Prices too high, demand too low

Outside the U.S., Blu-ray is failing to fulfill expectations and April’s smash homevid release of “Avatar” is unlikely to change this situation, according to a report by Screen Digest.

The report says that sales of Blu-ray players are disappointing in key markets such as the U.K. and Germany, and when consumers do upgrade to the format, they buy less than 1.5 discs a year on average — much fewer than anticipated.

Screen Digest’s head of video Helen Davis Jayalath said, “The failure of the Blu-ray format to capture enough of the market in 2009 means this downward trend is set to continue, with the short-term uplift in video spending that we had previously expected to see in 2010-2011 unlikely to materialize.”

The poor prospects for Blu-ray are based on a combination of a slower-than-expected fall in retail prices and the impact of economic recession.

For many, the quality of DVDs remains “good enough,” according to Screen Digest.

The upshot is that total international consumer spending on packaged media fell 2.9% (at fixed exchange rates) to $17.1 billion in 2009.

Screen Digest forecasts that over the next five years international consumer spending on buying DVDs and Blu-ray discs will fall to $14.5 billion, an average decline of 3.5% per year.

“Avatar” broke records for Blu-ray disc sales worldwide, but the movie is also selling well on DVD.

In the U.S., Blu-ray discs accounted for half of “Avatar’s” home entertainment sales, where consumers paid as little as $4 extra for the Blu-ray version.

Screen Digest said that internationally “Avatar” didn’t sell significantly more Blu-ray discs than other recent releases.

The “Avatar” DVD retailed for £8 ($11.40) in Blighty while the Blu-ray disc sold for almost double.

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