How You Doin’, Blu-ray?

It’s been a year since Blu-ray won the war, and defeated HD DVD to become the high definition DVD format. It’s time to take the pulse of the new technology and see how it’s doing. According to the Blu-ray Disc Association, more than 10.7 million Blu-ray players have been sold in the United States. That sounds impressive.

However, standard DVDs sold twice that many — more than 23 million players — in just the first two years that they were on the market. (Blu-ray has already been out for three years.) Standard DVD players had a 50% market penetration in the U.S. in just five years. Blu-ray will have to pick up the pace to get even close to that.

And the Blu-ray Disc Association includes another revealing statistic: roughly 60% of all the Blu-ray players in this country are Sony Playstation 3 video game consoles. Yes, they play Blu-ray (and standard DVD) movies, but how many of them were bought primarily for that function? I haven’t seen any data on that, but I expect that a significant portion of those six million PS3s have never even seen a Blu-ray movie.

The retailers are trying to boost Blu-ray demand. Amazon has select titles on sale for less that $12, and Best Buy has a promotion selling some movies for less than $17. But the problem remains that even a stripped down, off-brand Blu-ray player still costs $150 or more, which is three times as much as a good upscaling standard DVD player. And study after study has shown that most HDTV owners see standard DVDs as being good enough.

Blu-ray is making progress, but it’s slow. If you take out the game consoles, I don’t expect that it will ever reach 50% market penetration. I believe that electronic distribution of movies over the Internet or some similar means will overtake it long before it reaches that point.