• by Aaron Baar , May 6, 2009

It was only a year ago that Sony's Blu-ray Disc format emerged victorious over high HD DVD in the battle for next-gen disc supremacy. Since the dust has settled, it seems the format is catching on.

According to the NPD Group, consumers bought more than 400,000 Blu-ray players in the first quarter of 2009, an increase of 72% over the same period last year. Dollar sales, however, increased only 14% to $107.2 million, reflecting the sharp drop in price over the past year.

"We're seeing the impact of cost-reduction and increase in available content, as well as the penetration of high-definition televisions driving the increase," Ross Rubin, director of industry analysis at NPD Group, tells Marketing Daily. "Even as options expand for accessing movies digitally, Blu-ray is carrying forward the widespread appeal of DVD into the high-definition marketplace."

According to NPD, the average selling price for a stand-alone Blu-ray Disc player dropped nearly 35%, from $393 in the first quarter of 2008 to $261 in the first quarter of 2009. Those prices will likely continue to fall, with the average price dropping to $214 over the next six months, NPD says.

Meanwhile, awareness of the format has reached 90% in the United States over the past six months. Six percent of consumers said they were "extremely or very likely" to purchase a Blu-ray Disc player in the next six months, compared with 5% who responded similarly in August 2008.

The increase in sales during a recession also indicates that consumers are choosing to upgrade to Blu-ray as their old DVD players cease to function, Rubin says. While the first generation of Blu-ray buyers was interested in technology, the latest buyers are more wary, looking to make sure there's value in the higher prices. "These consumers are a critical component for Blu-ray growth," he says. "Particularly in this economy, we're not seeing people throw out functioning DVD players."

When it was introduced to consumers in 2003, Blu-ray was competing with another format, HD DVD, setting up a VHS versus Beta battle for format dominance. In January 2008, Warner Bros. announced its intention to use the Blu-ray format. Shortly thereafter, Toshiba said it would stop producing HD disc players. Although not as important as price, the resolution of the issue has played a part in consumer adoption of the technology, Rubin says.

"That was certainly impeding the growth of both categories," he says. "The format was a factor [in the dramatic increase in sales] but it was really price and satisfaction with DVD picture quality."