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The Bad Economy Blu's - October 31, 2008

Ruh-roh. Susanne Ault of Video Business reports that sales of standard DVDs fell in October as the economic downturn led consumers to cut back on entertainment spending--supposedly a recession-proof business. "The theory is that this business is recession-proof, but that is flawed," one store buyer told Ault. "We’re definitely seeing an affect on titles, where they are not selling as much as they did last year. Customers are also looking for more deals than ever." Retailers said sales of major October DVD releases, including Paramount’s Indiana Jones and the Kingdom of the Crystal Skull and Sony Pictures Home Entertainment’s You Don’t Mess With the Zohan have fallen below expectations based on their box-office grosses.

Not a good omen at all for Blu-ray Disc heading into a critical selling period for the format. If consumers are foregoing relatively inexpensive DVDs due to concerns over the economy, selling them on a new, more expensive format this Christmas--a daunting challenge under the best of circumstances--is looking ever-more doubtful.

As Media Wonk has argued before, time is not Blu-ray's friend. The longer it takes the format to gain altitude, the more consumers will make other choices for getting HD content. Even after the economy recovers those choices will be hard to reverse.

UPDATE: This kind of stuff doesn't help either.
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