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Blu-ray Market Share...Drops?

Sales data from Nielsen VideoScan found Blu-ray's share of the video disc mark actually dropped during the week ending September 14. When competing high-definition disc format HD DVD threw in the towel in early 2008, most industry watchers were expecting a surge of consumer interest in Sony's victorious Blu-ray format. Now that the battle was over, market watchers reasoned, consumers would flock to the high-definition world, assured that their movie purchases would be compatible with future gear for a long time to come.

Except it hasn't happened, at least not to the degree industry watchers expected. Several factors play into consumer's less-than-enthusiastic embrace of Blu-ray, including a general economic downturn, Blu-ray gear hanging on to comparatively high prices, and consumers turning to alternative sources of HD content like high-definition cable, satellite, and download services. Also factor in increasing quality (and affordability) of upscaling DVD players, and many consumers just don't feel the urge to dive into Blu-ray.

Now, new numbers from market-watcher Nielsen VideoScan finds that Blu-ray's share of the video disc market actually dropped during the week ending September 14, declining to an even 8 percent of the overall market. (Yes, the rest of the market is standard DVDs.) The drop represents a proportionate 13.4 decline over Blu-ray's showing the previous week.

Earlier this year, Sony executives predicted Blu-ray sales would account for as much as 50 percent of the home video disc market by the end of 2008. However, now industry experts believe Blu-ray won't have much of an impact on the overall market during 2008, barring extraordinary price cuts and consumer interest during the upcoming holiday season.

Blu-ray Disc Association says it’s too early to lower prices

So the Blu-ray disc is the only physical high-definition format left in the market, but that isn’t going to translate into lower prices any time soon, according to Andy Parsons, the Chairman of the Blu-ray Disc Association. Parsons, who is also the senior VP of Advanced Product Development at Pioneer Electronics, told attendees at the DisplaySearch/NPD HDTV conference in Los Angeles that Blu-ray volume needs to increase before content makers and set-top makers can cut prices.

Parsons was speaking as part of a panel on high-definition formats and told the audience that Blu-ray hardware and disc prices are behaving the same as when DVD players were first getting popular. “There’s not enough market [volume] to lower the price,” Parsons said, adding that companies have to build “awareness and demand for the technology," before prices can decrease.

In terms of market volume, DVD players and discs still rule the market and Blu-ray is being sold at a premium (relatively speaking). The cheapest BD player is currently selling for approximately $230 with many players still selling for $300 to $600 dollars. DVD players in contrast are almost give-aways these days, costing less than $100. Blu-ray movies often sell for $25 and up while DVDs can easily be bought for $20 and under. But Parsons points out that DVD didn’t start out at $49, adding, “people complained about it [pricing] back then too.”

Even though Blu-ray easily fought off HD-DVD, Parson admits the format isn’t going to get a free ride from consumers. Digital downloads will be a worthy threat to Blu-ray, but he says people understand packaged media better and that consumers want something that, “they can hold in their hands”. Furthermore, Parsons believes packaged media will remain the dominant format.

But in the end, DVDs could be the biggest threat to Blu-ray. According to Danny Kaye, EVP of Global Research and Technology Strategy at 20th Century Home Entertainment, don’t count the standard definition disc out just yet. “We buried DVD long before its time … it’s going to be a long time before it dies,” he said.

LG Electronics' BD300 Network Blu-ray Disc Player Available This Fall at National Retailers

LG Electronics today announced the nationwide availability of the BD300 Network Blu-ray Disc Player, featuring unparalleled access to disc-based and networked home video entertainment. The BD300 is the world's first Blu-ray disc player that instantly streams movies and TV episodes from Netflix (subscription required and sold separately).

Available next month, the LG BD300 Network Blu-ray Disc Player will be offered at national retailers such as Best Buy and Circuit City, and specialty retailers nationwide at a suggested retail price of $399.95.

"At LG we considered what, when and how consumers want to watch movies and television episodes. The result is the ultimate convergence of home theater entertainment and functionality," said Allan Jason, vice president of sales and marketing for Digital Media/New Products Division at LG Electronics USA. "With intelligent features and access to an ever-growing library of movie and television titles, the BD300 is the next step in a truly personalized entertainment experience."

Consumers are constantly seeking new, faster ways to find and customize content for their home entertainment experience. According to JupiterResearch, an estimated 46 percent of U.S. households will own at least one Blu-ray-capable device in the next five years. Additionally, a report from Centris indicates almost 40 million households purchase paid content; 80 million have access to pay-per-view and 27 million use DVRs. To meet this growing interest in content on-demand, LG's BD300 Network Blu-ray Disc Player revolutionizes the home entertainment experience by providing exceptional audio-video performance, access to a fast-growing library of high-quality Blu-ray discs, up-scaling of standard DVDs to 1080p, and unprecedented instant access to content from Netflix.

The BD300 enables movie enthusiasts to take advantage of advanced technologies such as BD Live which offers a wide variety of content, such as movie scene extras, new previews and the ability to read synopses and rate movies. Also included is BonusView which provides picture-in-picture access to Blu-ray disc special features allowing consumers to toggle between their favorite movie scenes and bonus features on the disc.

Consumers will also enjoy the BD300's ease of operation for instantly watching movies and television episodes from Netflix. The BD300 instantly streams movies and TV episodes Netflix members place in an "instant Queue" from more than 12,000 choices available at the Netflix Web site. Netflix members access this feature directly from the on-screen menu and simply select the movie or TV episode from their instant Queue to watch in as little as 30 seconds with no personal computer needed. The BD300 enables fast-forwarding and rewinding of the video stream from Netflix, or simply stopping it to resume watching at a later time.

Uncompromising in style and performance, the BD300's glossy black paneling and elegant, easy-to-use backlit touch sensor buttons are modern additions to any home theater system. Even standard DVDs get the royal treatment with the BD300's ability to take standard definition formats and upscale them to 1080p. The BD300 also includes advanced audio format decoding such as Dolby TrueHD / Digital Plus and DTS-HD Advanced Digital Out for a crisper, clearer auditory experience.

Consumers will appreciate the USB Media Plus function which allows for the playback of their favorite photos, music and video files from a USB drive directly to their TV screen. To further personalize and simplify the home theater experience, the BD300 includes LG. impLink(TM) technology, which gives consumers the ability to control similarly equipped LG products via convenient on-screen menus or directly from the product itself.

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