Blu-ray sales flat despite winning format war

The demise of HD-DVD was supposed to open the door for Blu-ray, but that hasn’t been the case as sales of stand-alone players have ground to a standstill.

According to The NPD Group, sales of Blu-ray high-definition DVD players rose just 2% in March, a meager jump given the fact that Toshiba pulled the plug on the rival HD-DVD format in February, ending the format war.

“That stand-alone Blu-ray players haven’t picked up significantly from HD-DVD’s loss shows few consumers were dissuaded primarily by the format war,” said NPD Group director of industry analysis Ross Rubin. Consumer satisfaction with standard DVD and the high-price of new Blu-ray players are combining to keep sales down, he says.

“When we surveyed consumers late last year, an overwhelming number of them said they weren’t investing in a next-generation player because their old DVD player worked well and next-generation players were too expensive,” said Rubin. “It’s clear from retail sales that those consumer sentiments are holding true.”

Blu-ray player prices fell below $300 during the 2007 holiday season, but drifted back up this spring when the format war ended. The price of Sony and Samsung players is currently $399, well above the $200 mark that’s considered entry level for mainstream buyers. Best Buy is expected to lower prices in June when it debuts its Insignia brand player with a price in the $299 to $349 range.

By the fall, Rubin said lower-priced players from small manufacturers should begin showing up in stores to help drive prices under $300. “The category should be well positioned for the holiday season,” said Rubin. It should also get help this year from the sale of millions of PlayStation 3 players equipped with Blu-ray drives.

And the industry is going to need a boost if current DVD sales trends continue. The NPD Group reports that sales of standard DVD players dropped 39% during the first quarter.

In terms of DVD sales, Blu-ray is rising slowly as the installed base of players gradually grows. During the first quarter, Blu-ray sales accounted for 5% to 8% of total DVD sales, with percentages varying by studio. Lion-sgate Home Entertainment said Blu-ray sales represented 7% of its total DVD sales and Sony Pictures Home Entertainment estimates Blu-ray accounted for 8%.

Disney should help stir interest this fall with the release of “Sleeping Beauty” on Blu-ray in October, the first Disney animated classic released on Blu-ray.