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Blu-ray Disc is not being adopted as fast as once expected, but the format’s relatively steady growth remains a huge driver for the home entertainment business, according to Futuresource Consulting. At a presentation at the Entertainment Supply Chain Association Conference here Tuesday, Futuresource predicted that by 2012, Blu-ray software sales will make up half of home entertainment business.

The company downgraded its original expectation of 95 million software units sold this year to 75 million at least partly due to weak software attachment rates to the PlayStation 3, which is the most popular Blu-ray player in households. PS3 owners generally purchase one to two Blu-ray film/TV titles each year, versus the five to eight such titles that Blu-ray set-top-player owners purchase annually.

However, the situation should reverse over the next few years because falling pricing will push Blu-ray set-tops, and their strong Blu-ray software consumers, into the dominant position over PS3.

Now, household penetration of high-definition hardware in the U.S. is split 3% set-top and 6% PS3. That will switch in 2012 to 53% set-top and 22% PS3.

“This is all about pricing,” said Alison Casey, Futuresource head of global content. “In 2012, you’ll see entry-level Blu-ray pricing at $50. At that point, Blu-ray will become mass market.”

As the maturing standard-definition DVD market should continue to lose value—down 13% in revenue in the U.S. in 2009, estimates Futuresource—Blu-ray’s momentum will be responsible for stabilizing the category. With Blu-ray software making up 50% of the market in 2012, digital will comprise 29%, split between TV video-on-demand at 16%, online video at 10% and mobile sales at 3%.

“Blu-ray is vital and important to keeping disc volume healthy,” said Casey. “Blu-ray is going to help sustain a flat packaged-media market.”

Futuresource also is optimistic for the business because, the company says, Blu-ray owners are heavy media consumers in general.

When the company recently surveyed consumers, 85% of Blu-ray households said they buy discs versus 62% of non-Blu-ray owners. Also, 81% Blu-ray owners said they rent discs, compared to 59% of non-owners who said the same. With purchasing new movies online, the breakdown was 11% Blu-ray, 3% non-owners.

Studio executives also are upbeat about Blu-ray’s consumer uptake. Sony Pictures Home Entertainment senior VP Tracey Garvin sees rising attraction for the studio’s BD Live Blu-ray features.

“There have been nearly 5 million people who have visited Sony’s [BD Live Web] portal,” Garvin said during a Tuesday ESCA session moderated by Video Business’ Marcy Magiera. “That’s very, very encouraging.”

She also cites success with an Angels & Demons e-movie cash offer offered via BD Live on Sony’s April 28 Blu-ray release of The Da Vinci Code.

“The redemption rate on that more than doubled what we would normally get if we had stickered the offer on top of the disc package,” said Garvin.

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