Blu-ray: The State of Play – October 2008

There has been a lot of stories recently about how well/badly Blu-ray is doing, and I thought a post on it to clarify a few things.

There seems to be a lot of negativity surrounding Blu-ray at the moment, which is strange because Blu-ray has just had it’s best ever week in terms of sales, thanks largely to the release of Iron Man. Before we get to the negativity, let’s have a look at the Blu-ray sale stats from Nielsen VideoScan for the “Iron Man Week”:

Period: Week ending 5th October
Top 20 Sales (by disc volume): 13% of market (87% for DVDs)
All sales (by dollar volume): 15.68% of market (84.32% for DVDs)
Total Sales: $26.84 million

The above figures are impressive because if you’ve been keeping track of the Blu-ray sales stats as I’ve posted them in the forum, then the top 20 sales (by disc volume) averages around 8%, and the all sales (by dollar volume) is around 7%. That’s almost double of what normally happens, and it’s all due to one title (the second most popular title on Blu-ray for that week sold 7 times less than Iron Man). With 13 to 15% of the market, either by disc or dollar volume, that’s pretty impressive for a format that’s really only started to compete about 6 months ago (when Toshiba called it a day on their HD DVD format).

Steve Jobs: No to Blu-ray ... for now

Steve Jobs: No to Blu-ray ... for now

So why the negativity? Well, this last week or two, two pieces of news stories did dampen the enthusiasm a bit for Blu-ray. One was Microsoft saying once again they have no plans to add Blu-ray support. This isn’t a big deal really, because the PS3 is the best console/player for Blu-ray, and the Xbox 360 with add-on drive won’t be able to compete on quality or even price. The second piece of bad news, and this is a big one, is Apple’s Steve Jobs calling Blu-ray a “Bag of Hurt” and wanting nothing to do with it until “things settle down, and waiting until Blu-ray takes off in the marketplace before we burden our customers with the cost of the licensing and the cost of the drives”. The high licensing cost of Blu-ray has always been a weakness of the format, but to hear it from someone like Steve Jobs is something else.

So how is Blu-ray doing actually? If I had to give Blu-ray a report card score, then I think at the moment, it gets a solid C, maybe a C+. Why the pessimism, you ask? Well let’s just go through them.

First of all, while the Nielsen VideoScan figures, for the Iron Man week at least, is looking great, those stats are a bit misleading (aren’t they all!). Note that the top 20 sales figures are denoted in disc volume. This favours Blu-ray slightly because Blu-ray sales fall off quite rapidly after the top 20 items, in fact, or sometimes as in the case of Iron Man week, fall off after the number 1 item (7-to-1 sales ratio between Iron Man and second place Forgetting Sarah Marshall). DVDs, on the other hand, is almost the opposite, with most sales coming from the bottom end of the sales charts due to discounting and the larger catalogue of movies.

And if you then look at the all sales by dollar volume figures, that’s misleading as well. Blu-ray movies are priced higher than DVDs, usually $2 to $3 higher than the premium DVD version (2 disc collection, for example), and up to $10 higher than the budget DVD version (single disc version). And so if you compare dollar volumes, then Blu-ray can sell less discs, but still have the same dollar volume as DVDs. And considering that many older DVD releases are on sale for under $10, and that Blu-ray has no titles in this price range, it further favours Blu-ray.

The best way would be to compare disc volumes only, because that’s the only way we can see if Blu-ray is successfully replacing DVD as the home video format. For whatever reason, these stats are not available, or not published, and so an educated guess (not including the Iron Man week stats, which might be a one-off) would be that if Blu-ray holds about 7% of the home video market by dollar volume, then it would translate to perhaps about 5% to 6% by disc volume. That’s not too bad, but for a format that has been the sole HD disc format for 6 months already, the gains, if any, are small to say the least.

DISH 1080p: competition to Blu-ray?

DISH 1080p: competition to Blu-ray?

But while Blu-ray has no HD disc format competitors, it does have competition in general, and not just from DVDs. High definition downloads and subscription television are becoming more widely available. While normally A/V quality from these services cannot be compared to Blu-ray, a recent review of DISH’s 1080p service did say they the differences were small. And of course, downloads have the convenience of not having to have a physical disc collection, which while being attractive to many people (me included), does not have the convenience of a digital media collection (and full quality Blu-ray managed copy is nowhere in sight). A VOD type service would be allow for greater access to a larger collection for many people, and traditional non-interactive cable services with 1080p would be cheaper than building a large collection, especially if you only watch movies once.

Then we have DVD upscalers, which can already do a decent job of getting faux HD to your HD panel, and Toshiba’s innovative work on improving upscalers even more so with new techniques. In other words, competition is plenty and one gets the sense that Blu-ray doesn’t have a whole lot of time before it has to establish itself as *the* format for HD. Recent figures in Australia showed that only 17% of HDTV owners had Blu-ray players. The heavy reliance on the PS3 as a Blu-ray player is also shown in these figures, with only 7.5% of Blu-ray players being standalone types (the rest are all PS3s).

And the economic problems don’t help, of course.

But it’s not all doom and gloom. The holiday shopping season is just around the corner, Blu-ray hardware prices are falling already in anticipation, hit titles such as The Dark Knight and WALL-E are coming soon as well, so Blu-ray might just have a holiday season to remember. The timing may not be great, but Blu-ray needs to do well in the next few months and if it can, then its future will be safe.


2 Responses to “Blu-ray: The State of Play – October 2008”

  1. Weekly News Roundup (19 October 2008) « Blog Archive « DVDGuy’s Blog @ Digital Digest Says:

    […] DVDGuy’s Blog @ Digital Digest Just what the world needs, another blog « Blu-ray: The State of Play – October 2008 […]

  2. Blu-ray: The State of Play – October 2009 « Blog Archive « DVDGuy’s Blog @ Digital Digest Says:

    […] may remember that I wrote a similar feature around the same time last year. It might be interesting to read that again to find out just how […]

About Digital Digest | Help | Privacy | Submissions | Sitemap

© Copyright 1999-2012 Digital Digest. Duplication of links or content is strictly prohibited.