Warner halves high-def projections
Studio says software will record $150 million in 2006
By Susanne Ault -- Video Business, 10/6/2006
OCT. 6 | LOS ANGELES—Warner Home Video has adjusted downward its projections for consumer spending on the new HD DVD and Blu-ray Disc formats this year, citing limitations on the availability of high-definition hardware.
The studio said consumers spent just $30 million on high-def hardware and software through September, about half what Warner forecast would be spent in the period.
In presenting the studio’s revised research at the High Def 101 conference here Friday, Warner senior VP of market management Steve Nickerson said spending slimmed because most manufacturers delayed high-def player launches.
When Nickerson presented the studio’s forecast earlier in the year, Pioneer, Panasonic, Sony and Philips were among those expected to have launched Blu-ray Disc players by now. All those companies are now anticipating October through December launches. Panasonic players did start shipping to specialty electronics stores at the end of September.
Going into the fourth quarter, restricted PlayStation 3 quantities should continue to hinder early high-def revenue.
Looking to the fourth quarter, Nickerson said $750 million will be spent on high-def DVD hardware, down from initial projections of $1.5 billion to $1.9 billion. About $150 million will be spent on software, according to Warner’s revised forecast, down from earlier $225 million to $500 million projections.
Nickerson continued to be bullish on consumer adoption of high-def home entertainment formats, however. In four years, high-def DVD should have market penetration of 100 million hardware devices capable of playing high-def media, compared to 35 million standard DVD players four years after standard DVD’s launch, he said.
At year one, there were just 300,000 DVD set-top players available, as game consoles and PC drives had not launched for DVD. At high-def’s year one, there will be 1.7 million devices capable of playing high-def formats in homes, Nickerson predicted.
“Despite the two different high-definition formats, sales of compatible hardware devices will be much faster for high-def than for standard-definition,” Nickerson said.
