Blu-ray momentum slow, consumers wait for lower prices, better features

By Susanne Ault -- Video Business, 4/29/2008

APRIL 29 | The Blu-ray Disc market will not gain serious momentum until the next 12 to 18 months, when more advanced players and cheaper hardware options become available in the format, according to ABI Research.

Certain consumers might be waiting for upcoming players boasting such new interactivity technology as Web-enabled BD Live and picture-in-picture functionality, the research firm said. Many of these models will not launch until later this summer and fall.

Especially in a slowing U.S. economy, people might also want to wait until Blu-ray player prices fall closer to $200. Currently, Blu-ray players are priced at $399. Blu-ray software is also tagged at a significant premium over standard DVDs.

To push Blu-ray drive adoption in the PC market, manufacturers have lowered some prices, but these devices also represent a premium cost over standard-definition red-laser drives, said ABI.

Due to its relative value as a videogame console plus Blu-ray player, the PlayStation 3 will make up over 85% of the Blu-ray hardware market in 2008, adds ABI. This lead will continue until 2013 when the installed base of Blu-ray set-tops and PC-based Blu-ray drives should overtake the installed base of PS3s.

ABI analysts believe this waiting period for Blu-ray to really take hold in the market will actually prove healthy for the business.

“Blu-ray player prices remain high, and supplies are limited,” ABI Research principal analyst Steve Wilson said. “This is good for the market, because most current players do not support all the functions that studios place on the discs. Lacking support for—or upgradeability to—BD Live or Bonus View (picture-in-picture), consumers cannot utilize all the available options. Manufacturers would rather sell more full-featured models.”

ABI's findings echo that of a report by Bernstein Research released last week.