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Hollywood sings the Blu(e)s

November 7, 2008 |  6:00 am

Hollywood is singing the holiday blues.

Several major studios and consumer electronics companies are bankrolling a $25-million marketing campaign this holiday season to promote Blu-ray movie discs.

The commercials will begin airing this month on television shows and cable channels that attract heavily male audiences (the classic technology early adopter), such as Fox's NFL games and ESPN, Comedy Central and the Discovery Channel.  The ad features some of the summer's biggest hits -- including "The Dark Knight," "Hancock" and "Wall-E" -- together with the promise that "all the movies you want will be on Blu-ray high definition ... The best way to watch movies at home, ever."

The launch of the "Tru Blu" promotional campaign underscores the enormity of the stakes for the studios and hardware manufacturers.  The initial format war over which technology would replace the DVD, Sony's Blu-ray or Toshiba's rival HD DVD, confused consumers and kept them from making the   high-def leap.

Meanwhile, DVD sales, long Hollywood's most dependable cash cow, are down 9% this year, according to Nielsen VideoScan. Studios are looking to promote Blu-ray to pick up the revenue slack.

Admittedly, spurring sales of a premium item as the economy spirals headlong into a recession is no small feat. Especially when a new Consumer Reports poll found that 76% of consumers plan to cut back on holiday spending on gifts, travel and entertaining. 

"With the recession, if people splurge, they’re going to splurge on watching movies at home, bypassing other entertainment options," said Ronald Sanders, president of Warner Home Video Inc.  "Yes, there are some challenges, given the recession. By and large, the industry is holding up very, very well."

The industry's stated goals are modest.  DEG: The Digital Entertainment Group, a nonprofit group that promotes digital entertainment, said the entertainment industry expects U.S. consumers will buy 2 million to 2.4 million Blu-ray players this year. That's triple the number sold in 2007.

Studio executives expect sales to be spurred by Black Friday retail promotions after Thanksgiving, featuring brand-name players on sale for less than $200. Analysts consider that price the magic number to fuel consumer adoption, especially among the 47% of U.S. households that already own HDTVs. 

"The price is right where it needs to be" to spur sales, said Craig Kornblau, president of Universal Studios Home Entertainment and Universal Pictures Digital Platforms. "So, I actually am very optimistic."

--Dawn C. Chmielewski

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