Wall St. J.: "Blu-ray's Time Comes as DVDs Fade" (1 Viewer)

[Michael Reuben]

ttp://online.wsj.com/article/SB10001424052748704278404576037691969791946.html?mod=djemTEW_h#articleTabs%3Darticle


The WSJ still charges for online access; so here are some relevant excerpts:

A combination of the weak economy, online piracy and low-cost rental and streaming services has driven continued declines in DVD sales this year, but strong growth in Blu-ray—premium-priced discs that offer a higher-quality home viewing experience—suggests consumers still have an appetite for physical home-movie products.

The trend has led some to question whether the electronics industry's embrace of Internet-connected television sets and set-top devices has come too early, leaving consumers confused by the myriad of technology choices and content limitations of online video. That prospect has fueled concerns that the industry might not be allowing its Blu-ray business to live up to its potential.


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Sales of Blu-ray movies were up 75% year-to-year at the start of the holiday shopping season, according to Nash Information Services, and are expected to nearly double for the full year. Blu-ray is on track to be a $2 billion business this year, while the DVD business—down 13% through the first three quarters of the year—is expected to shrink to $8 billion.

NPD Group [a market research firm] said that 13% of U.S. households had a Blu-ray player at the beginning of the holiday season, and that number could rise to 20% early next year, driven by a proliferation of Blu-ray players available for under $100 in this holiday season.

 

[Jeff Ulmer]

I would hazard to bet that strong sales of Blu titles has more to do with pricing below $10, not the premium titles suggested by the article. My local grocery store had an end cap of $5 titles - this is what is driving the Blu market.

 

[Michael Elliott]

I've never understood how the economy can hurt DVD sales yet not bother the higher priced Blu-ray titles.

 

[Douglas Monce]

Blu-ray is an expanding market. As more and more people get a blu-ray player, either to replace and old DVD player or just because they are now below $100, they are buying the occasional blu-ray. Sales expand because more and more people are buying the occasional blu-ray.


DVD however is NOT an expanding market. Everyone who is going to own a DVD player pretty much already does. So people who before were regularly buying DVDs, are now only buying an occasional DVD. The DVD market is shrinking because people are being more picky about what they are buying. People are now watching those films that they would have just bought before, on streaming services. Also the prices of DVDs have gone up in effect because sales are not as frequent, and stores are no longer using them as a loss leader.


In fact blu-ray seems to have become a loss leader. The Target store near me has an endcap that they just rotate titles in and out of at $10. As a result of blu-ray being treated this way, I'm sometimes seeing the blu-ray copy of a new release is actually less expensive than the DVD of the same title.


Doug

 

[Robert Crawford]

Originally Posted by Michael Elliott

I've never understood how the economy can hurt DVD sales yet not bother the higher priced Blu-ray titles.

Oh, I think it hurt BRD sales and it's my thought process that Blu-ray would have at least 25% of the market now instead of 20%, if the economic events of 2-3 years ago didn't occur as they did.

 

[Will_B]

Originally Posted by Michael Elliott

I've never understood how the economy can hurt DVD sales yet not bother the higher priced Blu-ray titles.

Sometimes higher priced items continue to do well in a bad economy because the people who buy higher priced items aren't affected by a bad economy (or not in any immediate way).


But in this case, I'd imagine it is simply that BluRay sales are growing across all classes -- but would have grown even more.

 

[Michael Elliott]

It could be that all the "A" list titles are already out on DVD. I'd still like to see some actual numbers on which titles are selling and which aren't. If Blu-ray was hitting a grand slam it looks like we'd see many more "B" and "C" titles making their way to the format.

 

[Cees Alons]

Originally Posted by Michael Elliott

I've never understood how the economy can hurt DVD sales yet not bother the higher priced Blu-ray titles.

(1) Possibly the buyers of SDVD were, as a group, hurt more by the economy than the group of buyers of BDs (statistically and on average).


(2) The sum of SDVD total sales + BD total sales may be lower currently even if sales of BD are up enormously. It's not the percentages figures that you need to add up. If the annual sales of BDs will continue like this, that logic is going to change soon, of course.



Cees

 

[Adam Gregorich]

I'm just glad that it is looking like physical media with still be with us for a while .

 

[DaveF]

Since the article is unreadable, I can only go by the initial quotes.

[COLOR= rgb(24, 24, 24)]A combination of the weak economy, online piracy and low-cost rental and streaming services has driven continued declines in DVD sales this year, but strong growth in Blu-ray[/COLOR]

Or it could be that Blu-ray purchases are replacing DVD purchases; because in other areas the weak economy seems to spur sales of affordable luxury goods as people cut back on major purchaces but splurge on small treats to mitigate the psychological pinch.


Or perhaps some combination of both? What's the history of home media? How strong were VHS sales the few years before DVD released? Was it growing still?


And there's the bogeyman of "online piracy". So easy to blame, yet never quantified.

 

[Michael Elliott]

I'd still be interested in some actual numbers. If the best selling Blu-ray sold one million copies in 2009 then it's easy to expect the best selling title of 2010 to sell more simply because more people have joined the party. I don't think it's anything ground-breaking because if the numbers last year were low then it's rather obvious that they're going to go up. If you look at the sales numbers on DVDs there was a major jump after the first four or five years and they continued to go up as more and more people bought in.


The sales eventually went down where in 2006 the best selling title sold 14 million while the best selling title this year has only sold 9 million. Netflix, Redbox, piracy or economy. The sales numbers continue to go down but I think a large reason might just be the fact that people have more options than owning. I'm not going to lose any sleep for any studio who "only" sold nine million copies of something but I'd say this number is much larger than any Blu title will sell anytime soon.


If people are passing DVD because they can just get an illegal copy then common sense would say they would pass the Blu for a free copy. Netflix and Redbox are offering Blu titles so again, common sense would say this is going to take away sales from Blu just like the article says it's doing to DVD.


With all the other "options" out there I'm still somewhat surprised that any title is still selling 9-million copies. If DVD is really dying I am interested to see how many copies certain "C" and "D" films sell on Blu and when the studios will start releasing them.

 

[Matt Hough]

Fox has been releasing some C and D titles already. I reviewed two of them in 2010 that spring readily to mind: Mirror 2 and Troll 2.

 

[ChadMcCallum]

Originally Posted by Adam Gregorich .

Hear, hear!