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Blu-ray making up for only some of the drop in DVD sales

June 8, 2011 | 10:38 am

The number of Americans buying movie discs dropped 9% from 2009 to 2011, but would have fallen more dramatically without the growth in high-definition Blu-ray discs, according to a new report.

In total, 116 million Americans are estimated to currently buy movies on DVD or Blu-ray, according to the NPD Group, down from 128 million in 2009. However, 26 million of those people are buying discs on Blu-ray, which are more expensive for consumers and more profitable for makers than standard DVDs.

The percentage of the population who are buying Blu-ray discs jumped from 9% in 2010 to 15% in 2011, according to two online consumer surveys conducted by NPD.

"While Blu-ray may not be the replacement for DVD that many once hoped for, it is certainly adding strength to the physical video-disc market," NPD entertainment industry analyst Russ Frushtick said in a statement.

The report did not include any data on digital distribution, a market that is also growing and helping to make up for some, but not all, of the downturn in DVD sales and rentals. A recent study by IHS Screen Digest said that Internet purchases and rentals of movies jumped 38% in 2010 to $385 million.

However, it did say that 50% of people who intended to buy a Blu-ray player were interested in part because many such devices also provide access to "subscription video download services" such as Netflix.

Also helping is that Blu-ray players and discs have been falling in price. "The fact that prices are now within the budgetary range acceptable to rank-and-file consumers is helping bolster the overall value proposition of the Blu-ray format," Frushtick said.

The NPD analyst also noted that the downturn in movie disc sales during the first three months of 2011 was magnified by a lack of popular movies, as indicated by soft box-office returns for the industry in the fall of 2010.

That drop was indicated in financial results for two studios. Universal Pictures' home entertainment revenue fell 24% in the first quarter of 2011, while Walt Disney Studios reported a 14% drop.

-- Ben Fritz


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