Blu-ray sales up in Q4

Pricing gains contributed to 70% revenue spike

Blu-ray had a jolly set of holidays.

The Digital Entertainment Group says industrywide shipments of Blu-ray titles were up 35% domestically in the fourth quarter, compared with the recession-wracked year-earlier quarter. Thanks to holiday gift-buying, the final quarter represents the home-entertainment industry's most important selling period.

DEG said studios shipped 38.6 million Blu-ray discs in the year's final quarter. That compared with 28.6 million in fourth-quarter 2008 and just 9.5 million two years earlier.

On a revenue basis, Blu-ray sales jumped 70% amid significant pricing gains. Blu-ray rental revenue rose 48%.

A couple of things helped the high-def sales during the holidays. Consumer spending was up in most categories, and the installed based of Blu-ray players has continued to grow, with high-def hardware in 17 million U.S. homes.

Meantime, Hollywood has been pulling out all stops to stoke market momentum for Blu-ray.

In the boldest such move so far, Warner Bros. recently said it would package DVDs and Blu-ray discs together in all future new-release movie titles. Such "combo packs" -- offered more selectively by Disney and others -- allow consumers to begin collecting high-def discs even before buying Blu-ray players and provide those using the Blu-ray disc at home an extra DVD for their car or portable players.

Among other stats in DEG's year-end report:

-- Blu-ray Disc sales and rentals doubled to $1.5 billion in 2009.

-- Total sales and rental revenue from home entertainment releases in all formats dipped 5% to $20 billion.

-- Sales of digitally distributed discs and consumer spending on video-on-demand titles contributed $2.1 billion, or 32% more than in '08.

"The home entertainment business is doing remarkably well given the overall economic environment," DEG and Warner Home Video president Ron Sanders said. "We have seen tremendous growth in both Blu-ray hardware and software.

Consumer transactions are up, and we are looking forward to seeing some stabilization in the packaged goods sell-through business in the coming year."

Bob Chapek, chairman of the trade group and president of studio distribution at Disney, said the planned rollout of Blu-ray discs in a recently established 3D format will boost high-def revenue.

"Next year promises to be an extraordinary year for consumers to experience the expanded possibilities of Blu-ray," he said.

Analysts project that Blu-ray revenue may start replacing the industry's slumping DVD revenue dollar-for-dollar in 2011. DVD revenue fell 11% to $16.4 billion last year.

DEG issued its report at the Consumer Electronics Show in Las Vegas. DEG also announced its annual Industry Best awards.

Those included a retailer nod to Best Buy and disc-title honors in various categories. Awards went to Paramount's "Star Trek," WHV's "The Wizard of Oz -- 70th Anniversary Ultimate Collector's Edition," Universal's "Battlestar Galactica: The Complete Series" and Disney's "Tinker Bell and the Lost Treasure."
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