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  1. #1
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    Default Futuresource Consulting: Blu-ray to Top 50% of sales by 2014, OD still $33B 72% share



    Report: Blu-ray to Top 50% of Video Sales by 2014




    6 Jul, 2011
    By: Erik Gruenwedel

    Packaged media sales holding ground against rental and encroaching digital content in video, games and music

    Blu-ray Disc movies and related content will represent more than 50% of packaged media sales in 2014, according to a new report.

    London-based Futuresource Consulting said the high-definition format would generate 70% of disc spending by consumers, compared with 13% in 2010, spearheaded by discounted rentals (kiosks and Netflix).

    The report projects continued interest by consumers in owning packaged media, compared with rental and digital.


    “In 2010, packaged video generated $42 billion globally, and although decline is apparent in the video industry, packaged [media] will continue to produce significant revenues in the coming years with spending still at $33 billion in 2014, and accounting for 72% of total consumer spend,” said Mai Hoang, senior analyst with Futuresource Consulting.


    Indeed, the resurgence of rental since last year remains a regional phenomenon, globally speaking, with more than 50% of consumers renting movies in Japan (less so in North America), compared with just 10% in Western Europe.

    While Blu-ray continues to gain traction, it will not be enough to compensate for the decline in DVD, according to the report.

    As a result, growth in home entertainment will come from digital distribution, including transactional video-on-demand and subscription VOD. Key challenges for digital video include the wide availability of related online content, in particular user-generated free content and the ongoing consumption of illegal video.


    “An estimated 400 billion videos were watched online last year in the U.S., most of which were viewed for free via services like YouTube and Hulu,” Hoang said. “In Western Europe, paid online video accounted for just 2% of total video spend and 5% in the U.S., but the market is gaining ground and expected to increase to 12% and 16% respectively by 2014.”

    Indeed, Futuresource said consumer spending on digital content across video (including paid online and pay-TV VOD), gaming and music would total nearly $52 billion by 2014, accounting for 46% of total global spend across packaged and digital media. This compares with 24% total global spending in 2010 — underscoring that the $113 billion home entertainment industry is steadfastly transitioning toward digital, despite challenges.

    “For digital, the online user experience needs to be as seamless and enjoyable as possible for the video industry to maximize the future opportunities and make this revenue stream really perform,” Hoang said.
    http://www.homemediamagazine.com/blu...les-2014-24406
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  2. #2
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    Full Press release from Future Source Consulting here:



    July 2011

    Digital entertainment spend will exceed $50bn by 2014

    By 2014 consumer spend on digital content across video (including paid for online and pay TV VoD), gaming and music will reach nearly $52bn, accounting for 46% of total global spend across packaged and digital media. This compared with the 24% share in 2010, demonstrates that this $113bn industry is going digital. show more/less

    "While packaged media is declining, it certainly isn't falling off a cliff," explained Futuresource Senior Analyst, Mai Hoang at this year's Futuresource Entertainment Summit.

    "The decline in packaged media across video, gaming and music has attracted a lot of debate regarding the future of entertainment content, but packaged media still plays a huge part in total sales. Combined with the availability of new platforms, digital and packaged media together will still achieve $112bn in revenue in 2014.

    "In 2010, packaged video generated $42bn globally, and although decline is apparent in the video industry, packaged will continue to produce significant revenues in the coming years, with spend still at $33bn in 2014, accounting for 72% of total consumer spend."

    Sell-through currently accounts for the majority of total revenues in packaged media, though rental plays its part, this trend is set to continue as Hoang revealed.

    "2014 will see sell-through account for 70% of total physical video spend, of which Blu-ray contributes over 50%, compared to just 13% in 2010. Globally, DVD and Blu-ray rental is still significant, although popularity varies greatly between territories - in Japan, rental accounts for over half of total spend while in the European markets, rental barely accounts for 10% share."

    While Blu-ray is gaining traction growth in the new format will not be enough to compensate for the decline in DVD. Any growth in the home entertainment industry will need to come from digital content distribution, though key challenges for digital video include the wide availability of other online content, in particular free content, and the ongoing consumption of illegal video.


    "An estimated 400 billion videos were watched online last year in the US, most of which were viewed for free via services like YouTube and Hulu," said Hoang. "In Western Europe, paid for online video accounted for just 2% of total video spend and 5% in the US, but the market is gaining ground and expected to increase to 12% and 16% respectively by 2014."

    In Western Europe Apple, Microsoft and Sony are the main contenders in the paid for online video market, while smaller service providers continue to fuel the competitive environment. As a result the market is hugely fragmented, with a variety of services offering very different business models. Objectives among online service providers also vary greatly and many services have struggled, with some exiting the market entirely over the last two to three years.

    In conclusion, Hoang stated that a number of strategies are being trialled to build bridges between digital and physical content, including industry initiatives to push digital through bundling, experimentation with release windows and exclusive downloadable content.

    "For digital, the online user experience needs to be as seamless and enjoyable as possible for the video industry to maximise the future opportunities and make this revenue stream really perform," said Hoang.
    http://www.futuresource-consulting.com/press.html
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    Since this was posted in two threads...

    Unless studios drop the vanilla DVD SKU's and go Combo (i.e. Scam) packs, I can't see this happening. OD is quickly dropping and stores are already planning for the digital future. The sections will get smaller - hell, they already are.
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    Can someone post the chart Futuresource did a few years ago? I want to see how far off they were in that prediction, and by how much this one has been revised. That way, I can judge the credibility of this latest prediction on a quantitative basis.
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    Their 2009 press release. They projected 50% Blu-ray unit marketshare by the end of 2012 back then for the US which will be a year and a half in the future. IIRC the full report did explain some of that was to product mix changes as well (ie Blu-ray+DVD combos displacing DVD only skus over time)

    http://www.futuresource-consulting.c...te_release.pdf
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    From a December 2009 Futuresource report IIRC

    I think they overestimated TV based VOD and DVD revenues for 2010 and the revenue chart includes sell through and rental revenue streams. Blu-ray was about right in that estimate for 2010 for sell through and rental combined.

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    Blu-ray for 2011 is LOL. Talk about wrong.
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    Quote Originally Posted by GizmoDVD View Post
    Blu-ray for 2011 is LOL. Talk about wrong.
    We are not done with 2011 yet.

    We are only in June. Two thirds of the revenue trending is yet to happen yet including the high volume 4Q where the sales rate is effectively doubled from the rest of the year.

    Do not count your pessimistic chickens before they are hatched.

    They were pretty close for Blu-ray in 2010 and that's the only historical comparison point on that chart we have.

    Unless you have a time machine and can see into the future. In that case, why are you hanging around here?
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    Quote Originally Posted by Kosty View Post
    We are not done with 2011 yet.

    Do not count your pessimistic chickens before they are hatched.
    So you think 5 billion for Blu-ray is possible for the US?

    No, really.

    We are only in June. Two thirds of the revenue trending is yet to happen yet including the high volume 4Q where the sales rate is effectively doubled from the rest of the year.
    We know that's BS.
  10. #10
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    Interesting data:

    Blu-ray Disc movies and related content will represent more than 50% of packaged media sales in 2014, according to a new report.
    So the thread title is misleading as the 50% does not represent total sales, only OD sales. And it will only take 3 more years for Blu-ray to get there.

    In 2010, packaged video generated $42 billion globally, and although decline is apparent in the video industry, packaged [media] will continue to produce significant revenues in the coming years with spending still at $33 billion in 2014
    And by the time it gets there, packaged OD video will have shed another $9 BILLION dollars of revenue.
  11. #11
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    Quote Originally Posted by Kosty View Post
    Their 2009 press release. They projected 50% Blu-ray unit marketshare by the end of 2012 back then for the US which will be a year and a half in the future. IIRC the full report did explain some of that was to product mix changes as well (ie Blu-ray+DVD combos displacing DVD only skus over time)

    http://www.futuresource-consulting.c...te_release.pdf
    Thanks Kosty. I actually think Blu-ray has a good chance to get to 50% by the end of 2012, since DVD-only SKUs will be eliminated from titles in ever increasing fashion. However, getting to 50% that way really cheapens the significance of the milestone, because a respectable percentage of combo buyers will be DVD consumers forced to buy the combo to get the DVD. In other words, the feat won't be reached by natural market forces, but rather by studio intervention. Nothing wrong with that of course, but you have to call a spade a spade.

    So I wonder why they are revising their prediction and moving back the 50% date two years? Seems awfully pessimistic to me. 2014 is year eight of the format. Christ by that time DVD had 90% of the market. Oh wait, I keep forgetting, Blu-ray is just going to complement DVD, not replace it. I guess Futursource is getting the same vibes now.
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    Quote Originally Posted by bruceames View Post
    Thanks Kosty. I actually think Blu-ray has a good chance to get to 50% by the end of 2012, since DVD-only SKUs will be eliminated from titles in ever increasing fashion. However, getting to 50% that way really cheapens the significance of the milestone, because a respectable percentage of combo buyers will be DVD consumers forced to buy the combo to get the DVD. In other words, the feat won't be reached by natural market forces by rather by studio intervention. Nothing wrong with that of course, but you have to call a spade a spade.
    I think youre getting ahead of yourself. The DVD sku is still available. And if it goes away its the studios reacting to the market, not the other way around. Otherwise they could have 'forced' bluray years ago.

    So I wonder why they are revising their prediction and moving back the 50% date two years? Seems awfully pessimistic to me, maybe they don't something we don't?
    Moving back? I think this is the same prediction they had before.
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    Quote Originally Posted by Elee s View Post
    I think youre getting ahead of yourself. The DVD sku is still available. And if it goes away its the studios reacting to the market, not the other way around. Otherwise they could have 'forced' bluray years ago.
    Reacting to what market? That Blu-ray will be lucky to top 2.5 billion this year? The only reacting is studios trying to get a premium price out of people by dumping the DVD SKU. Nice try at a positive spin.
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    Quote Originally Posted by Elee s View Post
    I think youre getting ahead of yourself. The DVD sku is still available. And if it goes away its the studios reacting to the market, not the other way around. Otherwise they could have 'forced' bluray years ago.

    Moving back? I think this is the same prediction they had before.
    I said that the DVD-only SKU WILL be eliminated from many new releases by 2012, NOT that they are doing it NOW. It's a prediction of my own, if you will, and yes I would need to "get ahead of myself" to do that.

    I think you need to reread those two reports. The 2009 US chart shows 50% Blu-ray by 2010, while the latest and greatest says 2014.
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    Quote Originally Posted by bruceames View Post
    I said that the DVD-only SKU WILL be eliminated from many new releases by 2012, NOT that they are doing it NOW. It's a prediction of my own, if you will, and yes I would need to "get ahead of myself" to do that.
    Yes and as Ive said before the studios motives havent changed from a decade ago, profits. If they get rid of the dvd skus in 2012 then thats them reacting to the market.

    I think you need to reread those two reports. The 2009 US chart shows 50% Blu-ray by 2010, while the latest and greatest says 2014.
    This is the 2009 prediction is it not?
    http://i50.tinypic.com/2u6d09c.jpg
    That looks more like 15% by 2010. And over 50% by 2014.

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