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Blu-ray’s Gain May Be Format’s Loss, Analyst Says

Jan 24, 2008  •  Post A Comment

While Blu-ray high-definition DVD players may be beating out the competing HD DVD format, the cost difference between Blu-ray and standard DVD players remains an impediment to wider adoption, one industry analyst said.
Blu-ray gained ground thanks to holiday promotions and Warner Bros.’ recent decision to support the Sony high-definition DVD player format. But Blu-ray is more expensive than HD DVD, which may dissuade some consumers from upgrading to high definition, said Paul Erickson, director of DVD and HD market research for NPD unit DisplaySearch.
Blu-ray saw its market share for units sold jump to about 60%, compared to 40% for Toshiba-led HD DVD, in December, according to Fort Washington, N.Y.-based NPD Group. Sony boosted promotions for the holiday season while retailers such as Amazon.com and Best Buy cut prices for entry-level Blu-ray players to less than $300 for the first time.
Meanwhile, for the second week of January, Blu-ray’s share of sales surged to more than 90%, up from an almost even split with HD DVD for the first week of January, NPD said.
Warner Bros. on Jan. 4 said it would start exclusively backing the Blu-ray format starting in June.
“Despite the fact that HD DVD was soundly beaten in December, it bounced back” in early January, said Paul Erickson, director of DVD and HD market research for NPD unit DisplaySearch. “But the Warner impact was significant.”
Paramount Pictures hasn’t said whether it is going to switch formats, while Universal Studios executive vice president Ken Graffeo said this week in an interview with BetaNews that the company had no plans to change allegiances. (Graffeo is also co-president of the HD DVD promotional group.)
Regardless, with entry-level Blu-ray players selling for more than double the price of the cheapest HD DVD players, customers may forgo the upgrade and keep their standard-definition players because the price jump to Blu-ray is larger than the HD DVD upgrade.
“Last weekend, some Philips entry-level DVD players were selling for $59. To step up from that to HD DVD is not too bad,” Mr. Erickson said. “Your average person isn’t going to jump at hi-def when the players are five times more expensive.”
Blu-ray’s jump since December represents almost a market-share reversal from the first year and a half that both next-generation formats were on the market, as HD DVD’s lower prices lured more customers while many studios released films in both formats. From April 2006 to October 2007, HD DVD made up about 54% of next-generation DVD player units sold while Blu-ray had about 44% of the market, according to an earlier statement by NPD. Dual-format players represented the remaining 2%.

3 Comments

  1. This article doesn’t do much to clear up the mystery of what is “HI-DEF” and what is not.
    The implication is that “HD-DVD” is not ‘HI-DEF’ while “BLU-RAY” is.
    Didn’t we learn ANYTHING from the Betamax debacle?
    Come on — let’s try to shake down this techno-battle to a single format and go with it!

  2. The cost difference really doesn’t matter because once there is one true standard, the cost will plummet. Look at DVD players; you can get one for 20 or 30 bucks. The cost will come down, but not until the HD-DVD standard (really just a souped-up DVD0 is allowed to die a peaceful death.

  3. This article is just silly.
    While Blu-Ray costs more than DVD, when DVD took off, the average DVD player cost more than the average Blu-Ray player costs today, around $350-$400.
    While you won’t find a BD player on the shelf at your grocery store for $50 like you will a regular DVD player, the price didn’t stop the adoption of DVD and it won’t stop BD, once people see the quality difference.

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