News

posted on 25 April 2008 08:31

Falling DVD sales are not being compensated for by rising Blu-ray sales. Blu-ray player prices are thought to be too high to prompt mass DVD player replacement.

DVD movie sales are falling. They reportedly generated $25 billion for movie studios in 2006, but slumped to $23.1 billion last year. Citigroup analyst Jason Bazinet thinks they will fall further to $21.4 billion this year.

Blu-ray movie sales are accelerating but nowhere near enough to replenish coffers depleted by the fading DVD.
Blu-ray player prices have been fingered as being partly responsible.

Bernstein Research analyst Michael Nathanson says Blu-ray players cost around $400 in the USA and that a price of half that, $200, would be needed before mass replacement of DVD players started. In March Sony Electronics' CEO Stan Glasgow said Blu-ray players would reach $299 by the end of this year and $200 at the end of 2009, meaning DVD player replacements wouldn't seriously start until 2010.

Yet Taiwanese Blu-ray player prices seem set to fall much faster. It is reported that the current average prices is NT$5,500 (US$181) and this will fall to NT$4,000 (US$132) at the end of the year. Why are US Blu-ray player prices so much higher?

The Taiwanese price drop is attributed to increased production faclities lowering unit costs.

Another inhibiting factor is that DVD picture quality is thought to be good enough. Consumers need a very high-definition TV to see a significant increase in quality from Blu-ray compared to DVD. If they have an entry-level or mid-range HD-TV then the discernible quality improvement, much less than that from VHS tape to DVD, will not impress them at all.

Given this background the Blu-ray industry as a whole, player and media manufacturers and movie producers, has a vested and strong interest in getting Blu-ray player prices down as fast as possible.

^{[Paul Roberts, news editor.]}