A Cold Winter For Blu-ray

Roger Kay, President of Endpoint Technologies Associates, says Blu-ray sales will experience a dramatic drop during the holiday season and beyond, delaying the adoption process and putting the serious hurt on sales. Instead of dropping big bucks on Blu-ray players, consumers will instead turn to the technologies they have available, such as Netflix — which now charges extra for Blu-ray rentals — and streaming video. “If you can get movies over the wire on demand and have an entire library at your disposal on the screen a la Netflix, that’s the way you’re going to go,” Kay told The San Francisco Chronicle.

This bad omen comes after Steve Jobs called Blu-ray a “bag of hurt” and said Apple would delay integrating the technology into its products until “Blu-ray takes off in the marketplace.” And Blu-ray definitely isn’t taking off yet — its market share has dropped, and Sony, Blu-ray’s leading backer, hedged its bets on end-of-year sales, a gamble that may fall flat given the current economic climate.

Rick Clancy, Senior Vice President of Corporate Communications at Sony, notes: “For much of the year, consumers have continued to shop and continue to buy CE products at a pace outdistancing the economy as a whole and other segments like housing and automobiles.  In the past month or two, however, there have been signs of tentativeness. Retailers are now in a place where they have to start making some bets on consumer expectations as they place their holiday orders. And manufacturers like Sony have to be responsive and show the value that consumers will receive by sticking with the industry’s No. 1 brand.

Although the U.S. unemployment rate has increased somewhat, overall employment in the States pretty remains high. Call me an optimist, but even with the volatile stock market and shrinking retirement funds, I believe people still want to entertain themselves and their families with cool new products — perhaps now more than ever.

And one thing you can be sure of with consumer electronics is that the value of CE products keeps going up even when prices in general are often coming down. This axiom is true for flat-panel LCD televisions, Blu-ray Disc players, notebook computers, digital cameras, camcorders, videogame consoles and more. What other industry can say that?

I also believe that rewarding yourself (or getting a gift) with a new product from Sony (and, yes, some of our competitors) is a pervasive motivation that will continue even in these challenging times.”