Blu-ray still has the blues (TW)

By R. Kinsey Lowe

Blu-Ray was heralded as the savior of home entertainment, but with just 6% of the segment's revenue, according to The Wrap, the next generation hasn't been embraced as quickly as the studios had hoped.

More than three years since its U.S. launch, Blu-Ray lags dramatically behind wildly successful predecessor, the DVD, at the same point in its consumer lifespan, according to tracking service the Digital Entertainment Group.

�The bulk of the transactions are still coming from standard-definition DVD,� noted Brad Hackley, vice president of another tracker, Rentrak.

Last week, however, Rentrak released some hopeful data for the home entertainment business, which has plummeted since hitting an apex in 2004.

The company found that rental revenue from traditional DVD and Blu-ray movies and TV shows and alternate delivery methods such as digital downloads, had increased 8.2% to $5 billion for the first three quarters of 2009.

Despite the good news, rental revenue regains little ground from a precipitous decrease in higher-margin disc sales � indeed, the overall home-entertainment market declined 3.9% to $9.7 billion, according to Digital Entertainment Group.

That's because sales of DVDs were down 16% to $5 billion.

Studios have been quick to blame low-price rental services such as Redbox for the decline.

But the real problem has been the failure of the glacial pace of the public's acceptance of Blu-Ray. As a result, both discs and players have come down in price far more quickly than DVD at the same point.

�Blu-ray hardware and software prices are coming down faster than anyone wanted them to,� consumer electronics analyst Richard Doherty of the Envisioneering Group told The Wrap.