Analyst: Blu-ray Taking Sales From DVDs

[blu-mike]

Washington, D.C. (December 16, 2008) -- The studios' heavy promotion of the Blu-ray high-def disc is having an adverse impact on standard-def DVD sales this fourth quarter.

That's according to Wall Street analyst Richard Greenfield, as reported by Home Media Magazine.

Greenfield, who works for Pali Capital, notes that retailers have significantly lowered prices on Blu-ray players this holiday season and expanded shelf space to carry the new set-tops. Consequently, he forecasts that standard DVD revenue will fall six percent in 2008.

Even worse for the industry, while Blu-ray sales are rising, the analyst said they are not expanding fast enough to make up for the dropping DVD sales.

“While positive long-term, the installed base of Blu-ray is simply not large enough to make up for lost floor space of standard DVD,” Greenfield wrote, according to Home Media Magazine.

There are other reasons why standard-def DVD sales are shrinking, as the home video industry as a whole has experienced slower sales in the past year.

Greenfield says Blu-ray sales are showing signs this holiday season of becoming a solid performer. He notes that the Blu-ray edition of The Dark Knight has likely already exceeded one million units in sales.

The analyst predicted that standalone Blu-ray player sales would reach 2.5 million units in 2008, but could double or triple in 2009. Those sales do not include the PlayStation 3, which has a Blu-ray player inside. He said there should be roughly eight million PS3's sold by year's end.