Analyst Foresees ‘Dramatic’ Drop in Blu-ray Sales

There will be a "dramatic" drop in Blu-ray sales in the fourth quarter of 2008 and beyond, predicts analyst Roger Kay.

The San Francisco Chronicle reports that Kay, president of Endpoint Technologies Associates, believes adoption of the format will be pushed back by "video over cable, satellite and the Internet" long enough to close the window of opportunity for Blu-ray.

Kay believes the current economic woes will continue into 2009, resulting in an even bigger blow to Blu-ray.

"If you can get movies over the wire on demand and have an entire library at your disposal on the screen a la Netflix, that's the way you're going to go," Kay says.

Andy Parson, chairman of the Blu-ray Disc Association (BDA), believes Blu-ray's window of opportunity will be open for several years. He does acknowledge, however, that manufacturers must build more awareness in order to increase volume.

He points out that naysayers also wrote off DVD players, which became the fastest-selling CE device in history, according to the report.

"We're hopeful even though things are getting a little tough out there, economically speaking," said Parsons, also an executive with Pioneer. "Everyone thinks of DVD as an overnight success, but it actually took several years for that overnight success to happen."

Russ Crupnick, an analyst with the NPD Group, says the economic turmoil is causing consumers "to be more selective in their spending." He says this may make consumers more apt to buy game consoles or an HDTV, especially if they feel a DVD player is good enough.

The Entertainment Merchants Association released a study that says Blu-ray will outsell DVD in 2012, adding that nearly 9 million HD discs were sold in 2007. The report shows 12,177 DVDs were released in 2007, down from 13,950 in 2005.

The average price of Blu-ray players dropped 13 percent in the first three weeks of September, according to PriceSCAN.