Blu-ray unit sales in Europe to triple next year

Report: Flat-screen TV sizes shrink with economic outlook

By Danny King -- Video Business, 10/28/2008

OCT. 28 | No recession is going to stop worldwide consumers from getting their high-definition disc players—they’ll just be hooked up to smaller TVs.

Unit sales of Blu-ray Disc set-top players in the five largest Western European markets will triple next year to more than 1.8 million units, according to U.K.-based research firm Futuresource. The estimate, which doesn’t count Sony’s Blu-ray-equipped PlayStation 3, is consistent with reports forecasting a jump in North American Blu-ray player sales over the next few years.

Where cash-strapped consumers will make concessions, however, is with the size of flat-screen TVs they buy to watch their high-def movies. Western European retailers are dropping prices by about 25% from a year earlier for TVs with screen sizes larger than 42 inches, Futuresource said.

Futuresource estimated U.S. flat-panel TV unit sales to rise 10% annually over the next two years, while the average U.S. and Western European price for a 52-inch TV bought over the Internet last month fell 30% and 36%, respectively, from a year earlier, NPD Group unit DisplaySearch reported yesterday.

The Futuresource forecast is consistent with many electronics and entertainment analysts who've said the victory of Sony's Blu-ray format over the Toshiba-led HD DVD platform earlier this year will cause a surge in demand for high-def discs this year. Last month, NPD Group unit DisplaySearch said Blu-ray player unit sales will triple this year, double next year and by 2010, unseat the PlayStation 3 as the most popular hardware player for the format.

Earlier this month, Dallas-based Parks Associates said Blu-ray unit sales would be about 5 million globally this year, up from about 800,000 Blu-ray players and 800,000 HD DVD players in 2007, and will jump eightfold in four years to about 40 million.

But, although the Blu-ray figures coincide with earlier reports estimating a jump in unit sales as prices drop and Hollywood studios release more high-def titles, the estimated drop on flat-screen prices illustrates how the economic downturn is starting to cause consumers to pull back by buying smaller TVs. Just last month, DisplaySearch said prices for LCD TVs smaller than 20 inches would rise 5% next year, while prices of the 52-inch versions would drop 20%. Overall, the average TV price will fall 7% next year to $489, DisplaySearch said last month.

Last week, Sony, which spearheaded the Blu-ray platform and is the world's second-largest TV maker behind Samsung, cut its earnings forecast for the year ending March 31, 2009, by 38% to 150 billion yen ($1.6 billion). The company, which reports earnings this week, cited, among other things, less than expected LCD sales from "a deterioration in the market environment."