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14 www.ifa-international.org IFA International • Monday, 1 st September 2008
MARKET & TE CHNOLOGY TRENDS BLU-RAY MARKET TRENDS By Richard Barnes The Hi-Definition disc markets in both the USA and Europe continue to perform in line with expectations, following a more bullish outlook once the world shifted to one format at the beginning of this year. Right now all eyes are on Q4 with everyone wondering just how big it will get, with so many hot title releases planned and all hitting the shelves day and date with the DVD release. The consensus seems to be that consumers will buy close to 45 million Blu-ray discs in the US this year (more than 400% up on last year). On big titles, the share of total sales being taken by BD has already hit 5-6% and by Q4 it is possible we’ll see a 10% or even 12% share for some of the really big hitters. In Europe, awareness and uptake are still lower overall, although in the key markets the retailers and the studios are reacting to an uplift in interest this year and are gearing up for a good end to 2008. “We expect 2% of unit sales in the lead markets of the UK and France to be on BD this year and this is likely to hit 5-6% next year”, says Mai Hoang, a lead analyst in the Futuresource Home Video team. By 2012, between 40% and 50% of consumer expenditure on video discs will be allocated to Blu-ray according to the latest analysis from Futuresource. What has been disappointing to date for the content companies has been the lack of catalogue title sales, although the studios are showing no signs of reducing their interest in catalogue product. “All eyes are on Warner’s initiative to cut catalogue prices”, continues Hoang. “Other studios and the retailers are going to be watching consumer reaction to this very carefully”. “What has impressed me most”, says Jim Bottoms, MD of Futuresource, “is the way the retailers are supporting BD and how much space they are giving over to Blu-ray discs. Europe is still some way behind in this regard but here too we are seeing more of a push behind the format”. “Much of the drive behind this increase is coming from growing consumer awareness and falling hardware prices, coupled with 2012 SELL-THROUGH RETAIL VALUE: DVD VS BLU-RAY PS3 owners increasingly using their consoles for video playback”, adds Jack Wetherill, who focuses on the hardware business at Futuresource. “I would be amazed if we don’t see a Blu-ray player in the US at or below 250 USD by the end DIGITAL PHOTO FRAMES CONSUMER SURVEY UNCOVERS GROWING MARKETPLACE By Bruce Cooper of this year, and in order to stimulate consumer traffic in the holiday season who’s to say there won’t be a product at closer to 200 USD? In the UK, player prices will fall to around £149 and there may be one or two companies trying to better that.” With an upsurge of interest in Digital Photo Frames (DPF) and the market gaining ground, Futuresource Consulting has carried out a consumer survey across France, Germany, Russia and the UK to better understand consumers’ decision-making criteria, preferences and usage relating to DPFs. “The Digital Photo Frame is a popular gift item and this is helping to fuel sales”, says Simon Bryant, Principal Consultant, Futuresource. “In 2007, the Western European DPF market exploded, reaching 3.8 million units. That’s up from just 0.6 million the year before, with Western Europe representing approximately 30% of global volumes“. “By 2011, we expect household penetration to reach 14% across Western Europe as a whole, with the UK and France leading the charge at 29% and 23% penetration respectively.” The Futuresource DPF consumer research study was carried out online and targeted nearly 3,500 respondents across the four countries. Of these, just over 600 were selected as suitable candidates, either because they owned a DPF, planned to purchase or had already purchased for someone else. “Across all four countries, design and price were foremost in consumers’ minds when choosing a DPF”, says Ian Roper, General Manager, Futuresource, “with most owners and gifters not knowing the resolution, aspect ratio or screen size of their purchases. When respondents do consider features before buying, screen resolution, USB connectivity, the ability to display different picture sizes and internal memory size were the top four considerations”. Not surprisingly, DPFs are predominantly used in the home, with just 3% of owners displaying one in the workplace. The study also found that in France, Germany and the UK, the lounge or sitting room was the room of choice to display a DPF, though in Russia the bedroom was favoured as the primary location. “Interestingly, nearly 70% of owners are planning to purchase additional photo frames within the next six months”, continues Roper, “so we’re going to see future market growth derived from existing users, and not just through increased household penetration. Furthermore, over 80% of owners and nearly 70% of gifters told us they would recommend a DPF to friends and family.” The survey also revealed that pricing was such a key factor in the decision making process that a significant number of consumers were put off from making a purchase. “Going forward, our wider industry analysis shows that average retail prices will fall by nearly 30% between 2007 and 2011”, says Bryant, “driven primarily by economies gained from rising volumes. However, price declines will also be offset by increasing screen sizes and improved functionality, including Wi-Fi, organiser functions, web tablet and even TV functions.” For further research reports visit : www.futuresourceconsulting.com IFA International • Monday, 1 st September 2008 www.ifa-international.org 15
