US consumer spending on packaged home entertainment – rental and sales of DVD and high-def disc formats – fell by 5.5 per cent in 2008, to USD $22.4 billion, according to the Digital Entertainment Group.

Spending on DVD purchases fell more dramatically than the total, declining by 9 per cent, to about USD $14.5 billion, and the shipment of DVD units was down almost 15 per cent in 2008 to 1.4 Billion

That contrasts with expenditure on high-def discs, primarily Blu-ray Disc, which almost tripled during the year to reach USD $750 million.

The figures, compliled by DEG with input from all the major studios, which while still dwarfed by those for DVD show that Blu-ray software shipments grew 250 per cent, to 63.2 million units in 2008, from 18 million units in 2007.

Sales of Blu-ray players, including videogame consoles, meanwhile, grew to almost 10 million units since the format’s launch.
The trade group said that in the fourth quarter alone, 3 million devices were sold.

The DEG figures coincide with a SNL Kagan report that says Blu-ray discs will soon rescue the industry.

Kagan suggests the growth of Blu-ray will eventually make up for losses in the standard-def category.

"Retail revenue should start to grow again in 2010. Sales should start a short period of growth as high-definition player prices drop below $200 in 2011 and Blu-ray really begins to penetrate the mass market," Kagan says in its report.

Blu-ray players in the US dipped under USD $200 at the end of 2008 and Vizio is to launch a USD $199 Blu-ray player in April.

Kagan said Blu-ray sales represented less than three percent of home video revenue in 2008. But the research firm projects that it will grow to around 19 percent by 2011.

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