A comparison of U.S. market penetration figures of blu-ray players and DVD players five years after their introduction shows that consumers have been significantly slower to adopt blu-ray technology.
DVD players were introduced to the U.S. market in 1997 and blu-ray players were introduced to the U.S. market in 2003. Using 2008, the last year with complete blu-ray sales figures, as a comparison point, the year 2002 corresponds to the point DVD players had been on the market for the same amount of time, five years.
Blu-Ray vs. DVD
According to the Consumer Electronics Association, in 2002, 43 million DVD players had been sold in the U.S. In 2008, Adams Media Research estimates that 3.1 million blu-ray players had been sold in the U.S. Even adding in sales of blu-ray-compatible Sony Playstation 3 consoles, which Adams Media Research estimates totaled 6.1 million units by the end of 2008, and there is clearly a huge discrepancy in adoption rates. Factor in sales of the DVD-compatible Playstation 2 console, which the BBC estimates totaled 50 million units worldwide by the end of 2002, with most sales in North America, and the discrepancy becomes far more severe.
As opposed to DVD players, which are compatible with most TV sets, blu-ray players require an HDTV set to operate. However, NPD Group research estimates that North American HDTV sales grew 60% in Q4 2008 and that HDTVs constituted almost all North American TV sales by the end of 2008. All major TV transmission in the U.S. will be HD-formatted beginning in June 2009.
Discounting the requirement for HDTVs as a significant adoption obstacle, the other likely impediment to blu-ray adoption is the increasing growth of direct download of digital content. Online movie rental service Netflix has publicly said it is focusing on direct video streaming, including HD content, to consumers, and cited growing momentum in its streaming business as a driving factor in 45% net income growth during Q4 2008.
Consumer entertainment retailer Blockbuster will begin downloading movie content directly to TiVo devices, including HD models, later this year, and online retailer Amazon recently started streaming HD TV shows and movies through its Video on Demand service. With these and other direct streaming options, consumers may be waiting to see how direct content streaming, including HD content streaming, develops in the coming years before committing to a new video player form factor.
