention the new flash at AUD$829! Canon Australia complains about losing sales to online stores, but this is the base reason – we are tired of being charged over the odds in the world market, particularly when our currency is strong at present. With such large price differences, buyers will continue to purchase online or off-shore from markets like Hong Kong.
OK so after listening to Fred and Derrick I thought as I’m going to Yellowstone and then Alaska in June that if I bought a 60D to compliment my 5D MKII I could turn my 70-300 into a 450 lens and hopefully get some wildlife shots. Then I did the calcs and the 60D will give me a 20% smaller image so it may not be such big advantage in which case maybe I should invest in more glass (100-400). And then I listened to the Chilvers theory on minimilist photography and maybe I should sell it all and use my G9!!
signed
confused in Perth Western Australia