Blu-ray growth not as strong as expected, report says

Blu-ray won’t save the struggling home entertainment sector, according to a new report from Screen Digest.

While Blu-ray hardware sales were strong in the US, they didn’t live up to expectations in key international markets in 2009, Screen Digest notes. And even for buyers of a Blu-ray player or PlayStation3, only a disappointing 1.5 titles were brought per household, on average.

Screen Digest’s research notes that total iInternational consumer spending on packaged media fell 2.9 per cent (at fixed exchange rates) to $17.1bn in 2009.

Report author and Head of Video Helen Davis Jayalath said: “The failure of the Blu-ray format to capture enough of the market in 2009 means this downward trend is now set to continue, with the short-term uplift in video spending that we had previously expect to see in 2010-2011 now unlikely to materialise.”

The first quarter of 2010 had been strong for Blu-Ray sales in Western Europe, but Screen Digest says that growth was due to specific market conditions and several strong titles an disn’t likely to be sustained in the future.

Other report findings said that Blu-ray “will account for 35 per cent of total international spending on buying physical video formats by 2014, spending which will have fallen by 22 percent since 2007, from $18.6bn to $14.5bn. By contrast, in the US Blu-ray will represent over 68 percent of physical video purchasing by 2014, although that figure will have declined by 35 per cent since 2007, from $13.3bn to $8.6bn…When physical rental, digital retail and rental and TV-based VoD are included in the equation, international spending on home entertainment is expected to reach $24.3bn in 2014, for a more modest 14 per cent decline from 2007’s comparable figure. Meanwhile, US consumer spending will have slipped just 8 per cent over the same period, to $21.9bn.”

Screen Digest noted that even Avatar is unlikely to boost things heavily, as it is selling well on the traditional DVD format.

The UK market is being dampened by the much higher prices of Blu-ray packages compared to discount DVDs. Jayalath added: “The situation in the UK is particularly difficult for BD. As long as deep discounting of the standard definition format by the supermarkets continues, Blu-ray adoption will continue to be slow because the price differential is simply too large for most consumers to justify in today’s climate of austerity.”