Click here to learn more about anamorphic widescreen!
Go to the Home Page
Go to The Rumor Mill
Go to our T-shirt Store!
Go to Todd Doogan's weekly column
Go to the Reviews Page
Go to the Trivia Contest Page
Go to the Upcoming DVD Artwork Page
Go to the DVD FAQ & Article Archives
Go to our DVD Links Section
Go to the Home Theater Forum for great DVD discussion
Find out how to advertise on The Digital Bits
-Established 1997-
Matt Rowe's MusicTAP

The Digital Bits: We Know DVD-Video, DVD-Audio, SACD & High-Definition
page created: 1/14/09
originally posted 1/11/09

CES 2009
back to the CES 2009 Index

CES Report #2

Detailed DEG/BDA Sales Data on BD/DVD Hardware & Software

Okay... for Part Two of our CES 2009 coverage, I'm going to go into a little more detail about the Blu-ray Disc Association (BDA) press conference, and some of the sales numbers revealed there, as well as the annual Digital Entertainment Group (DEG) State of the Industry event.

The BDA's press conference

Let's start with the BDA. Pioneer's Andy Parsons (chairman of the BDA's U.S. Promotion Committee) hosted the event. Here's some sales data presented by Andy regarding Blu-ray hardware and software performance...

The BDA estimates that 10.7 million Blu-ray capable playback devices (PS3 and standalone) have now been shipped in the U.S. in just 2.5 years since the format's inception, compared to 5.4 million DVD players shipped by the end of that format's third year. Player shipments in 2008 saw a threefold increase over 2007. For meaningful comparison, here's some data from Adams Media Research showing the U.S. market penetration of other historical home entertainment technologies at the end of their respective third year of introduction:

TV - 3%
Color TV - .5%
VHS - .5%
CD - 1.5%
DVD - 4.5%
HDTV - 1%
Blu-ray - 7.75%

Obviously, consumer appetite for media (and adoption patterns) has increased dramatically over time, but this is still an interesting comparison. Note that the Blu-ray number counts both PS3 and standalone players, but only counts multiple-player households once. Additionally, the BDA says there are now 1,100 Blu-ray titles available, and they confirmed that Warner's The Dark Knight was the first title to surpass 1 million units sold, just 2.5 years since the format launched (and despite the format war with HD-DVD). By contrast, the first DVD title to reach 1 million (Warner's The Matrix in late 1999) came almost exactly 3 years after the early 1997 introduction of DVD (which also faced a format war with the pay-per-view Divx format). Obviously, the success of DVD has grown the market for movies on disc, thus allowing the faster Blu-ray success, but I think this clearly shows that Blu-ray is a very robust and healthy format, despite the naysayers we've been hearing recently. The first 2 million discs sold month was reached in October (2.3 million), and here's something to give you a sense of how well the format did in the 4th quarter: 3+ million discs were sold in November, and a whopping 8+ million discs were sold in December. Some 9 BD-Live capable player models are now on the market (including the PS3), which together amount to over 75% of all Blu-ray players sold. In addition, 32 new models of Blu-ray Disc player - or BD-equipped HTiBs (Home Theater in a Box systems) or LCD displays - were announced at CES for release in the coming year, 23 of which will be BD-Live capable. The specific units announced are as follows (those marked with * are BD-Live - note that I'll have more on each of them in my final CES report):

EzGear - BluCobra EZ3000
JVC - LT-42B300 LCD display
LG - BD370*, BD390*, LHB979*
Memorex - MVBD-2520*
Panasonic - DMP-BD60*, DMP-BD80*, DMP-BD70V*, DMP-BD15*, SC-BT200*, SC-BT300*
Philips - HTS-5100B, BDP-3010, BDP-5010*, BDP-7310*
Pioneer - BDP-120*, BDP-320*, BDP-23FD*
Samsung - BD-P3600*, BD-P4600*, HT-BD1250*, HT-BD7200*, HT-BD7200*
Sharp - BD-HP16U*, BD-HP22U*, LC-BD80U LCD display line (5 models)
Vizio - VBR100*

Looking ahead, it was noted that Digital Copy continues to be a very popular option added to select Blu-ray Disc titles (at least 53 are already available) and that the BDA is examining and evaluating all of the various technical proposals for adding 3-D capability to the format in late 2009 and 2010. It's worth noting that most of the 3-D demonstrations available on the CES show floor were being driven by Blu-ray players, sending signals to specially-equipped HDTV displays. As there are a number of major filmmakers working on 3-D films (including James Cameron, Robert Zemeckis, Steven Spielberg, John Lasseter, Peter Jackson and others), this is seen as an exciting possible growth area.

Andy ParsonsUSA Today's Mike Snider

In addition to the market status report, the BDA press conference also included a Q&A with a trio of industry analysts, moderated by my friend Mike Snider of USA Today (pictured above right - Andy Parsons is above left). Included were Paul Erickson of DisplaySearch, Richard Doherty of Envisioneering and Tom Adams of Adams Media Research (pictured below, left to right respectively).

BDA event panel

Tom Adams noted that while Sony's PS3 under-performed in 2008 in terms of sales, standalone player sales grew strongly as he expected. He noted that Wal-Mart's Blu-ray advertising push late in the year was key. "It turned out to be a really phenomenal year for Blu-ray players." Adams further predicted that Blu-ray players will eventually take over from DVD (hardware-wise), and that he expects to see a two or threefold increase in Blu-ray software sales in 2009. As to the predictions of some that digital delivery will squeeze Blu-ray and packaged media out, Adams said "I've been hearing that electronic delivery would replace packaged media for 25 years now," adding that "Electronic delivery is not impacting packaged significantly." Five years from now, he expect that packaged media will continue to be about a $25 billion a year business, with Internet delivery and cable "on-demand" delivery reaching about $1 billion each.

Paul Erickson said that the Blu-ray format's strong 3rd and 4th quarter sales "even in a tough economy" had "changed my perspective of Blu-ray." He predicted that Blu-ray demand will steadily increase in 2009, and that hardware sales will continue to outpace DVD thanks to the PS3, aggressive price reductions and the continuing addition of premium features. He also added that in 2008 "the economy had some impact on sales, but the anticipated economic impact was overstated." Erickson also doesn't believe that electronic delivery will have much of an impact on future sales of the format, noting the continued high cost and poor availability of high-speed broadband, as well as the fact that "generations of consumers" are now used to packaged media. "I think packaged and downloads will coexist for some time. Downloading is not a major threat to Blu-ray." He also predicted that Blu-ray technology will continue to get more consumer friendly and easy to use in 2009 and beyond.

Richard Doherty was even more bullish about the prospects for the format, predicting a five to sixfold increase in software sales for Blu-ray. This past holiday season "a lot of people bought BD titles early and THEN bought BD players," adding that "when people buy the player, people are also buying lots of software." He noted that according to sales data, upconverting DVD players were not having an impact on Blu-ray. Regarding the attractiveness of BD-Live and Digital Copy, he noted that "consumers are really only just starting to experience BD-Live in the last 90 days," but that Digital Copy is strong. On the subject of downloads vs. Blu-ray, Doherty had this to say: "Downloading and packaged media will absolutely coexist. HD downloading is nowhere near the quality level of BD, and the broadband expansion has stalled" in the States. He added that "the best satellite and cable HD is delivering just one-third of the visual quality of Blu-ray" and noted that research shows that HDTV owners are recognizing this and trending accordingly. Finally, he said that while DVD has remained a relatively static technology, new features are added to Blu-ray all the time. "Consumers recognize the value of this."

Okay, that's the BDA news. Let's talk DEG next...

At the Digital Entertainment Group's State of the Industry event, which frankly is the thing I enjoy most every year at CES (I've been going for more than ten years now, and it's a great chance to catch up with nearly everyone you know in the industry in a very relaxed setting), additional sales data was released and discussed, including the previously-released HDTV Owners: The Prospects for High-Definition Media study (we have it available for PDF download in full here). Here's some additional market data offered at the event...

U.S. consumer spending for home entertainment software (rental and sell-through, both DVD and Blu-ray combined) totaled some $22.4 billion in 2008, down from $23.7 billion in 2007, no doubt due to the economic slowdown. (At the height of the DVD format in 2004, the total was $24.9 billion.) The Blu-ray Disc format was the bright spot in the industry this year, with U.S. software sales spending growing fourfold from last year to nearly $750 million. 250% more BD discs were shipped to retailers this year over 2007. U.S. DVD sales were off about 9% from the previous year at $14.5 billion, but rentals were flat at $7.5 billion. The growth in Blu-ray helped to offset the DVD decrease somewhat, making the category as a whole (both formats combined) off by just 5% from 2007 despite the recession. Blu-ray Disc software shipments in the U.S. and Canada amounted to 1.26 million units in 2006 and 17.9 million units in 2007, but grew to a whopping 63.2 million units this past year in 2008. (28.6 million units were shipped in the 4th quarter of 2008 alone.) The total format to date is an impressive 82.4 million in just 2.5 years. On the hardware side, the DEG estimated that 9.65 million Blu-ray capable devices were shipped in 2008 (PS3 and stand-alone units combined), with more than 3 million delivered in the 4th quarter alone. Some 80 models of stand-alone Blu-ray player are now available at over 10,000 U.S. storefronts, with the lowest SRP reaching just $149 in 2008. (The format's entry price is likely to crack $100 by the end of 2009.) It's worth noting that if these hardware sales trends continue to increase as expected, the Blu-ray Disc format could hit 40% penetration of the U.S. market by 2010. (Note that 40% is widely considered to be the threshold required to officially consider any product "mass market.") In terms of DVD, some 25 million DVD players were sold in the U.S. in 2008, making the format-to-date total over 264 million in the U.S. (counting stand-alone, portable, home theater in a box and combo players). Adjusting for the number of households with more than one player, the total number of U.S. DVD households is now 92 million. On the software side, some 10.3 billion DVD discs have been sold in the U.S. and Canada since the format launched in early 1997, 1.4 billion in 2008 alone. The DEG also estimates that more than 50 million HDTV sets were sold to consumers during the year, bringing the total in the U.S. to nearly 40 million, and that 22% of households now have more than one HDTV set. The last estimate I heard (from Nielsen) was that there's slightly over 113 million TV households in the U.S., so this is finally reaching mainstream penetration levels. Keep in mind, that according to the DEG's recent HDTV white paper (linked above), nearly 30% of the 1,101 HDTV owners surveyed for the report owned a Blu-ray player as well, and 84% of them were likely or very likely to recommend the format to their family and friends.

One last word on Blu-ray Disc player sales in the 4th quarter: This is anecdotal, so take it as you will, but back in early December, a senior executive for a leading player manufacturer (I'm not at liberty to say which one) told me that the Saturday after Black Friday, their top three retail customers (which I believe you can take to mean Best Buy, Wal-Mart, etc) were calling to beg for more units, because their store locations had already sold out of their entire stock on hand. I'm told this level of demand continued throughout the remainder of the holiday shopping season, and that many stores are currently STILL out of stock on select BD player models.

In other news reported at the event, while the DEG has been in existence here in the United States (under various names, including the DVD Video Group and DVD Entertainment Group) since 1997, the group has now expanded to both Europe and Japan in an effort to better coordinate the group's efforts worldwide. The DEG is also continuing its recent efforts to covert the entire home entertainment industry to green/sustainable practices.

Finally, the DEG announced the winners of its annual Creative Excellence Awards at the event. Once again this year, I had the honor of participating as a judge. The complete list of winners is as follows:

Best of Show - The Dark Knight (Warner)
Theatrical DVD Title of the Year - Wall-E (Disney)
Catalog DVD Title of the Year - Touch of Evil: 50th Anniversary Edition (Universal)
TV DVD Title of the Year - The Sopranos: The Complete Series (HBO)
Direct to DVD Title of the Year - Futurama: Bender's Game (Fox)
Music DVD Title of the Year - Shine a Light (Paramount)
Blu-ray Disc Title of the Year - Sleeping Beauty: 50th Anniversary Edition (Disney)

National Retailer of the Year for Hardware - Best Buy
Regional Retailer of the Year for Hardware - Sixth Avenue Electronics
Retailer of the Year for Software -

The DEG Emile N. Petrone Digital Innovation Awards (for Products)

Sight - Pioneer Elite Kuro PRO-141FD HDTV
Source - Panasonic DMP-BD55 Blu-ray Disc Player
Sound - Pioneer SC-09TX A/V Receiver

And before I close, here's a couple pictures from the DEG event... Amy Jo Smith (the DEG's execuitive director - top image below) and Disney's Bob Chapek (DEG president - the lower image) addressing the gathering...

Amy Jo Smith

Bob Chapek

So there you go... that's CES Report #2. My third and final CES report will look more closely at the specific Blu-ray Disc hardware announced at the show. That will come tomorrow. Hey... 24 returns tonight, man! Plus there's a half-hour Battlestar preview special on SciFi tonight as well. You've gotta have priorities. Also, Sarah should have our CES 2009 Gallery up in the next couple of days as well.

Have a great night, and we'll see you back here tomorrow morning. Stay tuned...!

Bill Hunt, Editor
The Digital Bits
[email protected]

back to the CES 2009 Index

E-mail the Bits!

Don't #!@$ with the Monkey! Site designed for 1024 x 768 resolution, using 16M colors and .gif 89a animation.
© 1997-2015 The Digital Bits, Inc., All Rights Reserved.
[email protected]