Blu-ray expected to top digital distribution

Blu-ray disc is expected to become dominant over digital distribution this year, according to research firm Media Control GfK International.

A projected 150 percent increase in Blu-ray title sales, from $1.1 billion in 2008 to $2.9 billion this year, drives the projection. Strangely, the story in Home Media Magazine doesn’t say how digital distribution should perform next year, but notes that last year’s video on demand and broadband offerings took in $1.5 billion.

Further, digital distribution won’t top $3.5 billion in sales until 2013, at which point it will represent 15 percent of the home movie market, GfK predicts.

This a welcome reminder of the broadband limitations most consumers experience. "The bandwidth required to stream any type of HD video is way beyond what most households have," said Michael Paxton, an analyst for In-Stat. He also said streaming remains inconvenient for most consumers.

It’s worth noting that not every analyst embraces the findings. Rob Enderle, an independent analyst, says that reports like these will be seen in greater numbers "as the Blu-ray marketing organization works to counter the perception that BD simply ramped too late and still hasn’t hit critical price points." He speculates that cable and satellite industries were left out of the research.

An analyst with Inside Digital media, Phil Leigh, said the Blu-ray figures are artificially high because they factor in per-unit premiums that don’t apply to DVD and digital distribution. But another analyst, Richard Doherty of the Envisioneering Group, said this factor will ultimately balance out with the rising cost of streaming.

In short, statistics like these are easily loved or hated. The real debate is over whether Blu-ray will succeed in the long run. Good luck to analysts trying to pin that down.