Blu-ray sole bright spot

An increasing number of consumers are making the switch from DVD to Blu-ray, but higher Blu-ray prices can’t offset an overall 9% drop in physical disc sales in the last year.

And half of the consumers who plan to pick up Blu-ray players over the next six months are buying the hardware so they can use built-in subscription services like Netflix, signaling an increased switch to digital.

“As more and more buyers make the decision to obtain the superior picture and sound technology of Blu-ray, there is also more awareness that the same player that delivers that experience can also provide access to digital services that are gaining the attention of American consumers,” said Russ Crupnick, entertainment industry analyst for NPD Group.

An estimated 26 million people buy Blu-ray discs, representing 15% of U.S. consumers, according to a new report by NPD Group. That’s up from 9% last year.

Year-over-year sales of Blu-ray players are up 16%, with consumers sparking to lower pricing of hardware and discs.

“The fact that prices are now within the budgetary range acceptable to rank-and-file consumers is helping bolster the overall value proposition of the Blu-ray format,” Crupnick said.

DVD still dominates by far, with 57% of U.S. consumers using a DVD player last year, the same percentage as in 2009.

Overall, 116 million people in the U.S. currently buy DVDs and Blu-rays, down from 128 million in 2009. That figure is expected to continue to decline as studios make it easier for consumers to access their films and TV shows digitally through various VOD platforms.

That includes videogame consoles, like Sony’s PlayStation 3, which heavily touted its built-in Blu-ray player upon launch in 2006.

Nearly five years later, 49% of PS3 owners say they view Blu-ray movies on the console at least once a month, NPD said.

NPD did not disclose digital sales, but a previous report by IHS Screen Digest reported a 38% boost in sales last year to a total of $385 million.

Netflix recently reported 23.6 million customers in the U.S. and Canada, 70% more than at this point last year. Meanwhile, services like Xbox Live, which provides access to Netflix, Hulu and soon YouTube, claims 35 million users who pay $50 a year.

“While Blu-ray may not be the replacement for DVD that many once hoped for, it is certainly adding strength to the physical video-disc market,” Crupnick said.

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