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DVD sales plummet, last chance for Blu-ray this Christmas

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Trendwatch
By Christian Ziberg   
Monday, November 24, 2008 12:51
New York (NY) – Hollywood studios released recent movie sales data that indicate that DVD sales have dropped in 2008 again. The decline is estimated at about 4%, which may not sound much, but is significant when we consider the fact that DVD sales make up 70% of Hollywood movie revenue. Studios hope to reverse the trend with releases such as "Wall-E" and "The Dark Knight" – and hope that Blu-ray will finally become mainstream – or disappear.

Time Warner-owned Warner Bros., the largest distributor of DVDs, said DVD sales dived about 4% this year and it appears that especially weak October sales take the blame for the decline. The studio said that Blu-ray sales will miss this year's target by at least 25%. The independent tracking service Nielsen VideoScan estimated a 9% drop in Q3 DVD sales and a 22% decline in new titles' sales. Nielsen VideoScan's results do not include DVD sales at Wal-Mart. 2007 DVD sales dropped by 3.2% from the 2006 level.

Blu-ray’s disappointing performance should not be too surprising given that player prices have just begun recently to drop and Blu-ray movie prices are typically 25 – 50% above those of DVDs. One research suggests that consumers will not embrace the format until there is no doubt that the technology is here to stay. Blu-ray players are still expensive, but have shown significant price drops recently, with some players selling for less than $200. Wal-Mart is believed to be offering a $128 player on Black Friday.

According to Pricegrabber.com, the Blu-ray player with the lowest average U.S. retail price is currently the Memorex MVBD2510, which goes for $176. Sharp’s BD-HP21U is selling for an average for $191, Philips BDP7200 for $221 and Samsung’s BD-P1500 for $226, the price comparison service states. There are some exclusive-brand offerings below $200, such as Best Buy’s Insignia NS-BRDVD player, which is currently offered for $170.

Hollywood studios believe that sub-$200 Blu-ray players combined with more Blu-ray exposure in retail stores will help the format finally  take off this holiday season: Over $25 million will be spent to push DVD and Blu-ray holiday releases, like "Wall-E," "Hancock," and "The Dark Knight." The latter is well on its way to become the most pirated movie of 2008. Even studio execs see this holiday season as Blu-ray's last chance. "We think this is a do-or-die time for Blu-ray," Warner Home Video president Ron Sanders told the New York Times.
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