Digital doesn't break disc- DVD, BD hold up despite onslaught of negative press

[Grubert]

Home Media Magazine and Hollywood Reporter

Analysts may think packaged media is going down the tubes because of digital downloading, but sales and rental data show the home video industry is holding up remarkably well despite the down economy, the high price of gas, piracy and any consumer shift toward the Internet.

Consumer spending on DVDs and Blu-ray Discs, purchases and rental combined, was $10.77 billion in Jan-Jun 08, compared to $10.6 billion in Jan-Jun 07 (up 1.6%).

Spending on disc purchases rose 1.1%, from $6.8bn to $6.87bn.

Rental spending rose 2.6%, from $3.8bn to $3.9bn.

Unit sales were up 1.1%, with consumers buying 412.3 million discs, up from 407.9 million discs in the first half of 2007.

Home entertainment industry analyst Tom Adams isn't surprised about the continued health of the packaged-media business.

"Most analysts are techno-geeks with plenty of money and not much time, while most Americans are not technically savvy, and they have plenty of time but not much money."

Tom Adams, president of Adams Media Research, said, "The fact is, despite what many on Wall Street seem to think, there is very little digital downloading going on. We're talking about $118 million in 2007 spending, and about $254 million this year - so against a $24 billion packaged-media market it'sreally not making much of a dent at this point."

In the first six months of 2008, consumers spent an estimated $194 million on Blu-ray Disc purchases - a gain of nearly 350% from the $43 million that came from high-definition disc sales (BD and HD DVD combined) the first six months of 2007.

Unit sales of Blu-ray Discs in the first half of 2008 were up 340% from the first six months of 2007, according to Nielsen Videoscan data. Studio stimates peg the number of Blu-ray Discs sold in the first six months of the year at 7.37 million units.

Top BD sellers:

1. I Am Legend 305,000
2. National Treasure: Book of Secrets 145,000
3. No Country for Old Men 137,000
4. 300 133,100
5. 3:10 to Yuma 115,000

Note: this thread is in direct connection with existing thread Wall Street Doom and Gloom, where financial analysts predicted falling disc revenues.

[zombieflanders]

Originally Posted by Grubert

Tom Adams, president of Adams Media Research, said, "The fact is, despite what many on Wall Street seem to think, there is very little digital downloading going on. We're talking about $118 million in 2007 spending, and about $254 million this year - so against a $24 billion packaged-media market it'sreally not making much of a dent at this point."

Digital downloads: Out since 2003, barely breaking $250m 5 years later, and barely doubling sales.
Blu-ray: Out since 2006, nearly $200m in sales in the slowest 6 months of the year, 340% growth.

Sure, certain folks will mock the numbers, but it'll be in that "I know my DD argument is falling apart weekly, but I'll nervously laugh anyway" mood. Then they'll try comparing it to DVD with "OH NOES TEH BLOORAY IZNT AS GUD AS DDVD!!!!eleventy11!", while trying to convince people that not being as good the fastest-growing video format in history is utter failure.

Good times.

[Grubert]

Originally Posted by zombieflanders

Then they'll try comparing it to DVD with "OH NOES TEH BLOORAY IZNT AS GUD AS DDVD!!!!eleventy11!", while trying to convince people that not being as good the fastest-growing video format in history is utter failure.

Well then I might as well compare them first.

Unit sales: 412.3m total, 7.37m BD. BD share = 1.8%

Revenue: $6.87bn total, $194m BD. BD share = 2.8%

BTW Blu-ray saved disc sales from dropping year on year.

[Favelle]

$118 million to $254 million? A 108% increase in revenue is bad?

[Stryydr]

Definitely sounds like it's headed in the right direction. Downloads certainly appear to have a long way to go.

[Jimbo976]

And of course that is SD + HD downloads with almost all of that being SD downloads.

[zombieflanders]

Originally Posted by Favelle

$118 million to $254 million? A 108% increase in revenue is bad?

When it's been talked up to the point of hysteria as the disc-killer? Yes.

When it's been around nearly 3 times as long as Blu-ray? Yes.

When it's got a library of titles several times (if not orders of magnitude) larger than Blu-ray? Yes

When it's got wider hardware support than Blu-ray? Yes.

When it's compared to BD's 340% increase? Yes.

When the total estimate for the year is only 25% more than the actual total for Blu-ray in the slowest 6 months? Yes.

When that's the entirety of formats (XBLM, Roku/Netflix, AppleTV, ITMS, etc.) and resolutions (ie, both SD and HD) compared to one HD format? Yes.

[darczap]

Tom Adams, president of Adams Media Research, said, "The fact is, despite what many on Wall Street seem to think, there is very little digital downloading going on. We're talking about $118 million in 2007 spending, and about $254 million this year - so against a $24 billion packaged-media market it'sreally not making much of a dent at this point."

My question is how much of the $24 billion packaged media market is from blu ray disc sales? Of course when you factor dvd into this, the difference between $254 million this year for downloads to $24 billion for packaged media, seems exorbitant. I still prefer an onslaught of packaged media sales to downloads anyway, so this dollar difference looks very good to me.

[RussTC3]

What negative press?

This is good news. Then again, I don't see the problem in Blu-ray, DVD and Downloads all increasing. I like the multiple choices.

[kowhite]

Originally Posted by Favelle

$118 million to $254 million? A 108% increase in revenue is bad?

It's not bad...it's just not the Blu-ray killer a few people on here want it to be. It's just evidence that those saying the future of DD being the primary form of home video delivery is still...far off.

[nextoo]

I'm curious as to how the green machine will embrace BD.

Packaged media can be presented as an energy hog by the powers that be.

Hopefully it will be spared.

[Favelle]

Originally Posted by kowhite

It's not bad...it's just not the Blu-ray killer a few people on here want it to be. It's just evidence that those saying the future of DD being the primary form of home video delivery is still...far off.

Its still not bad. 99.99999% of all the industries in the world would kill for 110% increase in revenue over a year.

[RussTC3]

Originally Posted by Favelle

Its still not bad. 99.99999% of all the industries in the world would kill for 110% increase in revenue over a year.

Yeah, I think it's a good sign for both mediums.

[nextoo]

Percent increases over small numbers look great. But the real number is measured by revenue.

[kowhite]

Originally Posted by Favelle

Its still not bad. 99.99999% of all the industries in the world would kill for 110% increase in revenue over a year.

No, and considering what I think most of the industry was expecting from DD...I doubt it's really much an issue.