Analyst Opinion – As much as I hate to admit it, I can’t help but think the era of spinning discs is coming to a close.
With DVD sales hitting a plateau and heir apparent Blu-ray failing to make up the difference, it’s easy to see where this is going. While Nielsen VideoScan First Alert figures for the week of May 24 show year-over-year Blu-ray sales increasing by almost 120%, they don’t make up for DVD’s 13% drop. That’s because DVDs still outsell Blu-ray discs by a wide margin – 6-to-1 if the latest sales figures are to be believed – and Blu-ray sales aren’t expected to pull ahead of DVD for at least another year.
Survey results released by Harris Interactive seem to reinforce Blu-ray’s plight. Of the 2401 people who responded to the poll, 11% said they owned an HD DVD player console. This is pretty remarkable given the fact that HD DVD is a defunct standard whose promotion group was dissolved in March 2008. More disturbing for the winning standard is the fact that only 7% of respondents own Blu-ray consoles.
I’ll reserve detailed discussion on pricing for another day, but until average prices for standalone Blu-ray drives hit the $100 sweet spot – NPD Group says they sold for an average price of $261 in Q1, down 34% from $393 during the year-ago period – most recession-weary consumers will hold on to what little cash they have. The average selling price per disc, which typically runs $5 or $10 more than for a comparable DVD, is also keeping consumers from jumping in with both feet. Sure, high-def always looks better than standard-def, but the difference doesn’t seem to be large enough to prompt consumers to buy in en masse. Not yet, anyway.
As bad things are for Blu-ray in the living room, they’re even worse in the computer market. Blu-ray capability remains relatively scarce in desktop and laptop offerings from vendors at a time when increasingly mobile consumers are tossing optical drives altogether. They’re finicky, power-eating beasts that add weight and complexity to the average laptop. Exploding demand for netbooks and increasingly capable online content delivery thanks to services like Apple’s iTunes and App Store are driving a growing realization that you can be pretty productive – and entertained – without a spinning drive.
Blu-ray will doubtlessly continue to grow in popularity as more of us buy large HD-capable flat screen televisions. In the same vein, it’ll continue to make inroads in computing and video gaming markets. But it’s a case of too little, too late, as long-term trends point to a slower uptake than DVDs ever had. When we can simply download a good-enough copy of a movie from iTunes and save it to a USB drive or mobile device for viewing pretty much anywhere, why would we even bother with a power-hungry, noisy, expensive and frankly inconvenient disc in the first place?
By the time most consumers have asked themselves this question, the answer will already be in: Optical discs are a fading technology, and investing in them now could be a shorter-term move than you might have initially anticipated.
Carmi Levy is a Canadian technology analyst and journalist covered with scars from his years leading IT help desks and managing software development projects for big bad insurance companies. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.