While Blu-Ray's format-war victory was decisive, it still remains clear that the format has a long way to go before it reins supreme over all of home entertainment. According to The Hollywood Reporter, citing research from Redhill Group, Blu-Ray DVD sales have taken over 81% of the high-def market in March, up from just 63% in December, when the format war still waged on. However, while that business is rising, the DVD market in general is slowing.
Citigroup analyst Jason Bazinet stated that the overall DVD sales have been dropping each year since 2006. DVD revenue for just theatrical releases came in at approximately $25 billion in 2006. Last year it dipped to $23.1 billion and this year it is projected to drop even further at $21.4 billion.
"The industry appears to be lowering pricing to keep demand aloft," Bazinet stated in his 2008 forecast.
Bernstein Media analyst Michael Nathanson also concluded that, despite the increasing numbers for BD, the overall demand is rather soft. By the end of 2007, there were 3.5 million Blu-Ray players in American homes and those households had purchased, on average, three Blu-Ray discs. Nathanson stated that, during the same timeframe of standard DVD's adoption, the average household had purchased 30 DVD's.
Nathanson also said that price was a factor and until the BD players drop below $200, which he predicted won't happen until late 2009, the format won't be overly accepted by the masses. He also said that consumers are only upgrading small portions of their libraries to Blu-Ray, favoring action and sci-fi films.
"We have a hard time understanding why consumers will rush out to Best Buy to pick up the Blu-Ray version of Caddyshack or Sleepless in Seattle.