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Blu-ray market share showing linear growth

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Old 12-22-2011, 11:18 AM   #1  
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Default Blu-ray market share showing linear growth

Blu-ray market share by year:

2008: 4.5% (3.5% Q1-3, 6.2% Q4)

2009: 10.9% (8.8% Q1-3, 14.8% Q4) +6.4%

2010: 16.9% (15.0% Q1-3, 19.1% Q4) +6.0%

2011: 23.1% (21.0% Q1-3, 26.8% Q4) +6.2%

Notice the almost linear progression in Blu-ray OD market share, rising an average of 6.2% per year, with a small range of 6.0-6.4%.

If that linear projection line holds out, it will take over 4 more years for Blu-ray to overtake DVD! Why are we not seeing a (normal) market share growth curve?

Also note the jump in market share in Q4, while remaining nearly flat the next 3 quarters. The problem is that Blu-ray is so dependent on blockbuster new releases, is that market share gains are only really felt in the 4th quarter, since that's where most of that activity is.

At this point in the lifecycle, DVD had already overtaken VHS (by the 4th quarter in 2002), and by the next year had double VHS sales. Blu-ray now is only a quarter of DVD, more than 5 years into its lifecycle, and progressing very slowly. Will it really take 4 more years for Blu-ray to overtake DVD?
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Old 12-22-2011, 11:30 AM   #2  
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Will it really take 4 more years for Blu-ray to overtake DVD?
IMO - no. Because DVD is dropping faster then BD is increasing. That accelerates the point where BD overtakes DVD.

IMO, the studios don't want to "rock the DVD boat" anymore then they already have with putting off the DVD only release so the only available release is the BD/DVD Combo.

As we are already seeing, they are giving Digital a leg up by releasing a D/D title a few weeks before the OD release.

It is apparent that people are just not buying movies like they used to. IMO, too many went from buying to renting due to the recession (now 4 years) and have learned that they really don't need to give in to the impulse buy mentality.
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Old 12-22-2011, 11:56 AM   #3  
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IMO - no. Because DVD is dropping faster then BD is increasing. That accelerates the point where BD overtakes DVD.

IMO, the studios don't want to "rock the DVD boat" anymore then they already have with putting off the DVD only release so the only available release is the BD/DVD Combo.

As we are already seeing, they are giving Digital a leg up by releasing a D/D title a few weeks before the OD release.

It is apparent that people are just not buying movies like they used to. IMO, too many went from buying to renting due to the recession (now 4 years) and have learned that they really don't need to give in to the impulse buy mentality.
But that's the point. I have just shown mathematically that BD market share growth is not accelerating at all. And that includes this year. There is no indication, sales-wise, that that's going to change.

Sure, DVD sales are falling fast, off 20% so far this year. But Blu-ray growth is also falling fast, from 68% last year to just over 20% this year. In fact, it can be said that the BD growth curve is falling faster than the rate of DVD decline. In any case, the facts shows linear market share growth, and it begs the question of if it's ever going to show accelerated growth. It has been linear as far back as one can measure.
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Old 12-22-2011, 12:05 PM   #4  
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There were a few projections saying that Blu-ray is going overtake DVD by next year, the one below made a mere 6 months ago. So how does linear market share growth jive with that prediction. Did they do any homework, or are they "assuming" Blu-ray is going to bust out of a 3 year trend next year?

That could only mean 1) studios are going to pull the plug on DVD, 2) Blu-ray is going to reverse the growth curve trend and have a bust out year.

Remember that even if studios pull the plug on DVD, that most of DVD's sales are in existing catalog, TV and special interest titles. Probably less than a third of DVD's sales are from new theatrical release.

http://blog.cdrom2go.com/2011/06/blu...sales-by-2012/
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Old 12-22-2011, 12:12 PM   #5  
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Great research Bruce!

I think the reason that you are not seeing the typical growth curve is because Blu-ray is not a growth product. It is purely cannibalistic, and cannibalizing from an overall declining market.
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Old 12-22-2011, 01:26 PM   #6  
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But that's the point. I have just shown mathematically that BD market share growth is not accelerating at all. And that includes this year. There is no indication, sales-wise, that that's going to change.

Sure, DVD sales are falling fast, off 20% so far this year. But Blu-ray growth is also falling fast, from 68% last year to just over 20% this year. In fact, it can be said that the BD growth curve is falling faster than the rate of DVD decline. In any case, the facts shows linear market share growth, and it begs the question of if it's ever going to show accelerated growth. It has been linear as far back as one can measure.
Redo your calculation with DVD dropping 30% instead of 20%. How does that affect BD's growth? Does it increase it?
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Old 12-22-2011, 01:54 PM   #7  
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Redo your calculation with DVD dropping 30% instead of 20%. How does that affect BD's growth? Does it increase it?
Dvd is not declining 30%, but if it does next year, bluray would benefit from that. What is your point? Market share growth has been linear in spite of accelerated Dvd declines.

Dvd is declining at a normal rate. The problem now is that bluray's growth curve is decellerating too fast. That is not normal, and the main reason why bluray is showing linear, rather than accelerated, growth in market share, in spite of accelerated Dvd declines.

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Old 12-22-2011, 02:12 PM   #8  
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Dvd is not declining 30%, but if it does next year, bluray would benefit from that. What is your point? Market share growth has been linear in spite of accelerated Dvd declines.

Dvd is declining at a normal rate. The problem now is that bluray's growth curve is decellerating too fast. That is not normal, and the main reason why bluray is showing linear, rather than accelerated, growth in market share, in spite of accelerated Dvd declines.
]
I wanted you to substitute a 30% drop this year (hypothetical) to see how that affects the BD growth . . . humor me please.
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Old 12-22-2011, 03:43 PM   #9  
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I wanted you to substitute a 30% drop this year (hypothetical) to see how that affects the BD growth . . . humor me please.
If the DVD drop was 30%, instead of the actual 20%, and BD revenue remained at it is, then the BD market share would be 25.5% instead of 23.1%.
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Old 12-22-2011, 04:25 PM   #10  
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Here are the DVD sell through figures according to HMM. The 2010 figures have been revised significantly downwards, by $925 million. Figures in billions

2008: $11.254,

2009: $10.197, -8.7% YoY

2010: $8.290, -18.7% YoY

2011 (projected) $6.632, -20.0% YoY

Notice that last year's decline is almost as much as this year (18.7% vs. 20.0%).
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Old 12-22-2011, 04:41 PM   #11  
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20% per year is not looking good.
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Old 12-22-2011, 05:43 PM   #12  
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Think it could have something to do with people getting into Bluray. Then realizing they are not going to buy movies all over again and stop? That would account for the surge during the holiday season. Then people stop and don't repeat the buying the following year and slow down or stop all together. Might not make sense. Just throwing it out there.
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Old 12-22-2011, 05:59 PM   #13  
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Think it could have something to do with people getting into Bluray. Then realizing they are not going to buy movies all over again and stop? That would account for the surge during the holiday season. Then people stop and don't repeat the buying the following year and slow down or stop all together. Might not make sense. Just throwing it out there.
I think the BD share rises in Q4 mainly because of the combination of new release strength and type of new release (Blu-ray favorable genres action/adventure/CGI). That was the case early in the quarter and even the last few weeks of September. But now, even though the box office is there, the genre mix is not, so the weekly market shares have reverted the last few weeks, which is very unusual for this time of year.

It's almost like Blu-ray needs a perfect storm for it to get a bigger piece of the pie. Doesn't sound that healthy to me.
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Old 12-22-2011, 06:07 PM   #14  
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Originally Posted by bruceames View Post
Blu-ray market share by year:

2008: 4.5% (3.5% Q1-3, 6.2% Q4)

2009: 10.9% (8.8% Q1-3, 14.8% Q4) +6.4%

2010: 16.9% (15.0% Q1-3, 19.1% Q4) +6.0%

2011: 23.1% (21.0% Q1-3, 26.8% Q4) +6.2%

Notice the almost linear progression in Blu-ray OD market share, rising an average of 6.2% per year, with a small range of 6.0-6.4%.

If that linear projection line holds out, it will take over 4 more years for Blu-ray to overtake DVD! Why are we not seeing a (normal) market share growth curve?
Aside from the major issue of the recession impacting sales/growth you have to factor in that a household needs to first upgrade their TV set to a High Definition model in order to see any real benefit to Blu-Ray ownership.

That is a consideration which was missing from both the previous home media formats (VHS + DVD) both of which could be brought home from the store as soon as their formats were introduced and used on the standard definition sets already in virtually every consumer's home.

So the adoption of Blu-Ray is literally predicated upon the market adoption of HD televisions. A product which has yet to reach saturation itself even after being available for over a decade.

Not only that, but there are some opinions that claim that there is little benefit to the viewer in watching a BD over a DVD on smaller HD sets (26"-37" range). Mind you this is not my opinion but it
is one that I have heard espoused by others.
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Old 12-22-2011, 06:18 PM   #15  
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Aside from the major issue of the recession impacting sales/growth you have to factor in that a household needs to first upgrade their TV set to a High Definition model in order to see any real benefit to Blu-Ray ownership.

That is a consideration which was missing from both the previous home media formats (VHS + DVD) both of which could be brought home from the store as soon as their formats were introduced and used on the standard definition sets already in virtually every consumer's home.

So the adoption of Blu-Ray is literally predicated upon the market adoption of HD televisions. A product which has yet to reach saturation itself even after being available for over a decade.

Not only that, but there are some opinions that claim that there is little benefit to the viewer in watching a BD over a DVD on smaller HD sets (26"-37" range). Mind you this is not my opinion but it
is one that I have heard espoused by others.
Yes but remember that 20% buy 80% of the product. Those 20% tend to be the ones already owning an HDTV. I think we're at or past the point where lack of HDTV penetration can be played as an excuse why Blu-ray growth is slowing down so fast. Besides, why is HDTV penetration rising so fast (probably over 70% of households now) and Blu-ray player adoption isn't?

Last edited by bruceames; 12-22-2011 at 06:22 PM..
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