While the popularity of Blu-ray is on the rise, this high-def format hasn't been able to make up for declining DVD rentals and sales. According to a study by Screen Digest, global revenues dropped by 4.8% in 2008, resulting in a loss of $2.6 billion. Also, due to the current economic climate, Senior analysts at Screen Digest also don't expect Blu-ray to drive even minimal sector growth until 2010.
The global video business lost more than $2.6bn in 2008 due to a combination of a fall in both DVD purchase and rentals by consumers. The figure, which equates to a downturn of 4.8 percent globally, is published in the latest report from Screen Digest (www.screendigest.com). Whilst the decline in North American DVD sales is well documented, the decline in international markets (global excluding North America) has received less coverage.
Internationally last year consumers spent $26.4bn on video software, with two thirds of that figure ($18.1bn) spent on buying DVD discs. The overall figure represents a 3.6% drop on 2007 spend and a 4.7% drop on disc sales alone. The sales figures are in line with the overall trend which saw consumer spending plateau between 2004 and 2007 and the North American market starting to decline in 2007 which signalled the start of a global downward trend.
The high definition Blu-ray format was heralded by the industry as the answer to the decline of DVD. However the format war with Toshiba's HD DVD meant that the strong unified marketing that had worked so successfully for DVD's launch a decade earlier was not replicated. This coupled with a worldwide recession in consumer spending and the easy availability of video via other means such as downloading, pirate, legal and illegal temporary ownership, ensured that despite strong sales of BD in 2008 of $482m, they barely made a dent in the missing revenue.
Helen Davis Jayalath, Senior Analyst at Screen Digest says "We expect Blu-ray to account for 6.9% of international video spending this year – assuming there is strong promotional activity. However, despite consumers' interest in the high definition format and demand for packaged media, the current challenging economic climate means that we don't expect BD to be driving even minimal sector growth until 2010."
