The Digital Entertainment Group has reported that Blu-ray disc sales doubled for the first quarter of 2009, as compared to the same quarter in 2008. There are many reasons behind this.
Consumers spent $407 million dollars on Blu-ray discs in the first quarter of 2009. Sales of Blu-ray players were also up 25% from the previous year.
The reasons behind the jump in sales are not surprising. We have said all along that Blu-ray disc sales will take off when they become affordable. There is a magic price threshold that resonates with consumers, and that is $20. VHS tape sales did not take off until the prices reached sub-$20. The same effect was apparent with standard DVD sales. $20 is also the price point that television infomercials try to achieve for a wide range of products. If they try to sell a product for $24.95 or $29.95, the product only rarely sells well. But if the product can be sold for $19.95 and looks to be a good value, sales skyrocket. American consumers generally consider anything that provides entertainment value and is priced under $20 to be a good value. Unless someone has money to burn, they are unlikely to spend the $29.95 or $39.95 retail price found on most Blu-ray movies, but run it on sale for $19.95 and the movies sell well.
The price of Blu-ray players has also come down dramatically. In early 2008, most Blu-ray players were selling from between $400 and $600. Today, many very well designed players with many new features can be purchased for $225 to $300. Sony has an excellent line of inexpensive players that can sometimes be found for a little as $200.
Other factors are also driving sales. There are about 9 million Sony PlayStation 3 gaming consoles installed in homes. These devices play Blu-ray discs and are already hooked up to televisions. They are also relatively inexpensive when compared to stand-alone Blu-ray players and serve multiple entertainment purposes.
The economy itself is also driving sales. Even though movie theaters are reporting record sales, it is far less expensive to rent a movie on a Blu-ray disc and watch it on an HDTV. The last time my wife and I went to a movie, it cost the two of us about $34 when we included the price of slushy drinks and popcorn. That would have paid for two months worth of Netflix rentals for Blu-ray disks. I didn’t mind paying the $9.50 per person price for the tickets, but spending $15 on frozen flavored water and a few cents worth of popcorn was disturbing.
From my perspective, baking a gourmet pizza and renting or purchasing a Blu-ray movie to watch at home is a far better bargain that going to the movies.