Streaming Players Put Pressure on Blu-ray Disc During Black Friday3 Dec, 2013 By: Erik Gruenwedel
Market gains by Google Chromecast, Roku and Apple TV undermined Blu-ray Disc at the retail level, says NPD analyst Ben Arnold
With the release of Black Friday and Cyber Monday retail sales, speculation begins as to what percentage of the millions of dollars consumers spent on home entertainment targeted digital compared to physical.
While the breakout of digital and packaged media sales during the four-day period won’t be made public until the end of the year — if at all — the noticeable hype for Blu-ray in 2012 was noticeably waning this year.
Walmart in 2012 heralded its Black Friday marketing with a $39 Blu-ray player and some BD titles priced less than $5. The retail behemoth mirrored that approach in 2013 but without last year's bravado when several studio new releases were marked down to $10.
Indeed, Blu-ray Disc sales jumped 19% during Black Friday in 2012 as retailers imposed a 24% ($17) cut to many title’s average selling price, according to The NPD Group. No such price cuts existed among retailers this year, according to Ben Arnold, director, industry analyst with The NPD Group.
“I suppose there is some more room to go down on [average selling price] in order to drive BD demand on the unit side, but I don’t expect 19% growth this year during Black Friday,” Arnold wrote in a Dec. 3 email.
Arnold said that in visits to entertainment retailers before and during Black Friday, he suggests Blu-ray will again come out strong in units despite the lack of many standout discounts.
“I didn’t see any Blu-ray deals that stood out to me, so I don’t expect as severe a cut on ASP that would push units as high as they were last year. Unit sales will still be up, but not as much,” he said.
The culprit: streaming devices. Roku, the market leader for broadband-enabled devices streaming myriad third-party content channels to living-room HDTVs, implemented a new TV ad campaign entering the fourth quarter under the aegis of a fresh marketing director backed by funding from corporate partner 21st Century Fox.
With increased marketing comes price cutting, which saw several from Apple TV, Google Chromecast and Roku. Unit growth in streaming devices was up 30% in 2012 from 2011 — a percentage Arnold believes could double this year.
“That might be conservative,” the analyst said. “So if I expect Blu-ray to grow slower than it did during Black Friday last year, part of that has to be due to what’s going on in streaming devices.”