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Sales data for the week ended Jan. 7

Sales data for the week ended Jan. 14
But a report on optical drive manufacturers says that Blu-ray won't take off until 2009

According to figures released by Nielsen VideoScan to Home Media Magazine, Blu-ray movies are quickly gaining ground on HD DVD. The sales numbers show that Blu-ray Discs have been outselling HD DVDs by a strong margin thus far in 2007.

During the first week of 2007, sales of Blu-ray more than doubled that of HD DVDs, with the latter making up only 46.14 percent of sales compared to the former. Blu-ray pulled even further ahead the next week, leaving HD DVD behind at only 38.36 percent of Blu-ray’s numbers. To clarify, that means that, from January 1 to January 14, for every 100 Blu-ray Discs that were sold, only 38.36 HD DVDs were sold – meaning that Blu-ray has been outselling HD DVD by nearly a three to one margin.

The recent explosion of Blu-ray Disc sales can be attributed to a couple of reasons. The most obvious would be the launch of the PlayStation 3, which rapidly injected the Blu-ray Disc movie market with at least 687,300 players. In contrast, HD DVD backers announced at CES 2007 that some 175,000 HD DVD players were sold in the U.S. since the format’s introduction. The sales numbers of PlayStation 3 alone put Blu-ray players way ahead of HD DVD machines, which is likely a part of Sony’s strategy for its format.

Of course, the majority of those who purchased a PlayStation 3 since launch probably did so for its games playing capabilities. But, given the absolutely desolate pickings of games available for the machine at the current moment, gamers could be feeding their shiny black consoles Blu-ray movies until there’s something more fun to play.

It’s important to note that the figures presented by Nielsen VideoScan are based on point-of-sale data, leaving out movies sold as part of bundle deals. That means that the numbers of Blu-ray and HD DVD movies sold do not count the copies of Talladega Nights and King Kong bundled with PlayStation 3 and the Xbox 360 HD DVD player, respectively.

Another reason for Blu-ray’s recent charge could be HD DVD’s recent drought of new releases, with only two new HD DVD titles over the two weeks. Batman Begins remains the top selling title for HD DVD, while Blu-ray saw newer titles cycle through its sales ranks, with Crank taking top spot for the second week of January.

Although HD DVD still holds the majority of total HD movies sold, Blu-ray movies have recently made up tremendous ground. In the week ended January 7, Blu-ray only had 85.05 percent of HD DVD’s total market share since the formats’ inception. Just one week later, Blu-ray managed to claw up more than 7 percent to reach 92.4 percent of HD DVD’s share.

While Blu-ray’s recent insurgence can be attributed to the release of the PlayStation 3, the current lead of HD DVD media sales can be explained by its earlier arrival on the market. Toshiba shipped one of the first HD DVD players in April 2006, with Samsung following up two months later with the first Blu-ray machine in June 2006.

Despite the recent surge for Blu-ray, the Global Optical Storage Industry Report, published December 2006, says that HD DVD will still be the mainstream in the market during 2007 to 2009, after which Blu-ray is expected to take over the lead. Most optical drive manufacturers (the report names four giants in the optical drive business: Hitachi-LG, Toshiba-Samsung, Sony NEC and LiteOn) acknowledge Blu-ray as the future and view HD DVD as a transitional product. Because of the high costs and difficulties in manufacturing Blu-ray parts, as demonstrated in the challenges in making the PlayStation 3, the report says that Blu-ray will have to wait until 2009 before seeing strong market growth.

Many of the challenges associated with Blu-ray are that the format’s manufacturing process requires new machinery and equipment, while HD DVD is generally compatible with much of the processes used to make DVDs. As an example, Steven Hirsch of Vivid Entertainment told DailyTech in a past interview that there are very few Blu-ray manufacturing facilities available as compared to HD DVD replication, providing greater challenges in bringing Blu-ray movies to market.

Until very recently, even Hollywood lacked a dedicated testing center for the authoring, encoding and replication of Blu-ray movies. Matsushita Electric Industrial announced on February 2 that its U.S. subsidiary, Panasonic Corporation of North America, will establish a Blu-ray Testing Center within the existing facilities of Panasonic Hollywood Laboratory.

Matsushita says that its testing center is the first of its kind for Blu-ray Disc media for content verification before disc replication. The motion picture industry apparently expressed the need for a testing center to provide such services, especially in the Hollywood area. The new Panasonic testing center hopes to accelerate the release of BD-Video titles to market.

Blu-ray currently holds the advantage in storage space, but it cannot lean on that fact alone, as Toshiba has achieved a 51GB, triple layer HD DVD. Until Blu-ray Disc manufacturing reaches the ease and cost-levels comparable to its competitor, HD DVD still holds the edge in terms of cost of equipment to both consumer and manufacturer. At any rate, the HD optical format war sees no end in sight, with some companies resigning to a stalemate with the release of dual format players and dual format movies.





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