More on Blu-ray in a recession – forecast down 25%

October 23, 2008

According to this article from Jacqueline Emigh at BetaNews, Parks Associates (technically a competitor, but a respectable one so I’ll give them their props) has reduced its forecast for standalone Blu-ray players this year to to 4.3 million globally or 2.2 million in the US.

This comes as I’ve been writing about Blu-ray prices falling to $199 for the first time and the economy’s effect on home video overall. First of all, I’ll say that Forrester has never produced a forecast for standalone Blu-ray players so I’m not in a position to comment on the specific number, however it is interesting to note that this new forecast puts the Parks number in line with the Jupiter Research number from earlier this year. (Jupiter Research, as you may know, was a competitor until just a few months ago, we now are one family, which is great as they are some smart folks.) Jupiter had predicted approximately 3 million total Blu-ray homes in the US by the end of this year, on top of just under 1 million last year, which comes out to something north of 2 million in sales this year. So the new Parks numbers line up with the Jupiter numbers. I’m inclined to believe both. (It is important to note that both these numbers are far short of the projections Blu-ray manufacturers are working from.)

The most interesting question is whether PS3 will now have a more cannibalistic effect on standalone Blu-ray sales or less of one. 

The thinking goes like this: PS3s used to be the cheapest way to get a Blu-ray player, and it also happened to play games. However, now that Blu-ray standalone players are so cheap, that is no longer the case. Is it possible that people will postpone PS3 purchases in favor of a $199 Blu-ray player, thinking they can upgrade to the PS3 when the economy improves? or will they instead go from standalone players, spend a few extra bucks to get a PS3, and pat themselves on the back for getting a system that can do gaming and video?

I doubt either will occur, actually. Instead, people in the market for the PS3 will still get one, possibly with fewer accessories, but they weren’t in the market for a standalone player anyway so the effect is not cannibalistic. People in the market for a standalone Blu-ray player will do one of two things: either move downmarket to a $199 or $229 model or just postpone the purchase for next year, assuming that prices will only go lower. In the meantime, the upconverting DVD player they bought last year for $50 will do them just fine.

What are you going to do? Did you plan to buy a Blu-ray player or PS3? What will you do now?

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Dow down 18% in one week — what does this mean for video?

October 10, 2008

I’m busy working on a piece for Forrester about what a down economy does for video. I’ll be finished next week and can share more then, but in the process of speaking to people in the industry, I came across a bright spot, at least as Simon Fleming-Wood, VP of Marketing for Pure Digital, the maker of the phenomenal rags-to-riches Flip digital video cameras. In a recent conversation, I broached the topic of a down economy and mentioned that while many were optimisitc about the future of free services like online video (for obvious reasons), some are nervous about the prospects for devices this holiday buying season. But Simon isn’t seeing it:

We are cautiously optimistic.  Our retail partners have increased their forecasts for sales of our products over the last 3 weeks. The President of the United States went on television in an unprecedent event to tell the nation that we were in an economic crisis. Yet our sales went up that week.

Bully for Pure Digital. It helps that the Flip cameras are positioned as low-cost digital video cameras, of course. I don’t imagine Sony and Canon are as sanguine about their prospects this quarter. But it goes to show that even in a down economy, the right product targeted at the right market with the right features can succeed.

What do you think? Are you afraid for any particular products or services? Will premium cable channels suffer? Will that 2nd DVR get postponed to next year? Will Hulu.com take over the world with its free content?

Tell me what you think will happen or what you are doing personally. For example, I’m cutting back on premium movie channels (that I don’t watch enough anyway). What about you?


Blu-ray Association optimistic about holiday sales, hmm…

October 9, 2008

As described in this short bit from PocketLint in the UK, Blu-ray Association members think Q4 is going to be great, better than expected.

The evidence is that Blu-ray titles are reportedly selling 4x better now compared to the same time last year. Lessee, a year ago, Blu-ray still had a competitor, namely HD-DVD. It still only had a relative handful of movie titles to sell. And the PS3, still the dominant Blu-ray player, was only in a few million homes. Those constraints are fading.

If we’re only selling Blu-ray discs at 4x better than last year, that’s not exactly a sign that Blu-ray has gone mainstream.

Don’t get me wrong, as I have said before, I’m a fan of Blu-ray. Menus that overlay the screen, higher resolution — I love all of it. But in a down economy, a $67.54 1080p DVD upconverter at Wal-mart is an easy choice to make over Blu-ray. In this economy, I expect Blu-ray to take a hit. Taking a hit means not growing as fast as you otherwise would have, so it’s hard to say what that translates into over time, but it certainly means that the highest-end players will sit on shelves longer, discount pricing will be more aggressive toward the end of the year, and people who have a Blu-ray player will likely favor renting over buying, even with Netflix’s $1 a month charge for unlimited Blu-ray rentals.