By Erik Gruenwedel | Posted: 04 Feb 2009
Despite a sluggish start, Blu-ray, and video-on-demand (VOD) to a lesser extent, is projected to drive and dominate home video revenue over the next 10 years, according to a new report.
Notwithstanding dour packaged-media sales reported this week by The Walt Disney Co., standard-DVD units still comprise 97.1% of the market. Indeed, Time Warner reported an $18 million increase in quarterly operating income for its filmed entertainment business, which includes Warner Bros. Home Entertainment Group.
SNL Kagan said the next-generation high-definition packaged-media format will attain nearly 60% market share in 2014 and generate $13.1 billion in revenue. The Monterey, Calif.-based research firm said BD market share would soar to 73.8%, or $15.6 billion in revenue by 2017.
Concurrently, sales of Blu-ray players are expected to grow from $255.4 million in 2008 to $1.3 billion in 2010, reaching mass-market penetration and spiking to nearly $6.9 billion by 2013.
“Blu-ray will be the driving force behind the video retail market throughout the next decade,” said Wade Holden, analyst at SNL Kagan. “The current economic climate, however, will slow the growth of this new format and likely keep it from reaching the heights that it may have [reached] in better times.”
Holden said BD’s dominance in home video could be short-lived as VOD is poised to become a major force in home entertainment after 2017. Kagan estimates that there will be 98.8 million high-speed Internet homes capable of delivering VOD in 2017, compared to 115.2 million high-definition DVD homes.
“VOD services will continue to improve in both technology and content over the next decade and begin to draw consumers away from Blu-ray and DVD by 2017,” he said.