Analysts: Blu-ray to Overtake Digital Distribution
2009 may be the year of the Blu-ray.
According to HomeMedia, Blu-ray media sales will overtake digital distribution in 2009. The high definition media is expected to see a 150 percent increase in sales over 2008, from $1.1 billion to $2.9 billion.
Despite the recent success found in digital distribution, packaged media is still the powerhouse force, with DVD leading the way followed by its younger but bigger brother Blu-ray. So what is holding digital distribution back? Bandwidth. “The bandwidth required to stream any type of HD video is way beyond what most households have,” says In-Stat analyst Michael Paxton. “The convenience factor is still not there for streaming media, unless you are watching on a laptop and it is the only option you have. The packaged media business model is one that the consumer is very comfortable with.”
While Blu-ray is expected to see a sharp increase in sales, is it really as strong as some believe? For now, Blu-ray is number two because the U.S. lacks the proper broadband infrastructure to support a massive surge in streaming HD content. If America had the bandwidth capabilities of say, South Korea, streaming HD would be a reality for many. Also, with the economy in its current state, many pressed for cash may not be drawn to Blu-ray.
That said, Blu-ray is dropping in price. The average price for movies on the HD medium dropped 14 percent in Q4 of 2008. However, that drop still leaves the average BD movie price at a very high $28.93, more than thirteen dollars over the price of a DVD, which comes in at $15.74. But, like any media, prices will continue to drop. So what's a movie buff to do? Compromise! While films like Iron Man and The Dark Knight are certainly worth the Blu-ray premium, leave the comedies and "chick flicks" on DVD. Are Superbad and Sex in the City going to be that much better in 1080p? Didn't think so.
For those who live and die by streaming HD content - don't fret. Netflix is still going strong on streaming content. Also, the same analysts who see Blu-ray coming in second in 2009 also see digital distribution representing 15 percent of the market by 2013.