Industry Has High Hopes For Holiday Blu-ray Sales
Sales of high-definition Blu-ray players are the best hope for a holiday surge that could offset a declining market for home video products, movie studio executives said Friday.
The remarks were made at an event hosted by the Digital Entertainment Group, a consortium of electronics manufacturers and movie studios.Â
The executives predict that 10.5 million households would be able to play Blu-ray videos by the end of the year, including roughly 2.5 million standalone players and 8 million PlayStation 3 game consoles.
The figures are much lower than the 14.4 million households that Adams Media Research estimated would be playing Blu-rays by the end of the year. Nevertheless, if the executives are right, about 1 million more standalone players and 2.3 million more PS3s must be sold through the holidays.
Prices of Blu-ray players have dropped in recent months, and can typically be found online for less than $200, encouraging hope for widespread adoption of the format.
"The only dark cloud is the economy," said David Bishop, president of Sony Pictures Home Entertainment, adding that Sony Corp.’s consumer products business is "showing no slowdown in the adoption of the PlayStation 3."
There are currently 5.7 million PS3s installed in the U.S., and Sony expects to sell 4 million to 5 million additional units by March.
"We remain pretty confident that we’ll meet our targets for the fiscal year," said Sony Computer Entertainment America spokeswoman Julie Han.
These "early adopters" of video technology are crucial because they often purchase more movies than consumers who adopt a trend at a later time.
"These are the heavy buyers, the heavy collectors," Craig Kornblau, president of Universal Studios Home Entertainment, told the Associated Press.
The executives agree that Blu-ray is still in its early stages, having only surpassed Toshiba-Corp.-supported HD DVD as recently as February.
Last week, the consortium launched a $25 million TV advertising initiative to push Blu-ray, acknowledging that roughly 50 percent of those polled in a recent survey were not aware the format war was over.
Sales and rentals of Blu-ray are expected to counter some of the predicted 6 percent decline in traditional DVD revenue in the U.S. this year.
U.S. video rental revenue declined 1.2 percent to $5.6 billion while sales dropped 3.5 percent to $8.6 billion during the first three quarters of this year, according Video Business.
And the slowing economy remains an ongoing concern.
The consortium conducted a survey last fall of high-definition TV sets in the U.S., U.K. and Japan, and found that just 12 percent of respondents reported they were likely to purchase Blu-ray players in the next six months.
However, another 30 percent said they were open to purchasing them. It is not yet clear how lower prices will affect potential Blu-ray consumers.
"This was done before prices started to come down and before the economy started to hit," Chris Lang, senior vice president of research firm SmithGeiger LLC, told a panel at the event.
Consumers without high-definition sets are not expected to be large contributors this season, according to Bob Chapek, president of Walt Disney Studios Home Entertainment Worldwide.
He added that purchasing a $1,000 high-definition TV and even a moderately priced Blu-ray player may be out of the question for some consumers amid a slowing economy.
"It’s only logical to expect there’d be some economic impact," he said.
However, "We’ve been pleasantly surprised so far."
Blu-ray sales now comprise roughly 10 percent of total home video sales. However, this number is growing. Indeed, in October, sales of Blu-ray discs more than quadrupled to 2.2 million units.
A wide variety of upcoming titles are riding on the format, including Warner Bros.’ "The Dark Knight" due out in December. Previous top-selling titles, such as "Iron Man", "The Incredible Hulk" and "Hellboy II: The Golden Army" have had a strong appeal among PS3 owners, something that led to high hopes for a holiday turnaround.
"Every week as the next title comes out, we’re all holding our breath," Kornblau said.
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