High-def DVD grows at faster pace than standard

Price promotions push growth ahead of standard format at the same age

By Susanne Ault -- Video Business, 1/25/2008

JAN. 25 | High-definition DVD player sales during the fourth quarter spiked well above standard DVD at the comparable point in the earlier format’s life cycle.

Price-driven promotions are the main reason for high-def’s steeper growth curve, according to Paul Erickson, DisplaySearch director of DVD and HD Market Research.

Standard DVD players were priced more steadily during their first months on shelves, he explained, as they were never embroiled in a hyper-competitive format war.

During the last weeks of 2007, Blu-ray Disc players could be bought for less than $300, marking a $200 drop from widespread pricing earlier in the year. HD DVD players were offered at ultra-low $99 pricing at Wal-Mart and Best Buy in November.

“There is a much larger spike at the end of the year for next-generation DVD due to strong performances by both formats for November and December, as well as heavy competition-driven promotions for both Black Friday and the December holiday season,” said Erickson.

Additionally, retailers have begun bundling free BD players with the purchase of like-branded high-def 1080p TV sets. Such promotions were started in earnest during the fourth quarter and continue into 2008. The deals are thought to be a key reason for BD’s sales dominance over HD DVD early this year.

On the heels of Warner Bros. Entertainment’s beginning of 2008 announcement about dropping its HD DVD support, Blu-ray set-tops dominated 90% of all high-def hardware unit sales for the week ended Jan. 12, according to the NPD Group. HD DVD set-tops represented 7% and dual-format players totaled 3% of sales during that seven-day frame.