HD DVD Shows Sales Growth

By Greg Tarr -- TWICE, 7/18/2007

Las Vegas — Overall sales of HD DVD hardware grew 37 percent, while software sales growth rose 20 percent in the first quarter of 2007 according to a quarter over quarter analysis conducted by the North American HD DVD Promotional Group.

The group released its findings during the Entertainment Merchants Association (EMA) Home Media Expo 2007, here, Tuesday.

The promotional group said the results were determined using data from Nielsen Netratings, The NPD Group point-of-sale data and from movie studio sales figures.

During the same time-frame, overall Blu-ray Disc hardware sales saw a 27 percent decline from Q1 to Q2, and Blu-ray software sales were down 5 percent, The HD DVD Promotional Group said.

The results were attributed in part to spring marketing efforts which lowered the entry price for an HD DVD player to an everyday $299. The group said dedicated HD DVD CE players experienced a 183 percent quarterly increase as a result.

The group reported a total market penetration of 180,000 dedicated HD DVD CE players to date.

“The numbers are clear — HD DVD is steadily gaining momentum and market share,” stated Ken Graffeo, Universal Studios Home Entertainment HD strategic marketing executive VP, and co-president of the HD DVD Promotional Group. “With HD DVD CE players now at MSRP prices starting at $299 and with strong marketing campaigns around new HD DVD titles with Web-enabled interactive features, we’re continuing to raise the bar for the consumer experience.”

The HD DVD group cited recent studies showing that consumers are basing their purchasing decisions on pricing.

Responding to the announcement, Andy Parsons, Pioneer Electronics advanced product development senior VP and representative for the Blu-ray Disc Association, told TWICE: “What’s interesting is that [the HD DVD Promotional Group] keeps trying to disregard the importance of the PS3. It sounds like they are trying to redefine the story a bit. Our position is that you don’t try to separate the traditional home theater player from the PS3 because we know that there are a significant percentage of people who own PS3s who are using them to watch movies.

“There is no way we could be outselling those guys 2-to-1 on the titles as we’ve been doing since the beginning of this calendar year if not for PS3.”

In a call from Korea Wednesday, Parsons said the Blu-ray format has “well over 1.5 million players installed in the U.S. alone when taking into account the PS3.”

He acknowledged that Toshiba’s dedicated player sales may have accelerated quarter over quarter after dropping the price of the entry model to $299.

“There’s no doubt they are selling more players since dropping the price to $299. Meanwhile, Sony’s got their $499 player on the market, as well as having lowered the price on PS3, and everything I’ve been hearing is that had an equally positive effect on Blu-ray hardware sales.”

Parsons added that “we continue to think its content that drives the whole market, not hardware.”