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UPDATED -- Has HD DVD demise helped Blu-ray?

Bluray_logo2 The NPD Group released a report today showing that post-holiday sales of Blu-ray didn't exactly skyrocket after Toshiba folded the HD DVD tent in February. After dropping 40 percent from January to February, sales of set-top Blu-ray players (i.e., those not built into a PlayStation 3) crept up 2% in March, NPD said. HD DVD sales, meanwhile, fell off a cliff that month.

You could hypothesize that high-def disc players are suffering the same business-cycle doldrums as other consumer goods. More plausible is that conventional DVDs look so good on most high-definition sets (i.e., 42" and smaller), consumers don't see the need to invest in a pricey upgrade. Here's NPD's Ross Rubin's take, from the NPD release:

That standalone Blu-ray players haven’t picked up significantly from HD DVD’s loss shows that few consumers were dissuaded primarily by the ‘format war.' When we surveyed consumers late last year, an overwhelming number of them said they weren’t investing in a new next-generation player because their old DVD player worked well and next-generation players were too expensive. It’s clear from retail sales that those consumer sentiments are still holding true.

Notably, sales of relatively inexpensive "upconverting" disc players that produce simulated high-def pictures from conventional DVDs were 5% higher in Q1 2008 than in Q1 2007, NPD said.

Studios can try to goose Blu-ray sales by loading discs with features that aren't available on DVD. Beyond their advantages in capacity and audio-visual quality, the high-def discs offer far superior navigation and interactivity, including the ability to draw content from the Web. But the biggest factor may be out of Hollywood's control, and that's the price of the hardware. Back when VCRs were still king, sales of DVD players didn't really take off until prices dropped below $200 in 1999, and they weren't a mass-market item until they were available for less than $100. Most Blu-ray players are still priced well north of $300.

UPDATE -- Andy Parsons of Pioneer said his company, which makes premium-priced Blu-ray players, saw "a distinct increase in demand" after HD DVD hit the skids in early January. The implication is that sales would have grown faster if manufacturers hadn't scaled back production in anticipation of the usual post-holiday slow-down. Retailers are "screaming for Blu-ray players, they can't get enough of them," Parsons said. "If you don't have product to ship, obviously the numbers are going to be low."

Parsons also wondered whether consumers bought PS3's to satisfy their demand for Blu-ray players when they couldn't find a set-top version. It's hard to tell what motivated people to buy a PS3, though, so NPD's decision not to include those sales in its Blu-ray statistics is understandable.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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