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NPD: Tepid Consumer Interest in Blu-ray

11 Feb, 2008 By: Erik Gruenwedel

The Blu-ray Disc Association may have declared victory over HD DVD in the format war, but consumers remain largely indifferent toward high-def packaged media, according to a new study.

The report from the NPD Group, based on a sample group of 6,000 frequent DVD buyers, found that fewer than 10% of respondents said they would buy either a standalone Blu-ray or HD DVD player in the next six months.

Despite Warner Home Video's decision in January to exclusively release all high-def packaged media after May 31 in Blu-ray, the number of respondents intending to purchase a BD player increased just 1.8%, to 8.1%, as of Jan. 16, according to the study.

Russ Crupnick, VP and senior entertainment analyst with the NPD Group, said even such a small percentage increase when based upon the number of DVD-buying U.S. households would result in sales of 1.6 million standalone BD players.

Currently there are about 1 million standalone Blu-ray and HD DVD players combined in the United States.

“I think it is a positive sign but not an overwhelming game changer,” Crupnick said. “It is significant from a marketing standpoint. It will take some time for all of this to trickle down at retail.”

He said a caveat of the study is that intent among respondents to purchase next-generation packaged media often is not followed through at retail.

“It is a measure of awareness,” Crupnick said. “How positive somebody feels about the format and not necessarily translating to actual sales.”

Crupnick said a previous NPD study for HDTV found that a majority of respondents were satisfied with standard DVD.Indeed, Warner last year in a consumer study found that more than 50% of respondents were indifferent toward HD packaged media.

Nonetheless, retailers appear to be leaning toward Blu-ray in greater numbers.

Best Buy Co. said beginning in March it would prominently showcase BD hardware and movies in stores. The Minneapolis-based consumer electronics chain is considered the largest seller of HD packaged media.

Ken Cranes Big Screen Headquarters, a Southern Calif.-based chain, in its Sunday newspaper circular offered a free Toshiba HD-A3 player with the purchase of any Toshiba HDTV.

Steve Caldero, SVP and COO of Hawthorne, Calif.-based Cranes, reiterated that the free HD DVD players did not reflect a decision by Cranes to abandon HD DVD.

He said Warner's decision still left retailers with the responsibility to sell both formats, since Universal Studios, Paramount Pictures and Dreamworks still release exclusively in HD DVD.

“It hasn't been the best situation from day one,” Caldero said.

No. 2 CE retailer, Circuit City Stores Inc. continues to sell both HD DVD and Blu-ray players.

“It will be very difficult at retail justifying selling a format that is not going to have the support of the studios,” Crupnick said.

He said the Blu-ray survey results should be considered positive because they represent a beginning as well as inclination among consumers to do something in the future.

“There is a lot of missionary work to be done,” Crupnick said.

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