First the bad news - the U.S. economy ain’t all roses lately. The good news? Home entertainment spending is rolling right along with over $6 billion spent on DVD on Blu-ray discs alone. Add in rentals and that number climbs to over $10 billion. That’s quite a relief for industry execs who had braced themselves (and the Blu-ray format) for a rough ride through 2008.
Why the success? Experts suggest that given the high cost of going out (dinner, drinks, movies) the home theater experience has become more attractive and certainly more frugal. “It’s a bit reminiscent of the last recession during the ’90s, when consumers were also not going out as much and wanted a home entertainment experience,” says Craig Kornblau, president of Universal Studios Home Entertainment. “I think it’s extraordinary that the business is holding up this well, given how much of consumers’ dollars are being sucked up by increases in gas and food.”
Lori MacPherson, general manager for Walt Disney Studios Home Entertainment, North America adds “I think people are becoming pickier on what they spend their money on, but home entertainment always represents a good value. Thirty dollars for a Blu-ray movie that you can watch over and over again is still a great value.”
I could argue the $30 price point, and i suspect most consumers would agree that $15-20 would be a better sweet spot for our wallets. However, Blu-ray is gaining ground and many consumers are obviously comfortable with the current pricing, players included. According to Mike Dunn of 20th Century Fox Home Entertainment, “We are trending 8% Blu-ray sales [per title], and at the end of the year, we will be between 10% and 12%.”
He added retailers are expanding their Blu-ray shelves without eliminating standard DVD inventory and noted that market has widened 5% in the last year over the same period the prior 12 months. Indeed, Dunn’s estimates ring true as Blu-ray sales (discs) generated more than $200 million in the first half of this year - a 300% increase over this point in 2007.
The future of Blu-ray has been beaten every which way but loose here on EH, but regardless of format preferences, it’s notable that the new kid on the media block has done so well in such a hostile environment.
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