New Format War Status: Blu-ray Now at 10% Market Share

[Woochifer]

Now that HD-DVD is out of the picture, the more formidable (and less certain) format war is now in full swing -- Blu-ray vs. DVD. And Nielson Videoscan has begun tracking the Blu-ray unit sales against the DVD sales. On The Digital Bits' front page, this now replaces the line that used to update readers on HD-DVD's market share versus Blu-ray.

For the week ending June 1, Blu-ray now has a 10% market share with DVD at 90%. IIRC, this is close to the DVD format's market share against VHS at a similar juncture in early-1999. (DVD did not hit 25% market share until 2001, and didn't surpass VHS until 2003.)

Even though the VHS market was tabulated somewhat differently (due to the revenue sharing arrangements the studios had with the major video chains, and the rental pricing windows), this is still a pretty impressive market gain by Blu-ray less than two years in, and with hardware prices still hovering around the $400 mark.

It will be interesting to see how these market share figures change once the price points on Blu-ray players drop closer to $200. It was only when that occurred that the DVD format's market share began to grow rapidly.

[nightflier]

While I'm sure the numbers are much smaller, it would also be interesting to see the growth of video-on-demand and downloaded movies in relation to disk sales.

[Sir Terrence the Terrible]

While I'm sure the numbers are much smaller, it would also be interesting to see the growth of video-on-demand and downloaded movies in relation to disk sales.

In all of last year both VOD and Downloading netting the studios just $123 million, down from 2006 $200 million. In 2007 Bluray made the studios a over $300 million dollars, up signficantly from 2006 revenue. It reached $300 million in revenue this year at the end of April.

[bobsticks]

In all of last year both VOD and Downloading netting the studios just $123 million, down from 2006 $200 million. In 2007 Bluray made the studios a over $300 million dollars, up signficantly from 2006 revenue. It reached $300 million in revenue this year at the end of April.

So you're saying we all need to band together to support our brothers in Video On Demand? You're saying downloading video via the net results in a greater quality product than conventional "hard" media? This is a big turn for you T...

[Sir Terrence the Terrible]

So you're saying we all need to band together to support our brothers in Video On Demand? You're saying downloading video via the net results in a greater quality product than conventional "hard" media? This is a big turn for you T...

Well Sticks, Nighliars argument that bluray players were going to increase in price if a shipment went down in Davie's locker convinced me that downloading was the only way to go. His prediction that HD DVD was going to triumph bluray convinced me that media on disc is just outdated. Low quality images, and highly compressed audio is the way to go man. Git on board sticks.

[Rich-n-Texas]

All's I know is, right now it's a feeding frenzy for the PS3/MGS4 bundle. Apparently Amazon had them in stock on Friday and not only did they sell all of them in 7 minutes, but the demand took their site down. Watch for a very big spike in PS3 sales on Thursday, and then a big ripple effect in BD movie sales shortly thereafter.

[Mr Peabody]

Does VOD/PPV or download really compete with disc sales or is it more accurate to track how it does against video rentals either over the counter or via mail?

[bobsticks]

Does VOD/PPV or download really compete with disc sales or is it more accurate to track how it does against video rentals either over the counter or via mail?

I would imagine that it cuts into both though probably more heavily into the rental market. Once VOD gains enough bandwidth to offer a product similar in the quality/utility aspects it will probably impact discs more if only because on-the-fence collectors will be able to preview purchases first, only to realize that no matter how great the HiDef picture is titles like "The Wonder Years:The Movie" suck.

[kexodusc]

My gut tells me the business model for VOD isn't as attractive as BluRay from the studio's perspective.
There studios don't make as much $$ per title sold as they would a BluRay, mostly because the cable companies have to take their pound of flesh to support the infrastructure (which aint' cheap) and pad their wallets to boot. VOD offers inferior quality at approximately equal or higher pricing to Blockbuster/rental options. The convenience factor is overrated, and not fairly priced IMO.

[Feanor]

My gut tells me the business model for VOD isn't as attractive as BluRay from the studio's perspective.
There studios don't make as much $$ per title sold as they would a BluRay, mostly because the cable companies have to take their pound of flesh to support the infrastructure (which aint' cheap) and pad their wallets to boot. VOD offers inferior quality at approximately equal or higher pricing to Blockbuster/rental options. The convenience factor is overrated, and not fairly priced IMO.

I know diddly-squat about VOD though it might available to me from my satelite service, (Bell ExpresVu). The concept offends me that I should get less quality for more money even if the process is more convenient.

Backward as I am, at my place we watch movie rentals at the rate of perhaps one a month; we end up buying more than that many, all on DVD of course.

There is an analogy to MP3 downloads. You can count the number of MP3s I've downloaded on the fingers of one hand. Why would I pay a buck or $1.40 for 320kpbs (or whatever it is these days) when I buy the CD or SACD for less money?? (Granted as a classical listener, I'm usually interested in the whole album.) I'm not opposed to downloads in principle, but I refuse to pay more to get less.

Considering the undoubted logistical cost of physical distribution, the fact that physical media is actually cheaper than download content indicates to me that that the price of the latter is an outrageous ripoff. It's not bait for this sucker.

[GMichael]

Looks like BR is progressing at a good rate. Downloading may take a bite out of the market, but not much more than renting does to DVD's now, IMO. Most likely that downloads will hurt Blockbuster more than it will hurt BR.

[Rich-n-Texas]

Haven't we spun this VOD vs BD topic through the wash cycle, rinse cycle, wash cycle, rinse cycle enough yet?

[filecat13]

Let's put it in the dryer at high heat. Maybe it'll shrink.

[filecat13]

For the week ending June 1, Blu-ray now has a 10% market share with DVD at 90%. IIRC, this is close to the DVD format's market share against VHS at a similar juncture in early-1999. (DVD did not hit 25% market share until 2001, and didn't surpass VHS until 2003.)

I wish I knew 10% of what. I couldn't see how to get any raw numbers to compare. Percentages tell part of the story; volume tells another.

[nightflier]

In all of last year both VOD and Downloading netting the studios just $123 million, down from 2006 $200 million. In 2007 Bluray made the studios a over $300 million dollars, up signficantly from 2006 revenue. It reached $300 million in revenue this year at the end of April.

That's all fine, but I'd like to see unit sales as opposed to profits. That would be a much more interesting indicator.

Likewise, it's one thing to look at VOD/downloading compared to disk today, but the more interesting thing to watch will be how these figures change over time.

[Sir Terrence the Terrible]

That's all fine, but I'd like to see unit sales as opposed to profits. That would be a much more interesting indicator.

Actually nobody cares about unit sales, they care about profit. The engine that drives the manufacturer is profit, not unit sales. That is the bottom line here. You can rent a billion downloads, but if that is less profitable than selling 1 million disc, then the unit amount is useless.

Likewise, it's one thing to look at VOD/downloading compared to disk today, but the more interesting thing to watch will be how these figures change over time.

Time has not been all that friendly with VOD and downloads. It has taken 10 years for VOD and downloads to reach a billion dollars in revenue. Bluray player manufacturers did 4 billion last year alone. VOD has never done anything close to $300 million in revenue, bluray disc sales did it last year alone, and has already reached $400 million in revenue so far this year. Absolutely NOBODY who knows the FILM and VIDEO industry(as opposed to a computer analyst trying to figure out film and video) believes that downloading or VOD will effect bluray sales. Downloading to own is a non starter as five companies have already gone under trying digital sell through. Rentals do not effect sale through as illustrated by DVD sales against VOD and downloading. Netflix says its disc rental business is doing extremely well, and its downloading is slowly growing, but still at nowhere near the levels of disc rentals.

If trends continue the way they have, VOD and downloads will be left in the smoke by bluray, just like it was with DVD.

[Sir Terrence the Terrible]

I wish I knew 10% of what. I couldn't see how to get any raw numbers to compare. Percentages tell part of the story; volume tells another.

It is 10 percent of the overall disc market. In terms of volume, bluray has sold 11 million disc to date here in the states about two years after format launch. DVD at two years was about 8 million disc.

This 10 percent is cross the board, with some bluray titles selling as high as 25 percent of disc sales(3:10 to Yuma is one)

[Sir Terrence the Terrible]

Haven't we spun this VOD vs BD topic through the wash cycle, rinse cycle, wash cycle, rinse cycle enough yet?

Yes, and I am willing to bet you good money this one will spiral out of control like the last ten discussions on this subject. Its what happens when you have some no nothings who think they know it all.

[Sir Terrence the Terrible]

My gut tells me the business model for VOD isn't as attractive as BluRay from the studio's perspective.
There studios don't make as much $$ per title sold as they would a BluRay, mostly because the cable companies have to take their pound of flesh to support the infrastructure (which aint' cheap) and pad their wallets to boot. VOD offers inferior quality at approximately equal or higher pricing to Blockbuster/rental options. The convenience factor is overrated, and not fairly priced IMO.

Bingo!

The last BR seminar I attended, they released a study that actually blew my mind. It takes more energy(about 200 times) to support downloads than it does to replicate a disc run of a major titles. It seems the servers, server maintaince, air conditioners, repair, storage costs are not only energy hogs, but financial hogs as well.

[filecat13]

It is 10 percent of the overall disc market. In terms of volume, bluray has sold 11 million disc to date here in the states about two years after format launch. DVD at two years was about 8 million disc.

This 10 percent is cross the board, with some bluray titles selling as high as 25 percent of disc sales(3:10 to Yuma is one)

Thanks. That is indeed far more informative that the % alone.

[pixelthis]

All's I know is, right now it's a feeding frenzy for the PS3/MGS4 bundle. Apparently Amazon had them in stock on Friday and not only did they sell all of them in 7 minutes, but the demand took their site down. Watch for a very big spike in PS3 sales on Thursday, and then a big ripple effect in BD movie sales shortly thereafter.

THERES ALL KINDS OF DEALS.
Target has one, 399$, and a fifty dollar gift card when you buy two movies.
Toys r us, 450 for a player, a game a movie, and accesories.
AND of course wallfart

[Woochifer]

I wish I knew 10% of what. I couldn't see how to get any raw numbers to compare. Percentages tell part of the story; volume tells another.

That 10% refers to percent of total disc media unit sales (as indicated in the first paragraph), since the DVD format takes up the other 90% and the figures do not include any other home video markets like VOD, PPV, and broadcast revenue. Nielson Videoscan only releases the raw numbers to their subscribers, which includes every major studio and retailer. The figures that Nielson releases to the public have always been based on % of overall unit sales, and relative % of comparative unit sales. It doesn't include the total units, which you would need in order to calculate the volume per title.

At the height of the HD-DVD/Blu-ray format war, posters on the AVS Forum and High Def Digest put together a consensus chart that tracked the weekly market share and estimated sales volume by pulling together all of the available data sources, including Nielson, NPD press releases, and press blurbs that came from Sony, Disney, DVD Forum, Toshiba, and others. Occasionally, one of the major studios will release its own internal data compilation that reveals more about the actual sales for individual titles, and those consensus estimates would get recalibrated based on the best available sales volume data. I would guess that posters on those forums have already begun tracking the unit sales for Blu-ray versus DVD, since there's actually more information out there on DVD sales.

[Rich-n-Texas]

THERES ALL KINDS OF DEALS.
Target has one, 399$, and a fifty dollar gift card when you buy two movies.
Toys r us, 450 for a player, a game a movie, and accesories.
AND of course wallfart

These aren't the same thing. The one that gets released on 6/12 is 80 gig, backwards compatible, includes controller and MGS4.

[nightflier]

Actually nobody cares about unit sales, they care about profit. The engine that drives the manufacturer is profit, not unit sales. That is the bottom line here. You can rent a billion downloads, but if that is less profitable than selling 1 million disc, then the unit amount is useless.

Well I would say that this view is rather narrow minded. I think people do care about unit sales and frankly I think that's the only way to compare disk sales with downloads, since we can't really determine the real value of a digital download as it is rather intangible. Profit may be what drives manufacturers, but it is not what drives consumers. If they see that downloads are increasing in number, they will take this as a sign that this part of the industry is growing and worth taking part in, regardless of what the manufacturers may be doing. I think that unit sales are a key difference in understanding what is really happening in this industry.

Anyhow, let's keep this civilized, lil'terry. I'm not attacking you, I'm questioning the analysis you've provided.

[pixelthis]

These aren't the same thing. The one that gets released on 6/12 is 80 gig, backwards compatible, includes controller and MGS4.

A firebird, a honkin big amp, and now your PS3 has to be 80 gig.
not "compensating" are we?
True these sales are basically pushing the "old " model out the door.
SO WHAT?
40 gigs is plenty.
What are you gonna do with 80 gigs?
My entire music collection in lossless fits on 30 to 40 gigs.
A great way to save a few bucks if you dont worry about those extra 40 gigs, which you can get along fine without