Combo Packs Threaten Blu-ray Disc Production1 Mar, 2011 By: Erik Gruenwedel
Increased studio new-release combo packs incorporating Blu-ray Disc, DVD and digital copy is “dangerously” taxing global Blu-ray production facilities, according to a new report.
Global pre-recorded Blu-ray Disc production topped 400 million units in 2010, a near 60% increase from 240 million units in 2009, according to Futuresource Consulting.
The London-based research firm said when factoring in Sony PlayStation 3 video game titles, Blu-ray Disc production should approach 2 billion units by 2014.
Indeed, total domestic consumer spending in 2010 on Blu-ray Disc software rose 53.3%, to $2.3 billion in 2010 from $1.5 billion in 2009, with purchases up 68%, to $1.8 billion from just over $1 billion, according to DEG: The Digital Entertainment Group.
“The BD replication industry saw capacity utilization improve markedly during 2010, with replicators working flat-out during the final months of the year to get product on the shelves in time,” said Jim Bottoms, director and co-founder of Futuresource.
Bottoms said that by the fourth quarter of this year, BD capacity utilization would average more than 80% in North America and more than 75% in Europe. He believes increased use of combo packs for major new releases could incur production backlogs and compromise street dates.
The report found that retailers continue to maintain copy depths in stores, adding momentum to the BD format through strong promotions and the elimination of out-of-stocks and lost sales. It said the launch of 3D Blu-ray titles represents a long-term opportunity and production challenge for the industry to further sustain consumer interest in packaged entertainment media.
“Collectively, across the United States and Europe, the industry needs to invest more than $100 million in new plant and equipment this year in addition to upgrading older replication lines, in order to be able to meet the disc requirements of the content community,” Bottoms said. “The studios will try to press ahead wherever possible to alleviate some of the pressure, but even with this level of investment, [the fourth quarter] is still going to present some peak season challenges to avoid missing street dates on some of the key titles.”