DVD Sales Drop Faster Than Blu-ray Can Rise

Analysts say last year's dip in sales, the first ever, will worsen.

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Others agree that Hollywood and its partners may have squabbled too long: Blu-ray's victory in the format war may be too late to salvage the sale of DVDs. Consumers spent less on the disks in 2007 than the year before, the first drop in DVD revenues since they became a household staple. And this year is unlikely to be any better, reports Pali Research.

Sales of Blu-ray disks will triple, say analysts Richard Greenfield and Mark Smaldon in a new report. But that won't make up for the steady decline in other disk sales. Overall, the analysts predict that studio disk sales will drop nearly 5 percent this year, after a fall of nearly 2 percent last year.

The future is unlikely to get much brighter, the Pali analysts say. They fret that pirates will steal more video as bandwidth increases across cable and telco networks. Oh, and then there are the legal alternatives: "We are seeing an ongoing evolution in digital distribution (both paid download and advertising-supported models), which cannot be positive long term for the physical formats such as the DVD."

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