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BD disc sales could hit 100m this year, but future uncertain

While UK research firm Futuresource predicts that consumers are on target to buy in excess of 100 million Blu-ray discs across the USA, Western Europe and Japan this year, sales are still well below where film studios would like them to be, according to The Digital Entertainment Group.

“In the USA, BD has moved from early adopter phase through to early majority, with the format gaining real traction in the marketplace,” says Mai Hoang, Senior Market Analyst at Futuresource Consulting. “Last year in the US alone, BD video retail sales increased by a whopping 320% to 24 million units; and we’re going to see momentum continuing in 2009, with over 80 million disc sales forecast.”

Although the uptake of BD in Western Europe is still at the early adopter stage, it continues to gather momentum. Consumer video retail sales reached nine million units last year, and further healthy growth is expected in 2009.

“The UK is the largest market for BD in Western Europe,” says Hoang. “With sales of more than 3.5 million units in 2008, it represented over 40% of the West European total. Factor in Sky’s high profile approach to marketing its HD service, and to a lesser extent the BBC/ITV joint venture, Freesat, and the cumulative effect has made a substantial impact upon the marketplace.”

“Although 36 million Blu-ray video discs were sold worldwide last year, more than 200 million were manufactured,” says Michael Boreham, Senior Consultant at Futuresource. “A portion of the remaining discs can be accounted for by multi-disc titles and promo campaigns - covermounts are already starting to emerge and we’re projecting much more activity over the next few years. However, the majority is ‘pipeline fill’, where product is placed into the supply chain in readiness for the growth in hardware sales, and to enable the retailers to build their in-store displays.

“BD disc sales continue to expand into all major markets and genres,” says Jim Bottoms, Managing Director at Futuresource. “For some high profile titles, close to 25% of all disc sales have been on BD, while other action adventure titles consistently see BD accounting for over 15% of total sales.

“With more than 1100 BD titles to choose from, combined with growing retail support and increased promotional activity, the rise of Blu-ray will offset rapidly declining sales of standard DVD product. By 2012, around 50% of US and 35% of Western European video disc retail sale volumes will be Blu-ray.”

However, despite US BD disc sales tripling in the last 12 months, sales are still well below where film studios would like them to be, and there's little prospect of a Blu-ray Disc topping the DVD sales list soon. According to The Digital Entertainment Group, the studios are blaming Blu-ray's performance on the current economy. However, in a recent media interview, former Fox Filmed Entertainment chief, Bill Mechanic believes there are bigger factors: "If you can buy Titanic for $4.99, [consumers will say] 'Well, wait a minute...'" when they consider buying another film on Blu-ray at a substantially higher price.

On, where Blu-ray movies are usually priced at their cheapest level, there's a major difference between DVD pricing and Blu-ray pricing. An older film like Independence Day is currently being offered on DVD for $14.99 and on Blu-ray for $25.99. A DVD of a new film, The Dark Knight, is retailing for $14.99 on the site, while its Blu-ray counterpart is going for $23.99.

Furthermore, cccording to a consumer study conducted by SmithGeiger in 2008 for the Digital Entertainment Group, 60% of respondents listed higher cost as the largest reservation they had in making a Blu-ray Disc player purchase. Additionally, some of those who do use Blu-ray mentioned price as one important factor when considering the purchase of a Blu-ray Disc title.

Lastly, the ability of Sony’s PS3 to pull Blu-ray sales may be waning. In an interview with TechRadar Philips' Technology Programme Manager, Chris Buma, seems to think that it was no longer the case that consumers were buying the PS3 just for BD movie watching. He revealed that more and more people are buying dedicated Blu-ray players, instead of relying on the PS3 for BD playback.

Buma also pointed to the price difference. At the beginning, the PS3 was the cheapest Blu-ray player out there but this is not the case anymore. "The PS3's domination as a Blu-ray player is certainly going down and the market place for dedicated players is increasing," he said in the TechRadar interview.

Story filed 23.02.09

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