It took a year-end
recount coupled with a tedious search for indie Blu-ray product sources (and
all that entails in trying to figure out when some of these jokers actually released
their stuff) to push the final Blu-ray SKU count up and over the 2011 total.
In 2011 there were 1,886
confirmed Blu-ray product offerings.
Last year the number (thus far, with a few stragglers still in the wind)
stands at 1,909 … that meager up-tick represents a year-over-year gain of 1.22
percent.
For a format that is just
seven years into its lifecycle to suddenly go flat — in terms of new SKU growth
— is an event that should be viewed with some degree of concern for those
involved in the home entertainment packaged media business. Or maybe not … perhaps suppliers are engaged
in “rational” behavior.
If the truth be known,
the format has never really taken off. Oh
sure the sales numbers have soared, but there’s a good deal robbing Paul to pay
Peter embedded in that growth.
For consumers the
marginal increase in resolution offered by the Blu-ray format over DVD has
simply not been the same drawing card as DVD was to VHS.
There are other factors
that have inhibited the growth of Blu-ray, again, in terms of SKU counts. GIGO is certainly an issue. Some stuff just doesn’t work; it doesn’t
translate to hi-def.
Price is also a factor,
but not just the new-to-new differential between a DVD and a Blu-ray release of
the same title. Trying to promote
Blu-ray catalog is difficult when the consumer is more than willing to buy used
DVDs (they’ve discovered that it is not the same value proposition as the crap
shoot of purchasing used VHS) at just a fraction of the cost of the same title
on Blu-ray … that’s a killer.
Unless it’s a genre-specific
or a title-specific purchase, most films are simply there for consumption. The vast majority are viewed once and it is
time to move on … not everything can be Star Wars.
Throw in changes in the
retail environment and a less than stellar economy and you have plenty of
reasons for a go-slow approach to the Blu-ray format since its inception.
Since the focus for
Blu-ray has been on New Theatrical (and hit New Theatrical releases at that)
sales, this too has proven to be something of a trap. The studios can only generate 98 to 105 of
these new golden eggs per year ($25 million plus at the box office). It’s a function of available screens and
available seats at the multiplex level.
It’s hard to make a
business out of two new product offerings per week on average.
Trying to mine the
catalog — it would appear — has also been frustrating. Price (especially when you factor in all of
the used product out there) versus the marginal increase in resolution seems to
be a major factor in keeping SKU counts for Blu-ray from moving to ever-higher
levels.
You don’t have to sit in a
sales meeting at a major Hollywood studio to see what is going on. You don’t have to be a fly on the wall, so to
speak. All you have to do is to look at their
release behavior over an extended period of time to see what works … and what
doesn’t.
You either accept or
reject the notion that businesses behave in rational ways; it’s not a hobby. If it doesn’t provide an acceptable ROI … then
they don’t do it.
For example, during the
DVD-exclusive period of 1997 through 2005 only 14.1 percent of all New
Theatrical releases have been converted to Blu-ray. The DVD format, on the other hand, converted
92.6 percent of all those films released theatrically during that period. That is a huge difference.
Clearly, suppliers are not making the money
they expected on converting this mass of product to Blu-ray, otherwise they
would not be bouncing along at 14.1 percent conversion rate.
We suspect that the Blu-ray
format will continue to focus on New Theatrical and genre-specific film library
releases, while DVD will remain the workhorse for most other categories.
Only time will tell if
Blu-ray becomes more of a storage medium and less of (or in addition to) a hi-def
bells and whistles format … if that happens, then we could see a significant
shift in release patterns. Stay tuned.
To download this week's complete edition of the DVD and
Blu-ray Release Report: DVD & Blu-ray Release Report