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Blu-ray revenue on the rise but what does it really mean?

Written by Rich Fiscus (Google+) @ 21 Jul 2008 13:58 User comments (10)

Blu-ray revenue on the rise but what does it really mean? Half way through 2008 the home video market has made studio executives happy. Although spending hasn't grown from last year's levels it also haven't fallen, which many in the industry considered a strong possibility.
Blu-ray in particular has seen a spending increase of around 300% from the first half of last year. It has amounted to more than $200 million in revenue so far this year.

“I think people are becoming pickier on what they spend their money on, but home entertainment always represents a good value,” said Lori MacPherson, general manager for Walt Disney Studios Home Entertainment, North America. “Thirty dollars for a Blu-ray movie that you can watch over and over again is still a great value.”

Despite the positive spin, the same economic factors that make Blu-ray discs a better value than movie tickets or other alternatives put standard DVDs at a similar advantage over Blu-ray. Even people who already own Blu-ray players may not be willing to part with their money to buy hi-def versions of movies they already own on DVD.

The good news is that home entertainment spending typically benefits from consumers having less money for more expensive purchases. The bad news is that a Blu-ray player is a more expensive purchase.

That sort of thinking seems to fit how consumers are spending their money this year. They're buying fewer discs while renting more. And when they do buy it is not typically more expensive new releases. Instead they're buying lower priced catalog titles.

“We’ve seen that the marketplace is holding up better than we thought, roughly flat, and we think it will end the year at about that level,” said Warner Home Video president Ron Sanders. “That is driven principally by catalog, where the value is ringing true in these recessionary times.”

And let's not forget the number of free Blu-ray discs given away with players last year. Just based on that alone you'd expect a major increase in movie sales this year. The bigger question about Blu-ray is whether they can sell players.

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10 user comments

121.7.2008 14:38
blueroad
Inactive

hmm i dunno..i still think the majority that actually own a D player either bought a PS3 or simply doesnt like games or really went in without thinkin and bought one with all the hype around it being the next gen format (not entirely true-more like another high def format as opposed to upscaling or HDDVD which lost the format war) other than that i dont see the average working man goin to spend 200-300$ for a BD player not to mention buying discs for 30$ a piece...you wnna make people buy it? lower the price clean and simple..well clean and simple for the consumer but bad for the production companies..uh well but i guess that the prob now enit? and untill they work out the price im gunna keep working with DVD ..at least its not DRM riddled

221.7.2008 15:39

I only buy Blu-Rays when I can get them for $20 or less. Amazon is a good place to buy. Then I only buy them for certain genres that will actually look good in HD. Mainly action movies.

321.7.2008 17:32

Well, of course gouging on the price of players and discs is going to make them money in the short term.

Charging $300 for a $50 player (and that's being generous) means you don't have to sell many to show quite a profit.

Unfortunately for them, the format will be obsolete by the time they finally get off their greedy a$$es and lower the price to acheive market penetration.

They're totally out of touch.

Serves them right.

422.7.2008 3:09

I think I know what kind of market penetration they are after. Only problem is now most folks don't have the extra cash to pay for it. Don't ya just feel sorry for the execs having to go from a Bentley to a BMW, no pun intended!

522.7.2008 13:27

Quote:
And let's not forget the number of free Blu-ray discs given away with players last year. Just based on that alone you'd expect a major increase in movie sales this year. The bigger question about Blu-ray is whether they can sell players.

i could be wrong but i do believe they were giving away free movies almost the entire time last year so i don't think that is really a determining factor here. it wasn't blu-ray that had the so called firesale last xmas either. i think ps3s market growth is partially responsible for the increase in rev. along with the overall decrease in BR movie prices. i've seen polls and even claims stating around 87% of ps3 owners watching BR movies.

622.7.2008 13:33

“Thirty dollars for a Blu-ray movie that you can watch over and over again is still a great value.”

Huh? Who is she kidding ??

722.7.2008 15:40

Originally posted by gnovak1:
“Thirty dollars for a Blu-ray movie that you can watch over and over again is still a great value.”

Huh? Who is she kidding ??
Seriously!
In a time when going to a first-run movie can cost almost that much, who's going to spend $30 on a rerun? What kind of an idiot would a parent have to be to buy a Disney movie at $30 for BD when they can go to Wal-Mart and get the same film for half of that or less? It's the kids who watch things over and over again, not the adults.

It's not like the kid is going to know the difference.

"Mommy, I find the pixel-blurring in this image distracting and the screen's gamma is off by at least two percentage points."

Right.

It's a safe bet Lori's never had a real job.

822.7.2008 16:02

Quote:
Quote:
And let's not forget the number of free Blu-ray discs given away with players last year. Just based on that alone you'd expect a major increase in movie sales this year. The bigger question about Blu-ray is whether they can sell players.

i could be wrong but i do believe they were giving away free movies almost the entire time last year so i don't think that is really a determining factor here. it wasn't blu-ray that had the so called firesale last xmas either. i think ps3s market growth is partially responsible for the increase in rev. along with the overall decrease in BR movie prices. i've seen polls and even claims stating around 87% of ps3 owners watching BR movies.

My point was that data from last year doesn't count for much since they gave away so many discs. Now if they can make the same claim next year it may be significant.

I generally agree that there's a tie between Blu-ray and the PS-3, although I suspect interest in Blu-ray has fueled PS-3 sales more than the PS-3 has been responsible for Blu-ray popularity. In either case I think it's clear that a growing percentage of PS3 owners are also watching Blu-ray movies.

Another factor that potentially throws a wrench into the works is the escalation of copy protection. If Blu-ray continues to adjust their copy protection to defeat "the pirates" there are bound to be some big problems at some point. Whether its older players that simply can't be upgraded to properly handle some future DRM or simply a bunch of angry consumers who have problems flashing the firmware on their players, it seems likely that something bad will happen eventually.

922.7.2008 20:59

I guess that I am still old school. I think that an upscaled DVD looks just fine. And I am sticking with that for a long time to come.

103.8.2008 22:56
ehofehof
Inactive

Quote:
Quote:
Quote:
And let's not forget the number of free Blu-ray discs given away with players last year. Just based on that alone you'd expect a major increase in movie sales this year. The bigger question about Blu-ray is whether they can sell players.

i could be wrong but i do believe they were giving away free movies almost the entire time last year so i don't think that is really a determining factor here. it wasn't blu-ray that had the so called firesale last xmas either. i think ps3s market growth is partially responsible for the increase in rev. along with the overall decrease in BR movie prices. i've seen polls and even claims stating around 87% of ps3 owners watching BR movies.

My point was that data from last year doesn't count for much since they gave away so many discs. Now if they can make the same claim next year it may be significant.

I generally agree that there's a tie between Blu-ray and the PS-3, although I suspect interest in Blu-ray has fueled PS-3 sales more than the PS-3 has been responsible for Blu-ray popularity. In either case I think it's clear that a growing percentage of PS3 owners are also watching Blu-ray movies.

Another factor that potentially throws a wrench into the works is the escalation of copy protection. If Blu-ray continues to adjust their copy protection to defeat "the pirates" there are bound to be some big problems at some point. Whether its older players that simply can't be upgraded to properly handle some future DRM or simply a bunch of angry consumers who have problems flashing the firmware on their players, it seems likely that something bad will happen eventually.
I don't think I could ever say anything good about Sony.
Not long ago they disabled bitsetting on my VAIO computer's dvd burner with software hidden on a "Free" (giveaway) music disk. Previously the local Sony store demanded a deposit larger than the original Purchase Price of my Super Betamax II, just to remove a tape it ate.
And my understanding is that Sony has the capability to remotely burn-out the eprom (or whatever) on a Blu-Ray player if Sony decides you may have altered the player in any way, or hooked it up in an unapproved configuration.

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