avatar_dvdConsumer spending on Blu-ray and DVD is going to decline on average by 3.5% a year between over the next five years. So says London-based consultancy Screen Digest, which predicts the amount spent overseas on “packaged media” will drop to $14.5 billion by 2014, compared with $17.1 billion last year. If Screen Digest’s estimates are right, then Blu-ray and DVD sales will nosedive 22% internationally between 2007 and 2014.

The consultancy blames expensive Blu-ray players plus the worst recession in living memory for the format not taking off overseas the way it has done in the States.

Blu-ray will account for 35% of total international spending on physical video formats by 2014. By contrast, Blu-ray will represent over 68% of physical video purchasing in the USA that same year.

However, the States faces an even steeper decline in spending on DVDs and Blu-ray between 2007 and 2014 – a car crash of 35%.

Contrary to some reports, Avatar has done nothing to improve the prospects for Blu-ray outside of the US. In the States, 50% of those who bought Avatar in its first four days of release did so with Blu-ray. Outside of America, the percentage of Blu-ray sales for Avatar was about average. This was certainly the case in the UK, where a supermarket price war broke out. You could buy Avatar on DVD for as little as £8 ($11.40), barely half the £15 charged for Blu-ray.

Helen Davis Jayalath, video analyst, says: “The situation in the UK is particularly difficult for BD. As long as the deep discounting of the standard definition format by supermarkets continues, Blu-ray adoption will continue to be slow because the price differential is simply too large for most consumers to justify in today’s climate of austerity.

“Furthermore, the failure of Blu-ray to capture enough of the market in 2009 means this downward trend is now set to continue, with the short-term uplift in video spending that we had previously expected to see in 2010-11 now unlikely to materialize.”