Global DVD, Blu-ray sales to stabilize in 2010

PHYSICAL: NOV. 19 | PHYSICAL: High-def not yet covering falling DVD, says Screen Digest

By Susanne Ault -- Video Business, 11/19/2009

NOV. 19 | PHYSICAL: Surging Blu-ray Disc sales will fail to stem declining standard-definition DVD sales through 2009, but the global packaged media business will stabilize by 2010, according to Screen Digest.

The research matches projections from studio chiefs made during the high-definition conference Blu-Con 2.0 earlier this month.

DVD will be negatively impacted by the weak economy and the technology's fast falling pricing, especially evidenced by this season’s $10 price war on new release fourth-quarter titles. Screen Digest notes that world DVD/Blu-ray unit shipments will continue to decline this year, following a 1.4% drop to 2.7 billion units delivered between 2007 and 2008. Blu-ray shipments tripled between 2007 and 2008 to 67 million units, but the growth wasn’t enough to offset DVD declines. That pattern continues this year, said Screen Digest.

However, Blu-ray shipments will account for 8.5% of total video spending in 2009 and be on track to steady the industry next year.

With pricing, the company expects the average worldwide price of a DVD to drop 8% to $13.42 in 2009. Blu-ray pricing has dropped 10% since its introduction in 2006 for U.S./Japan and 2007 elsewhere.

Renting activity will account for 34% of global spending this year, marking an uptick of two percentage points from 2008. In the U.S., this has especially been driven by the growth of Netflix and low cost $1 a night Redbox rentals.

With hardware, the number of global DVD households should exceed 500 million for the first time, rising 8.5% to 540 million in 2009. Also by year’s end, Blu-ray set-tops will be found in 18.4 million homes worldwide, and more than 27 million homes will have a Blu-ray-capable PlayStation 3. This hardware expansion will help fuel Blu-ray title sales and create healthier times for the home video category by 2010, said Screen Digest.

“Clearly, the start of a global recession was not the ideal time to launch an upgrade to what many consumers consider to be a perfectly serviceable home entertainment system, and spending on the Blu-ray format has been slower than the industry had hoped as a result,” said Helen Davis Jayalath, head of video at Screen Digest. “However, Screen Digest’s research shows that the high-def BD format has the potential to return the physical video market to growth in 2010 and to ensure that packaged media can still compete in today’s increasingly competitive entertainment world.”