2006 download, high-def spending $200 mil.

BEAR STEARNS: Speakers say new delivery formats are fraction of DVD

By Jennifer Netherby -- Video Business, 3/6/2007

MARCH 6 | Consumers spent roughly $200 million in 2006 on movie downloads and both high-definition formats, barely a fraction of what they spent on DVD, Netflix chief content officer Ted Sarandos said Monday at the 2007 Bear Stearns 20th Annual Media Conference, offering up some of the first hard revenue numbers on new video formats (webcast).

DVD’s dominance—the business is roughly $24 billion—was a theme among media execs speaking at the investor’s conference, which continues through Wednesday in Florida.

Speaking later in the day, Walt Disney Co. president and CEO Bob Iger (webcast) reiterated comments he has made in the past that the download business is “relatively modest” and doesn’t appear to threaten the DVD business. He estimated that Disney has sold more than 2 million movie downloads through iTunes since October.

“We’re very confident the DVD business is going to continue to be successful,” Iger said. “We sold 130 million DVDs last quarter. This business is not going away for us at all.”

Sarandos said consumers who rent high-def DVDs through Netflix report 80% to 90% satisfaction levels, but he predicted the high-def disc business would stay small until one side prevails.

Iger said high-def TV sales are key to driving the new high-def disc formats.

He predicted high-def disc would take over DVD once a winner emerges, but he backed away from predicting when the format war would end. He also didn’t specifically name Blu-ray Disc as the eventual winner, though Disney is in the Blu-ray camp.