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.

[Clark Kent]

Blu-ray sales will eventually crush dvd sales. In several years people will look upon dvds like we view VHS tapes now.

[Argento Fan]

Originally Posted by Clark Kent

Blu-ray sales will eventually crush dvd sales. In several years people will look upon dvds like we view VHS tapes now.

Agree with your post. It is only a matter of time before 95% of the public stops purchasing DVD players, and select BD players instead.

[dialog_gvf]

"Adverse" is an odd word to use.

According to Websters:

1: acting against or in a contrary direction : hostile <hindered by adverse winds>
2 a: opposed to one's interests <an adverse verdict> <heard testimony adverse to their position> ; especially : unfavorable <adverse criticism> b: causing harm : harmful <adverse drug effects>

Almost by definition a Blu-ray sale is a lost DVD sale. Top-20 BD marketshare are over 65% for catalog titles.

The issue would be those holding off purchasing certain titles because they are planning to get BD, or want the BD but it isn't yet offered (box sets, indie titles).

Gary

[AlexCruz]

Originally Posted by Blu-Goliath

Agree with your post. It is only a matter of time before 95% of the public stops purchasing DVD players, and select BD players instead.

I agree as well. I mean if you look at it Blu-ray is doing the same to DVD that DVD did to VHS. The parallels are kind of interesting: about 2 1/2 years after DVD launched The Matrix sells 1 million copies, now about 2 1/2 years after Blu-ray launched we have The Dark Knight probably selling more than 1 million copies. Now the only question is, "When are we going to see the Blu-ray $5 bin at Wal-mart?"

[york weir]

I wonder how it will play out in a few years considering not every home has a TV that will take advantage of a blu-ray whereas with DVD virtually all TV's took advantage of it.

[xtop]

positive blu news?! whats this world coming to!

[Terjyn]

Originally Posted by york weir

I wonder how it will play out in a few years considering not every home has a TV that will take advantage of a blu-ray whereas with DVD virtually all TV's took advantage of it.

Blu-Ray players are DVD players. If Blu-Ray continues it's upward trends, DVD players will just disappear completely, to be replaced by Blu-Ray players.

This doesn't mean people will buy the Blu-Rays, it just means that they'll be buying the player to play DVDs.

[GodofBlu]

[QUOTE=blu-mike;1412139
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.
[/QUOTE]

The missing variable is the pay per view type movie rentals by Comcast, Verizon and dish systems. That's why we don't see a direct relationship between dwindling DVD sales and rising BD sales. I've recommended BD players to so many people this year and a frequent response is "we rarely rent DVD's anymore, we just use pay per view". I was very surprised and disappointed.

[saprano]

8 million ps3's? i dont think so. right now theres over 6.5, by years end it should only about 7 million in the U.S

[xtop]

Originally Posted by saprano

8 million ps3's? i dont think so. right now theres over 6.5, by years end it should only about 7 million in the U.S

7.3 could also mean roughly 8. :-p

[saprano]

Yea i guess so, im just an exact person

[Maximus]

Originally Posted by saprano

8 million ps3's? i dont think so. right now theres over 6.5, by years end it should only about 7 million in the U.S

Could be NA figures...

[kevinbr100]

im willing to bet the transition from dvd to blu will be much faster than vhs to dvd once the mainstream starts switching, for the simple reason that bluray players play dvds, obviously dvd players couldnt play vhs tapes, thus slowing adoption.

[scweb13]

Don't the studios make money either way? I don't really get why it matters to some people? I mean, sure it's great for all us blu-fans, but we're still giving the studios our money.

[york weir]

Originally Posted by scweb13

Don't the studios make money either way? I don't really get why it matters to some people? I mean, sure it's great for all us blu-fans, but we're still giving the studios our money.

Another notch in the bedpost to thumb their nose at former HD DVD fans IMO.

[jmkoch]

DVD overtook VHS during a rather prosperous time period. These days, consumer electronic sales are flat or falling. If BD edges up from a micro fraction to a small fraction of the market, that is not enough to "float the boat" for the whole industry. Does anyone who visits a retail outlet notice that BD devices or media still occupy only a niche? Isn't it a bother that for less than the price of a mid-level BD player, you can get a standard DVD player that "upscales," has an HDMI port, and comes bundles with a 5-channel sound system? If Panasonic or Philips really intend to promote BD players, why to they advertise the cheaper and more complete standard sets as "the ideal player for your HDTV"?

On-line or cable and satellite transmittal or rental of movies also lurk as competing alternatives.

[GodofBlu]

Originally Posted by jmkoch

On-line or cable and satellite transmittal or rental of movies also lurk as competing alternatives.

I agree. As I've said in a previous post, a lot of people I know are doing this.

While it seems like the OP's news was good, overall I don't think it was. The comment of concern was as follows:

"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."

I contend that those BD sales losses are going to cable/satelite movie rentals. Definitely cause for concern.

[Joe Cain]

Originally Posted by jmkoch

DVD overtook VHS during a rather prosperous time period. These days, consumer electronic sales are flat or falling. If BD edges up from a micro fraction to a small fraction of the market, that is not enough to "float the boat" for the whole industry. Does anyone who visits a retail outlet notice that BD devices or media still occupy only a niche? Isn't it a bother that for less than the price of a mid-level BD player, you can get a standard DVD player that "upscales," has an HDMI port, and comes bundles with a 5-channel sound system? If Panasonic or Philips really intend to promote BD players, why to they advertise the cheaper and more complete standard sets as "the ideal player for your HDTV"?

On-line or cable and satellite transmittal or rental of movies also lurk as competing alternatives.

Wish I could remember (maybe it was Max?) who wrote that something like 90% of home media sales are concentrated in something like 10% of the consumer pool. If only one in 20 DVD consumers make the switch, and it's the RIGHT 1 in 20, that's enough to shift nearly half of unit sales to the new format.

Haven't we just seen titles like WALL•E and The Dark Knight post initial BD sales of around 1/3 DVD's totals?

Suggesting Panasonic is intentionally sandbagging BD is just wrong---no one owns more BD-relevant patents, so no one has a greater interest in seeing the format succeed.

[Blu-Ray Buckeye]

So even when faced with pro blu-ray news, they try to spin it as a negative overall.

Gotta love these cornholes.