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Report: Delayed Impact for High Definition DVD

7 Dec, 2005 By: Erik Gruenwedel

Media interest in next generation DVD formats may be generating a lot of ink, but the technology won't have much of an impact on packaged media until the end of the decade, according to a new study.

Scottsdale, Ariz.-based market research firm In-Stat described an unsettled market beset by a mature DVD industry competing against burgeoning delivering channels, including video-on-demand (VOD) and downloading.

“The migration to next-generation, high-definition optical formats is not going smoothly,” said In-Stat analyst Gerry Kaufhold. “It sounds like both formats will be launching in 2006, but we don't think the uptake on the players is going to be huge.”

Kaufhold said consumer interest will be tempered by Sony's pending launch of the PlayStation 3 with a Blu-ray player included.

He said the intense interest in PlayStation would likely require Sony to orchestrate a worldwide launch, which requires time.

“The sale of high-definition DVD is similar to the video game business. First you have make sure there are enough players out there to justify the market,” Kaufhold said. “It will probably be 2008 or 2009 before there are a significant number of players to make a dent for the studios.”

The report said that by 2009, annual video sales will top $50 billion, and 41 percent of U.S. households would be watching movies on HD. Other findings suggest portable media players and downloading services would spur industry growth.

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