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Tuesday, November 18, 2008
BDA: Blu-ray Builds Strong Base in Europe

Despite the economic downturn, the The Blu-ray Disc Association European Promotions Group believes that that the Blu-ray Disc format is having a profound impact on Home entertainment markets throughout the European region.

Last week in Amsterdam, the Blu-ray Disc Association European Promotions Group organized a seminar where members from across Europe reported on the status of their domestic Blu-ray markets.

According to the presentations that appeared in the two-day seminar, the Blu-ray format is showing considerable growth in both the consumer hardware and software sectors. The BDA members believe that Christmas sales period will be a dynamic period for manufacturers and content owners.

"Despite the economic downturn, we are experiencing strong and solid growth in every national territory," commented Frank Simonis, Chairman of the BDA European Promotions Committee. "What we have learned from this meeting is that market conditions vary country by country in Europe ? our markets reflect the nature and character of each country ? however Blu-ray is just as appealing to consumers in Scandinavia, as it is in France, UK and Italy."

The event heard from Jim Bottoms from specialist media analyst house, Futuresource Consulting who gave an up-beat assessment of the outlook for Blu-ray disc in Europe.

In the US, Bottoms believes that the Blu-ray train is now running with such momentum that it is almost impossible to stop it. He predicts that 6 million Blu-ray players will be sold in 2009 rising to 15 million in 2010. Bottoms noted that US retailers are being creative in face of the economic downturn with many stores bundling Blu-ray Disc players with large screen HDTVs.

Europe is lagging behind the US ? mainly due to the six month delay in the launch of PLAYSTATION3, which remains the killer application in the BD hardware market on both sides of the Atlantic.

Another factor influencing HD?s uptake in Europe is the relative scarcity of HD broadcast services which has a knock-on impact on HD?s awareness. Bottoms estimates that by the end of 2008 only two per cent of European homes will be accessing HD content compared with one third of US homes.

"However, Europe will continue to buy new HD screens, albeit in slightly smaller screen sizes thanks to the credit crunch," stated Bottoms. "By 2010, almost half the screens shipped in Europe will be 1080P and combine this with a mixed picture in terms of HD broadcasts and you have a natural market for Blu-ray Disc."

Bottoms predicts a progressive build-up of BD player sales in Western Europe, rising from 800,000 this year to seven million in 2010 and 21 million by 2012.

"In Europe, by 2012, about one quarter of homes will have a standalone Blu-ray Disc player with PS3 being installed in addition in over half these homes," suggested Jim Bottoms.

Bottoms believes this continued growth in the hardware installed base will have a positive effect on Blu-ray Disc sales. He sees BD movie disc sales rising from 11 million in 2008 to close to 100 million in 2010 and 240 million in 2012.

The BDA has created national task forces in many European countries and these are working within their own markets to grow Blu-ray Disc into a mainstream home entertainment platform. The task involve close collaboration with retailers, content publishers and equipment manufacturers.

According to the Nordic task force, the biggest challenge facing them within their region is to turn the television viewing public on to the advantages of Blu-ray Disc and High Definition. "Research shows that by the end of 2008 just 17.9 per cent of HDTV households in the Nordic region will be watching HD images," explained Jonas Cederroth from the Nordic Task Force and Walt Disney Studios Home Entetainment. "This presents us with a challenge to win over the hearts and minds of a large majority of consumers."

In setting a strategy to achieve this goal the Nordic task force has identified the key importance of the retail channel in influencing consumer spending. Within the region some 350 stores have received Blu-ray kits, which comprise metal displays, folders and posters. They are working with numerous retailers, encouraging them to create Blu-ray branded shelves and sections within their stores.

Despite relatively low BD standalone player sales compared with this year?s forecast, partly due to supply chain issues, the Nordic task force can report some strong growth figures for this year. By the end of 2008, it believes that there will be 623,250 Blu-ray capable players in the region compared with just 255,000 in 2007.

Nordic countries target shoppers with Blu-ray Disc message Blu-ray Disc in-store communication with MediaMarkt Belgium.

The Benelux (Belgium, Netherlands and Luxembourg) task force has also seen a sharp focus on two groups - consumers and retailers.

The retail channel is critical to the successful adoption of Blu-ray Disc in the Benelux region since in-store communications are so influential in guiding consumers in their purchasing decisions. "We have focussed on a specific sort of retailer ? those that want to differentiate themselves through Blu-ray," explained Danielle Tamis from the Benelux task force. "Blu-ray can pull consumers into a store, but when they enter the store they need clear displays, informed staff and good availability of hardware and software. This was our intention and the strategy has worked well."

One of the earliest adopters of this Blu-ray Disc initiative was MediaMarkt Belgium, which launched its Blu-ray drive last May. To assist the retailer, the Benelux task force supplied on-line training tools which provide retail staff with all the information they need to assist customers in store.

Working with MediaMarkt, the task force produced a 24-page catalogue of BD titles which was available in-store as well as being inserted within the retailer?s own magazine.

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