Monterey (CA) - It will take high-definition media - HD DVD and Blu-ray - another six years to surpass the revenues generated by standard definition DVDs, a market forecast suggests. Even with sales that are estimated to come in at less than $100 million this year, the battle between the two HD formats has begun to show a negative impact on the video industry.
According to Kagan Research, the total home video market, including sold and rented movies, will dip about 0.4% to about $24.1 billion in 2006. The decrease is mainly attributed to an 8.3% decline in rental revenues, down to about $7.2 billion, which the research firm attributes especially to the increased popularity of video-on-demand download services. Online services are estimated to have captured 2.8 billion and has been growing on an annual pace of 182% since 1997, Kagan said.
For the short term, Kagan believes that "the boom times are gone for the home video industry and the situation may become worse in the wake of a high-definition DVD format war." According to the firm, high-definition, however, will be key for the industry on the way to stabilizing and growing revenues. "By 2009, VHS will be virtually extinct and high-definition DVD revenue should grow to more than $2.6 billion as the format war works itself out, either via one winning format or a combination HD DVD/Blu-ray player being introduced to the market," Kagan said.
