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Blu-ray discs seen as bright spot in glum season

The Blu-ray disc, the high-definition successor to the DVD, was one of the few products that did well in the just-ended holiday season, with sales tripling from the previous year.
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A Blu-ray Disc logo is projected on the floor at the Panasonic booth at the International Consumer Electronics Show in Las Vegas.AP
/ Source: The Associated Press

The Blu-ray disc, the high-definition successor to the DVD, was one of the few products that did well in the just-ended holiday season, with sales tripling from the previous year.

The figures were released this week at the International Consumer Electronics Show, which last year was the scene of what proved to be a decisive victory for Blu-ray over a rival format, HD-DVD.

"It turned out to be a phenomenal year for Blu-ray," said Tom Adams of Adams Media Research.

Just before the 2008 CES opened, Warner Bros. withdrew its support for HD-DVD, giving Blu-ray a strong majority of support among Hollywood studios. A few months later, Toshiba Corp., the creator of the HD-DVD, said it would stop making players for the discs.

That left Blu-ray as the lone high-definition disc. U.S. consumers bought 28.6 million of them in the fourth quarter of 2008, according to The Digital Entertainment Group, a consortium of movie studios and electronics manufacturers. That's up from 9.5 million in the previous year. The biggest seller was "The Dark Knight," which was also the first Blu-ray disc to sell more than 1 million copies, said Andy Parsons, president of the Blu-ray Disc Association, which promotes the format in the U.S.

By Parsons' count, Blu-ray is showing a faster adoption rate than the DVD, the CD, high-definition TV sets and several other common household technologies. At the end of last year, 2 1/2 years after they first became available, there were 10.7 million Blu-ray-capable players in U.S., according to research firm DisplaySearch. Three years after the DVD launched in the 90s, there were 5.4 million DVD players.

But the 10.7 million Blu-ray players includes more than 6 million Sony PlayStation 3 game consoles, bought mainly for gaming. With those taken out of the comparison, sales of standalone Blu-ray players are similar to those of DVD players at the same point.

At CES this year, Blu-ray support is strong, with manufacturers announcing 18 new players. Sharp Corp. revealed the first high-definition TV set with a built-in Blu-ray player. Panasonic Corp. announced the first portable Blu-ray player.

It's also clear that the players are maturing: 11 of the new players have the BD-Live feature, which connects them to the Internet for interactive extras like games, downloadable trailers and chats with film makers. Only last year did the first BD-Live Blu-ray players appear, while the very first HD-DVD players that were launched in 2006 had comparable interactive capabilities. One HD-DVD disc even allowed online shopping for movie-related items.

After seeing the holiday sales figures, analysts believe Blu-ray sales will keep growing rapidly this year. Richard Doherty at Envisioneering Group believes 2009 disc sales will be five or six times 2008 sales.

"I've gone from being conservative for 2008 to now, for 2009, being cautiously optimistic," said analyst Paul Erickson at DisplaySearch. "We will continue to see steady and stable increases in Blu-ray disc demand."

About 40 million households have high-definition TV sets, so Blu-ray sales have plenty of room to grow. They're also still tiny compared to DVD sales. Americans spent $750 million on Blu-ray discs last year and $21.6 billion on DVDs.

Overall disc sales have been declining for two years in a row. So even if Blu-ray at some point manages to supplant the DVD as the main disc format, that victory may be somewhat hollow. Internet downloads and movie streaming services are growing dramatically.

But for now, Blu-ray has some time before the Internet becomes a real threat. Downloads have a hard time matching the quality of Blu-ray. Also, very few households have any sort of device that connect their TVs to the Internet.