A global media analyst company has outlined that despite a lot of interest in the medium, Blu-ray is not expected to drive sales in the video category until well into 2010.
In its recent report covering the global video market, Screen Digest, outlined that despite a four-fold increase in international Blu-ray Disc spending to $482 million over the year, the entire video business lost $2.6 billion in 2008 predominantly due to a fall in DVD purchase and rentals.
The report outlined that last year consumers spent $26.4 billion on video software, with two thirds of that figure ($18.1 billion) spent on DVD disc purchases, which is a 3.6 per cent drop on 2007 and a 4.7 per cent drop on disc sales alone.
“The sales figures are in line with the overall trend which saw consumer spending plateau between 2004 and 2007 and the North American market starting to decline in 2007 which signalled the start of a global downward trend,” said Screen Digest in a statement.
The decline in DVD sales was expected in the industry and Blu-ray was heralded to account for this decline, but we are still yet to see the medium take off rapidly.
The report outlined that the slow acceptance of Blu-ray in the market is due to the initial format war with HD DVD taking away a unified marketing approach and the worldwide recession slowing down consumer spend in the market.
“The worldwide recession in consumer spending and the easy availability of video via other means such as downloading, pirate, legal and illegal temporary ownership, ensured that despite strong sales of Blu-ray in 2008 of $482 million, they barely made a dent in the missing revenue.”
In terms of Australia, the report highlighted that the country has a strong online physical video rental method, thanks to companies like Quickflix, and this has slowed down the decline. But overall many countries aren’t embracing this method on a global scale.
Helen Davis Jayalath, senior analyst at Screen Digest, commented on how Blu-ray will affect the industry in the coming years.
“We expect Blu-ray to account for 6.9% of international video spending this year – assuming there is strong promotional activity,” she said.
“However, despite consumers’ interest in the high definition format and demand for packaged media, the current challenging economic climate means that we don’t expect Blu-ray to be driving even minimal sector growth until 2010.”