Report: Blu-ray to make up for DVD losses next year

Blu-ray disc sales won’t cover for the declining DVD this year, but Screen Digest says everything will balance out in 2010.

According to the London-based firm, global sales of packaged discs will dip slightly in 2009 after doing the same in 2008. However, Blu-ray will account for 8.5 percent of consumer video spending, setting the stage for overall spending to increase next year.

Proving the power of Sony’s Playstation 3 to sell Blu-ray, there were 5.3 million households worldwide with standalone Blu-ray players by the end of 2008, but they were eclipsed by the 23 million homes that have access to Blu-ray through Sony’s PS3. This should start to balance out by the end of 2009, with Screen Digest projecting 18.4 million standalone Blu-ray homes and 27 million PS3 homes, but I wonder if a recent PS3 price cut will help maintain the console’s dominance.

Worldwide, rental revenues will increase over the previous year, driven in the United States by the popularity of Netflix’s mail-order service and Redbox’s $1 per night kiosks. Overall, rentals will account for 34 percent of all spending. The number of video discs shipped worldwide fell for the first time, even though the number of shipped Blu-ray discs is on the rise. It’s not clear whether Screen Digest thinks that’ll change next year, but with the rise of streaming and on-demand video, I think it’s unlikely.

For that matter, Screen Digest’s report doesn’t address the threat of online video to packaged media. The ability to download movies directly into a home entertainment center is becoming more pervasive, with HDTVs and Blu-ray players adding storefronts from Amazon and Roxio CinemaNow. Even if Blu-ray successfully makes up for DVD’s losses, it too will eventually decline with the other options consumers enjoy. Still, if Screen Digest’s projections prove accurate, reports of Blu-ray’s imminent death will seem greatly exaggerated.