Blu-ray continues to thrive, in spite of streaming threat

Hard to believe that just five years ago at CES, the Blu-ray Disc specification first announced. And five years on, with one format war under our belt, and another scuffle brewing, Blu-ray is in fact doing very well.

According to industry organization Digital Entertainment Group, Blu-ray player sales have topped 28.5 million units. The DEG estimates the number of HDTV households in the U.S. at nearly 56 million.

On the content side, Blu-ray Disc president Andy Parsons notes sales have roughly doubled over last year. "That's been the trend for the past three-to- four years. That's bucking the trend with what's going on with packaged media in general. And that's good news: Blu-ray is growing at a nice solid rate, in spite of DVD declining."

The DEG gives even more Blu-ray-specific nuggets in its just-released report. Avatar sold 15.3 million copies in North America, nearly one-third of which were on Blu-ray, making it the best-selling Blu-ray title to date. A number of titles saw initial sales on Blu-ray that exceeded 30 percent of total sales, including "Despicable Me", The Expendables, Iron Man 2, Salt, and A Christmas Carol. Finally, Blu-ray Disc catalog sales are up 52 percent compare with last year's numbers-which shows users are willing to plunk down cash for old favorites as they come available, even if they're favorites they may already have on DVD.

Now that we have five years of data to look back upon, Parsons notes that Blu-ray is doing better than DVD before it. "If you look at the adoption rate of the market we could sell into, almost everyone could buy a DVD, be it a PlayStation 2 or standalone DVD, because everyone had an SDTV," says Parsons. "Blu-ray was selling the same number of units as DVDs, but it was doing so into less than half the market size, because not everyone had an HDTV yet. So that really means the adoption rate has picked up much faster than DVD."

Through the UltraViolet system, each household will be able to create an account for up to six members who can access the household's content, and it will be able to register up to 12 devices so UltraViolet content can be downloaded to those devices or shared among them. UltraViolet also will provide streaming access and enable retailers to provide consumers with a DVD or other physical media copy.

Blu-ray combo packs, which package a Blu-ray Disc with a DVD and a Digital Copy for use on other media, remain a popular and successful option for discs. As for the state of getting the much-talked-about managed copy (which would have allowed digital copies and rights management using the Advanced Access Content System DRM used by Blu-ray), well...we're still waiting for managed copy. At this point, the question remains whether it's even relevant, given the news today of six studios partnering on UltraViolet, a digital locker system due later this year that was designed by the Digital Entertainment Content Ecosystem. (UltraViolet allows you to register up to 12 devices so you can share content among those devices via downloading or streaming.)

Meanwhile, 2010 saw the launch of Blu-ray 3D; as 3D HDTV in the home takes off, the availability of content will help keep the Blu-ray player in living room entertainment stacks. According to DEG estimates, about 100 Blu-ray 3D titles will be in stores by the end of 2011; already, at CES Disney announced it plans at least 15 titles for 2011.

2011 also promises to provide the best reason yet for hold-outs to buy a Blu-ray player: The coming release of all six Star Wars films on Blu-ray Disc in September 2011. Yes, the Force will be with you in high-def...finally.

Blu-ray has come far in its four and a half years at market. "At that time, it was brand new and nobody had heard of it," recalls Parsons. "Now, we're growing larger and larger in retail presence. Prices of players are much more accessible."

Even more critically: The addition of streaming services-everything from Netflix to Vudu, Pandora, YouTube, Picasa, Flickr, and beyond--to Blu-ray players has helped cement Blu-ray's role in your living room (Panasonic's 2011 players even add Skype support). With a streaming-equipped Blu-ray player, consumers might be able to skip the media streamer component, and that makes Blu-ray a good value. "They're really a central content device that becomes the nerve center of your home entertainment system," agrees Parsons.

Still, the prospect of clashing lightsabers and exploding Death Stars in high-def glory aside, can Blu-ray continue its march forward when faced with the threat posed by the convenience of the same streaming services that help boost players' multipurpose usefulness?

Absolutely. Streaming has gotten better, but for most consumers, a satisfying high-def experience can be elusive due to inadequate bandwidth connections. And the prospect of tiered pricing and bandwidth throttling from Internet service providers still looms. Fact is, Blu-ray remains the most satisfying high-definition audio-visual experience in the home. And it will for the foreseeable future.

As for what's next for this optical disc format, in the next year, Parsons says, "we're going to be talking about recordable Blu-ray a lot more." One reason is to push people to store the video they're capturing on Blu-ray Disc. Unfortunately, while Blu-ray Disc burners have dropped dramatically in price (from $1000 five years ago to about $200 today), PC and laptop makers continue to emphasize adding the less expensive Blu-ray Disc readers, and not writers, to systems.

Also, capacity potential for Blu-ray has jumped, too. Look for more news on BDXL, a recording format that can pack 128GB on a BD-R disc. The catch: To write BDXL, you'll have to have a new drive, and play the disc back only on a BDXL capable device. "It's about the electronics and optics, which need to be designed to focus and read through those layers with low reflectivity," explains Parsons. "The top layers can't be too reflective; if they are, you can't see the layers down below.It's a bidirectional pass through all of those layers, and you have to bounce the light in a way that can be read by all layers. You have to read through the top three layers, and then read back through them." Pioneer shipped its first BDXL drive in late 2010.

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