RealTime IT News

Thank Warner Bros. For Blu-ray Sales Spike?

There was much celebrating and gloating from the Blu-ray community across the Internet this week as weekly numbers from market researcher NPD Group seemed to indicate the near-even split in sales between Blu-ray and HD DVD had become completely one-sided.

However, NPD cautions not to start dancing on HD DVD's grave. First off, HD doesn't have a grave yet, secondly, one week of numbers do not a trend make.

Blu-ray and HD DVD are two competing formats battling it out for the chance to replace your DVD player as the next generation home media playback format. Both are fairly similar, with the only real difference being capacity. A single layer HD DVD disc holds 15GB of data while a single layer Blu-ray disc holds 25GB. HD DVD was developed by Toshiba while Blu-ray is a Sony creation.

The two have been battling for the market for almost a year now, with the slight edge going to Blu-ray but not enough to put away HD DVD. Then it all seemed over in a flash when on the eve of CES, Warner Bros announced it would go exclusively Blu-ray. The HD DVD Consortium cancelled its CES events while the Blu-ray camp spent the entire conference gloating.

The figures were not officially disclosed by NPD, a subscriber with access to the numbers let them out. NPD doesn't disclose weekly numbers because it says such short term data can give an inaccurate picture.

"Weekly data can be very volatile and is designed to be used tactically," Stephen Baker, vice president of NPD, explained to InternetNews.com. "Because of that, brands and retailers can do all sorts of things in one week to change the direction of a category for a week. That's typically not a hard thing to do."

However, Baker admitted he'd never seen a change this bad. For the week ending January 5, 2008, Blu-ray Disc player sales were at 15,257 units, while HD DVD player sales were at 14,558 units, for a near 50-50 split.

One week later, after the Warner decision to stop supporting both Blu-ray and HD DVD and support Blu-ray only, the numbers went totally lopsided. Blu-ray sales were 21,770 units, a 42 percent gain, to HD's 1,758, an 88 percent plunge.

On top of that Nielsen VideoScan reported the top selling high definition DVDs for the week of January 13, and it was entirely Blu-ray titles, with the critically-praised film "3:10 To Yuma" topping the list and three from the "Harry Potter" series making up the listing. Those "Harry Potter" titles are also available on HD DVD, as they are Warner titles and Warner does not go exclusive until the summer, but it reflects the difference in unit sales between the formats.

"It was obviously a big shift, and I'm not saying [the Warner decision] didn't have anything to do with it," said Baker. "It likely did but there were other things to do with it as well."

The following week, Toshiba made drastic cuts to its HD DVD players, slashing the prices by half, and that data is not in yet. Baker said NPD doesn't plan on releasing it, but added with a laugh "who knows what ends up out there again," in reference to DVD fan sites.

Van Baker, research director with Gartner, said he was inclined to think the Warner deal did cause the huge shift. "It all depends on what films have been released recently and what promotions took place," he said. "That said, the Warner announcement and Microsoft comment, when they came out and said they could shift to a Blu-ray based Xbox easily, kinda pulled the rug out from under HD DVD."

Microsoft's Xbox 360 console has an add-on HD DVD drive for $149. The company was asked at CES if a similar Blu-ray drive would be possible and company officials said it was easy enough to do. It just didn't say it would make a drive any time soon.

Van Baker doesn't think HD DVD owners are abandoning their players, but it might be making people get off the fence. "What could be giving rise to this is some people who have been reticent, maybe they have a PS3 in the house, are now saying 'oh it's over now, I can buy movies.' So people who may have been on the fence are feeling justified in buying movies now."

He said his bet is that the Blu-ray/HD format war "will be over by this Christmas. But we'll have to wait and see."