Blu-Ray Sales Way Up In 1H 2009

The economy as a whole may not be ready to turn the corner just yet, but new data from the Digital Entertainment Group (DEG) will have proponents and manufacturers of Blu-ray devices dancing a jig. According to the group, Blu-ray disc sales are up a whopping 91 percent compared to the first half of 2008. Total for the year is said to be around $407 million; a figure the DEG reckons helped cushion the bottom line against an overall downward trend in consumer spending.

This type of growth rate could be a sign that Blu-ray is finally coming into its own as a digital standard, almost a year after it's competitor HD-DVD bit the dust. The question, however, isn't whether or not Blu-ray will succeed in some form—it's already outsold formats that maintained a tenuous grasp on the market for years (LaserDisc anyone?). The larger issue at stake is whether or not Blu-ray can establish itself as a dominant video format the way DVD did over ten years ago. Ironically, the Digital Entertainment Group's own PR hailing the success of Blu-ray also notes the success of one of Blu-ray's top competitors: digital distribution.

The group's press release notes that digital content sales rose 21 percent over the second quarter "up 21 percent to $968 million, which includes $196 million for electronic sellthough." That single sentence, combined with the continued robustness of the DVD market, perfectly captures the two biggest threats to Blu-ray's market dominance. There's obviously room in the market for Blu-ray, but with cheap, ubiquitous, up-converted DVD on one hand and convenient on-demand downloads on the other, there's no guarantee consumers will choose a next-generation disc standard at all.

When DVD players and software hit the market circa 1997, the nascent standard faced no opposition and improved on its VHS forebear in virtually every way. DVD's were physically smaller, offered better audio and video, and the quality difference between DVD and VHS was immediately obvious even on a ten-year-old television. Blu-ray either lacks most of these advantages or requires higher-end hardware than a number of consumers own in order to make them apparent. The electronics industry is partially to blame for this problem—slapping "HDTV" on every screen capable of displaying 720p or more might have seemed a great idea at the time, but the resulting confusion hasn't done Blu-ray any favors. If the gap between DVD and 1080p is below some buyers' level of perception, the gap between an upscaled DVD at 720p and a Blu-ray Disc at 720p is going to be even smaller.

The unsettled issue here isn't whether or not Blu-ray provides superior quality to DVD, but to what degree consumers will choose to pay for that quality when they have digital download options readily available. Ironically, the legal strategy pursued by the MPAA with regard to piracy and copy protection could end up stabbing it in the back. For years, the MPAA has insisted that "ownership" of a physical VHS tape or DVD is not, in fact, ownership at all. We consumers have simply licensed the right to play said content, and in doing so have agreed to a number of restrictions governing what we can do with it. If we as consumers actually accept this argument, there's virtually no reason at all to actually purchase a physical disc. If the only additional burden of renting a movie via digital download is a restriction on when one must begin watching it, why bother buying it at all?