CES 2009: DVD, Blu-ray Spending Slips 5.5% (DEG)

[admin]

Sales and rentals of DVDs and Blu-ray Discs fell 5.5 percent last year to $22.4 billion, approaching levels last seen in 2003 for home-entertainment software.

According to data released Thursday by the Digital Entertainment Group (DEG), a 178 percent increase in spending on Blu-ray discs, to $750 million, could not offset a 7.3 percent decline in sales and rentals of DVD software, which totaled $21.6 billion in 2008.

http://www.twice.com/article/CA6628217.html

[admin]

This is interesting because there's a bunch of "Blu-ray is selling great" articles at the moment, but if you look at the bigger picture, Blu-ray has not being able to help with the decline in DVD sales.

To flesh out the numbers:

2007
DVD: $23.3b
Blu-ray: $421m
Total: $23.7b

2008
DVD: $21.6b
Blu-ray: $750m
Total: $22.4b

In other words, for every extra $1 earned by Blu-ray, DVDs lost more than $5.

The other problem is that for every dollar spent on Blu-ray, that's probably one dollar less people are spending on DVDs (no one will buy both the Blu-ray version and the DVD version). And with Blu-ray's higher cost (both start-up and manufacturing costs), and rapidly dropping hardware and movie prices, it's going to be very difficult to fill the profit hole being left by DVDs.

The problem with Blu-ray is that it's basically just more of the same compared to DVDs, except it's a more expensive better quality version. The delivery method is similar, the purchase process is similar, the usage is similar. That's good because it's familiar, but bad because it may share the same problem with DVDs, and that's the fact that it really isn't in line with today's instant purchase/delivery of digital content. When you look at online music purchasing - how many people are still buying CDs to rip to their iPod, compared to how many are buying directly from iTunes and downloading instantly? Yes, you get Internet connectivity with Blu-ray, but as Sony once said (in regards to HD DVD's Internet content), it's really just a gimmick.

So the movie industry faces the same problem as the music industry a few years ago. The RIAA decided to go all out with DRM and lawsuits, putting the blame on lost profits firmly on piracy. While they were doing it, the online music industry got started, first with DRM, and now without it and it seems to have helped the entire industry move forward. The question is what will the MPAA do? Will they learn from the lessons of the music industry and cut straight to offering DRM free movies online? Let's hope so.

[dr_ml422]

First time I see you actually taking a hard look at the whole Blu-ray revolution admin. Guess there comes a point where we all start thinking twice about anything and heading in a more efficient or practical direction for lack of a better word right now.

When you said it helped the entire industry move forward, did you mean the entire online industry, or the whole music industry jumping into the online business?

That's what gets me about these guys who are running these multi-billion dollar corps. Don't they learn? Or is there obstinate thinking just too much? I'm glad you have these threads and news because I just woke up to the fact that I'm going to have to start a new metod of getting my videos. This disc thing is only taking up space, and like you've been mentioning for a while now, digital copies via another ave is in the works and looking to stay and get better. I'll be using my xtra hd's for my collection for now until I make a decision about the new method I'll pursue. It's only inevitable, and practical, especially as this is my thing now. I'll learn new proggies as always, but this is going to be a priority for sure.

Matter of fact I think I'm going to put my work onto hd's and burn 1 just to make sure it's right. Then just see it and maybe barter like I do instead of continually filling this apt. of mine up. Looks like a local mom n pop shop already.