Report: European Blu-ray Sales Disappoint1 Jun, 2010 By: Erik Gruenwedel
Unlike steady improvements in sales of Blu-ray Disc movies and players in the United States, international adoption of high-definition packaged media and hardware has failed to catch on, according to a new report.
London-based Screen Digest found among households that purchased a Blu-ray player or Sony PlayStation 3 by the end of 2009, just 1.5 Blu-ray movies were bought. The report cited the ongoing economic recession and slower-than-expected fall retail sales for the downward figures.
Overall consumer spending on packaged media fell 2.9% (at fixed exchange rates) to $17.1 billion in 2009.
By comparison, sales in 2009 of Blu-ray movies increased 70% in the United States, generating more than $1.5 billion in revenue (including rental), according to DEG: The Digital Entertainment Group.
“The failure of the Blu-ray format to capture enough of the [foreign] market in 2009 means this downward trend is now set to continue, with the short-term uplift in video spending that we had previously expect to see in 2010-2011 now unlikely to materialize,” said Helen Davis Jayalath, head video analyst with Screen Digest.
Through 2014, Screen Digest expects international consumer spending on DVD/Blu-ray movies to fall to $14.5 billion, an average decline of 3.5% per year.
“For many people, it seems, DVD remains ‘good enough’ for most titles and the additional cost of opting for a hi-def BD version simply cannot be justified in the current climate of austerity,” the report said.
The report downplayed data showing the European DVD/Blu-ray market (notably Germany, France and the United Kingdom) saw an overall sales increase of 2.3% to $1.9 billion (including 3.8% increase in unit sales) in the first quarter of 2010. Screen Digest analysis found the uptick reflects a combination of specific market conditions in France and Germany with a stronger title slate than in Q1 2009.
“Not only were several strong Hollywood titles released in Q1 to take advantage of the early Easter break but both France and Germany also benefitted from strong local titles in the first quarter,” the Screen Digest report stated.
Blu-ray is not catching on as well Internationally as it is in the United States, the report said.
Indeed, half of sales for Avatar, the top-grossing movie of all time, were on Blu-ray Disc in the United States. But sales of Avatar in key international territories were not as skewed to Blu-ray. Hampering Blu-ray sales of Avatar internationally was a price war among British retailers that saw first week DVD prices for the movie at $11.40 — half the cost of the Blu-ray edition.
The report found that BD will account for 35% of total international spending on packaged media sales by 2014. In the United States, Blu-ray will represent over 68% of packaged media sellthrough during the same period.
“As long as deep discounting of the standard-definition format by the supermarkets continues, Blu-ray adoption [in Europe] will continue to be slow because the price differential is simply too large for most consumers to justify in today’s climate of austerity,” Davis Jayalath said.