A number of stories broke last week that offer some interesting insights into the changing dynamics of the home entertainment business, which has long been the film industry cash-cow. But the market appears to be faltering (on both sides of the Atlantic) and a growing number of indicators suggest that in the long-term, the days are numbered for what’s known quaintly in the business as ‘packaged media’.
First up, consultants SNL Kagan forecast strong growth of Blu-ray within the next four years before tailing off as video-on-demand over the internet takes off.
According to SNL Kagan, Blu-ray player sales in the US will triple in 2009 to $765 million, peaking at $6.86 billion by 2013 before dropping below $3 billion the following year as the market reaches maturity.
Consumer spending on Blu-ray discs will surpass the billion-dollar mark this year, and disc sales are expected to hit $10 billion by 2013 (matching standard-definition DVD market share).
Thereafter, however, uptake of video-on-demand services will continue to grow so that by 2017 around 99 million US homes will have a high-speed Internet service, compared with 115 million homes with high-definition disc players.
Here’s what the SNL Kagan press release had to say:
“Blu-ray will be the driving force behind the video retail market throughout the next decade,” said Wade Holden, analyst at SNL Kagan. “The current economic climate, however, will slow the growth of this new format and likely keep it from reaching the heights that it may have in better times. VOD services will continue to improve in both technology and content over the next decade and begin to draw consumers away from Blu-ray and DVD by 2017.”
Meanwhile, Jennifer Netherby, writing last week in Video Business, reports that Universal Studios Home Entertainment, Summit Entertainment and 20th Century Fox Home Entertainment are joining other studios in ‘shutting the window between DVD and video-on-demand as DVD sales weaken and more consumers warm to the idea of on-demand movies.’ Warner Home Video remains the only studio putting most of its titles out day-and-date, a strategy it admits helps VOD and retail sales but can adversely affect physical media rentals.
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