Andre Yoskowitz
25 Apr 2008 18:28
Despite large growth in the high definition market, standard DVD sales continue to sag, and home video revenue will continue to fall, report a few notable analysts.
According to Reuters, 5 million HD movies have already been sold this year (mainly Blu-ray) and that puts the pace far ahead then 2007 which saw only 10 million movies sold for the entire year.
This strong growth however is not enough to make up for the continued sagging sales of standard definition DVDs. In 2006, movie studios generated $25 billion USD in revenue for home video releases. In 2007 the number fell to $23 billion and Citigroup analyst Jason Bazinet believes that number will fall again this year to $21.4 billion.
Analysts also feel that consumers see less benefit in upgrading to Blu-ray then they did with the switch from VHS to DVD. Many consumers don't even have the necessary equipment to enjoy Blu-ray, including Blu-ray players, HDTVs or surround sound setups. Price of course is another significant barrier with most Blu-ray players costing about $400 USD, about $250 USD more expensive than even the best upscaling standard DVD players.
Sony Electronics CEO Stan Glasgow agreed in March that a price drop was necessary for more market penetration but that the necessary $200 price point wont be available until at least 2009.
“I don't think $200 is going to happen this year. Next year $200 could happen,” said Glasgow. “We'll be at a $300 rate this year. $299 will happen this year.”
Another factor is that Blu-ray movies usually sell at a $15 dollar premium over their standard definition counterpart (yes, even at Amazon) making the alternative not as pretty usually despite its much improved audio and video.