Blu-ray sales skyrocket, provided you lower the sky

Market data from the NPD Group released this week shows that in the first quarter of 2009, more than 400,000 standalone Blu-ray players were sold, constituting a year-over-year increase of 72%. Dollar sales likewise increased by 14% and hit $107.2 million.

Last month, Futuresource Consulting predicted that 2009 will be the year that Blu-ray breaks, estimating shipments of more than 12 million standalone Blu-ray players for the total year. Futuresource's Jack Wetherill said his group anticipated 1.2 million units would ship in Q1 2009, some three times more than NPD says were sold to consumers.

If sales maintain their first quarter pace, 2009 will end with only 1.6 million players sold, meaning Futuresource projected an oversupply of 10.4 million units. Of course, the group expects the fourth quarter holiday shopping blitz will greatly impact Blu-ray sales as it has in previous years. Last year, for example, holiday Blu-ray buying represented more than half of the year's total sales in a single quarter.

In NPD's survey, however, more than 58% of the nearly 7,000 consumers surveyed in late February and early March admitted they were "not very familiar" with Blu-ray, and its share of total movie sales is still tiny. Though sales of individual Blu-ray titles has climbed with each successive release, the format is being dramatically outsold by DVD. For example, Blu-ray sales for Disney's Wall-E, one of the format's most successful titles -- and one of which the Blu-ray Disc Association is quite proud -- represented only one-tenth of the title's net disc sales in March.

NPD Entertainment Industry analyst Russ Crupnick said, "The leading driver of Blu-ray purchase intent is recommendations from friends, family or co-workers. Blu-ray's superiority used to be difficult for many consumers to grasp, but when friends rave about it, or demonstrate Blu-ray in their homes, they are selling the benefits in a way that is far more effective than simply viewing an advertisement or seeing it demonstrated at a retail store."

Very few studies have examined the role of social influence on consumer tech adoption, but peer evangelism has long been considered one of the strongest determinants in consumer attitude. A critical examination from Kulviwat, Bruner, and Al-Shuridah published in the Journal of Business Research last September (v. 62 #7) suggested, "There are two very different ways that companies can attempt to affect individuals' attitudes about adopting a high tech innovation: One way is to focus on the product's attribute-based benefits while the other way...is to convince potential adopters that a relevant group has endorsed the product. "

Thus far, these two areas have been weak for Blu-ray. The format's attribute-based benefits (i.e., picture and sound quality, bonus material quality) have repeatedly been called into question, and even though the stable of relevant supporters is substantial (Dell, Samsung, LG, Apple, Sony to name only a few) there is a colossal presence absent from the Blu-ray party: Microsoft.