Gaining the ground

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Is this the year that Blu-ray makes a big breakthrough and moves from being a high-end enthusiast’s format to a mass market proposition? With prices of Blu-ray hardware already falling, and A-branded Blu-ray players now selling for less than £200 on the high street, it’s easy to see why some in the industry believe the next twelve months will see a big boost in Blu-ray sales.

Market forecasts

But with a sharp downturn in the economy, could Blu-ray sales suffer? Some argue that they could, but others see the current downturn boosting the Blu-ray market. The argument goes that, as money becomes tighter, so consumers reign in their spending, especially when it comes to going out to the cinema or restaurant. Research carried out on behalf of LG found that UK consumers prefer watching movies at home rather than going out. Researchers found that people watched some four films per week, with 71% of those surveyed preferring to watch movies in the comfort of their own homes. So staying in could well be the new going out in 2009.

Blu-ray disc sales are also growing. GfK reports that sales of Blu-ray discs in Europe in 2008 reached 8.1 million units – a three-fold increase on the previous year’s figures. What is more, the UK is easily Europe’s biggest Blu-ray software market with sales reaching 3.7 million units in 2008 – accounting for almost 46% of the European market. One title, The Dark Knight, sold almost 300,000 units (including boxed set sales) in the UK.  Media analyst company Screen Research forecasts UK Blu-ray disc sales reaching 17 million units in 2009, representing 7% of the packaged media market (DVD sales are forecast to be around 241 million units).

Little wonder then, that there is much optimism within the industry as regard to Blu-ray hardware sales. “2009 is expected to be a good year for Blu-ray. Forecasts indicate that the market will continue to significantly increase for the next five years, which will be supported with hybrids including, recorders, home cinema systems, TV combi’s, etcetera,” says Daniel Aziz, LG’s marketing manager.

Rachel Banin, Sony’s home video product manager, says: “It is anticipated that market value will increase with other vendors joining the market and further product propositions evolving, with this, prices are likely to fall encouraging further uptake.  Blu-ray home theatre in-a-box is likely to increase now that the Blu-ray format has been established.” 

Retailers will play a significant role in Blu-ray’s progress says Simon Iddon, JVC’s audio product manager: “We forecast that the Blu-ray market will grow significantly in 2009. Retailers will be driving Blu-ray in-store/online and there will be a larger selection of products for consumers to choose from.”

Panasonic is bullish about Blu-ray’s progress this year, and David Preece, the company’s Home AV product manager, says sales of all types of Blu-ray products (players, portables, home cinema systems and recorders) will reach 1.5 million units this year. Samsung sees player sales alone reaching 600,000 units. Sony’s Banin says her company is expecting the Blu-ray market to experience: “Explosive growth” this year.

Increasing affordability

A number of factors are helping the Blu-ray market, including greater affordability, notes Simon Storey, Samsung’s product manager: “ASPs [average street prices] have dropped in the past year. The average price for October 2008 was £221, compared with £428 in October 2007. In addition, many major retailers are offering extremely attractive bundles with HD-ready TVs and Blu-ray players.” Sony’s Banin points to several factors: “The agreement over a single format has allowed the market to evolve and this is marked by the introduction of Blu-ray home theatre in- a- box solutions and more affordable players.” LG’s Aziz also thinks the ending of the format war has made a big difference to the market: “Industry standardisation of one format suits the end-user, as confusion over hardware and software can be reduced when there is a single format. The film studios are all focused on the development of Blu-ray products, which means a greater variety of choice and content for the consumer.”

JVC’s Iddon says the development of the US Blu-ray market sets the trend for the UK: “Blu-ray has certainly become more affordable in the past year, as more manufacturers enter the Blu-ray market and competition starts to drive prices down. The US is a step ahead of the UK market in terms of Blu-ray penetration and as such we can see trends in the US that will eventually be reflected in the UK. In the US, standalone Blu-ray players are already what we would term as ‘affordable’ and therefore this year may see a similar trend in the UK.”

Widening choice

Another boost has been the sheer range of Blu-ray products and price points on the market. LG’s latest Blu-ray player, the BD370, uses a broadband connection to offer users both access to YouTube videos and the online service BD-Live. The company has also launched the HB954PB and the HB354BS Blu-ray home cinema systems, which include iPod compatibility. Samsung’s BD-P2500 is an interactive player equipped for BD-Live. Panasonic’s offerings include the DMP-BD35 and DMP-BD55 players, and home cinema systems like the SC-BT100, one of the first Blu-ray home cinema systems capable of decoding all Blu-ray audio formats including, Dolby TrueHD and DTS HD Master Audio.

 Sony also offers a wide range of Blu-ray hardware including, Blu-ray players like the BDP-S350, BDP-S550 and BDP-S5000ES. The BDP-S350 is an entry level model, whilst the BDP-S550 offers a fuller spec that includes BD-Live. The BDP-S5000ES is aimed at enthusiasts and offers high quality video processing and high fidelity sound. Sony’s BDV-FS350 is a home theatre in-a-box with 2.1-channel sound, whilst the HTP-BD3IS home theatre system offers surround-sound from golf ball-sized speakers. The BDV-IT1000 home theatre system has a 32-bit digital S-Master amplifier.

JVC proudly notes that its NX-BD3 is the world’s first Blu-ray DLNA-certified 2.1 home cinema system. DNLA is a home networking standard. JVC’s Iddon says: “The Blu-ray market has really started to show significant signs of growth in both player and all-in-one home cinema systems. Obviously, it’s early days for Blu-ray, however, all signs indicate that we can expect the Blu-ray market to develop at a much faster rate this year and onwards. Many retailers are really getting behind Blu-ray and this in turn will drive market growth.”

Selling the benefits

Education is the key to promoting Blu-ray, says Sony’s Banin: “The market has moved beyond the early adopters due to greater public knowledge of the high definition format and greater penetration of HDTV, though there is more work to do in educating the wider public.”  Many consumers are more than happy with the picture quality they get from DVD, so making them aware of the benefits of Blu-ray is key.

“The prices of Blu-ray players are falling, which is making uptake of Blu-ray more affordable,” adds Sony’s Banin, “This is further encouraged by increasing HDTV uptake, with customers looking for content to complement and maximise its performance. Blu-ray also offers an exciting world of interactive and bonus content which was never before possible on DVD. Consumers are looking for even better quality and performance, and it’s becoming more affordable – Blu-ray will rapidly eclipse DVD player sales.”

LG’s Aziz believes the trick is not to pitch Blu-ray against DVD, but to sell it as the next step forward for home video: “Our idea has not been to make DVD redundant but to enhance it. LG’s Blu-ray hardware provides backwards compatibility and the ability to upscale the picture to 1080p, whilst giving the option to experience true high definition with Blu-ray films.”
He adds that Blu-ray offers the finest detail and highest picture available, as well as uncompressed, superior sound, which DVD cannot provide. Panasonic’s Preece thinks this message is getting across to the public: “There has been an increase in people moving towards high-definition viewing and we expect to see Blu-ray increasingly demanded, so that people can enjoy their films in high definition. When consumers are demonstrated the differences between HD and SD sources, they are very clear and easy to understand.”

 JVC’s Iddon thinks consumers can soon grasp the benefits of Blu-ray: “One of the main buzz words in TV is HD. Consumers are becoming more aware of what HD really means with the advent of Sky HD and HD Gaming. DVD offers good picture quality, but it’s no match for a high-definition picture. Also, additional features that Blu-ray can offer through BD-Live will further strengthen the argument for Blu-ray over DVD.”  And as Panasonic’s Preece points out: “There are 13 million consumers out there with HD ready TVs and these people will be looking to enjoy HD content from films also. The HD market is growing and therefore the number of people wanting to enjoy Blu-ray is also growing.” It’s a message that Samsung’s Storey agrees with: “Consumers are beginning to understand the HD message and many are investing in new HD-ready televisions. As the Blu-ray message builds momentum, and the hardware and software continues to become accessible, then customers will see how it can transform how they watch movies in the home.”

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