Can Blu-ray Save Blockbuster?
By Betsy Schiffman August 08, 2008 | 2:49:42 PMCategories: Blockbuster
The DVD may have less than a decade before it goes the way of VHS. Until then, Blockbuster thinks (or hopes) Blu-ray is breathing some life into the movie disc. The ailing rental chain says it saw "consistent growth" in sales of Blu-ray devices in what was an otherwise lackluster quarter.
"We're selling as many as [2,000] or 3,000 units per week today of Blu-ray devices, and that basically builds our customer base and our loyalty. Because once someone buys the Blu-ray device ... we think we're the best location for them to return and either rent or buy their Blu-ray products," said Jim Keyes, Blockbuster CEO and Chairman, during yesterday's conference call.
(By "Blu-ray devices" Blockbuster is referring to sales of Playstation 3 units.)
So far, Blu-ray sales have been nothing but disappointing -- the players are prohibitively pricey and people don't really understand what they get for their money. For people who only recently upgraded from VHS to DVD, it's not clear if Blu-ray offers much of an added benefit over DVD. But if Blockbuster's Blu-Ray sales mean anything, though, the technology's time is coming.
"We are seeing more momentum behind Blu-ray as HDTV penetration continues to grow," says Ross Rubin, director of industry analysis at market research firm NPD. "It should be a strong holiday for the format -- there's no more competition from HD DVD; there's no more consumer confusion; and more content is becoming available on Blu-ray. Even sales of up-converting DVD players that are competitive with Blu-ray are good for the format because it shows consumers are willing to invest more in output."
But while Blockbuster execs pat themselves on the back -- Carl Icahn, a Blockbuster board member smugly congratulated the company on taking the "new medicine" -- the reality is that even if Blu-ray enjoys a nice little sales romp for a few years, digital distribution will ultimately win out in the end.
"It's going to be challenging for Blu-ray to have the same sort of tenure dominance that DVD had," says Rubin. "There's a lot more competition now for pathways to the television. That said, it will certainly be the leading HD format for movie sales for a number of years. It's really Blu-ray's market to lose because of a huge percentage of movies are still sold via DVD."
See Also:
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"digital distribution will ultimately win out in the end."
Digital distribution will replace disposable television, but people who want to *save* particular movies that they love will still want something that had been professionally prepared.
