UK retail sales in general fared badly in 2010 with the extensive December snow widely blamed for poor results. Consumer confidence also continued to suffer in the final quarter of 2010. Fears of a double dip recession, low GDP growth in Q3 and the promise of crippling public spending cuts have all contributed to consumers' hesitancy to spend.

The cuts in the consumer price of BD players, widely expected by the industry in Q4 2009, finally arrived in Q4 2010 with many entry level players priced below £100 ($162) and GfK reporting an overall average price of just £165 ($265) in December. However, even with the incentive of beating the impending January 2011 increase in VAT (sales tax) to 20%, UK consumers proved reluctant to upgrade.

Poor economic indicators have stymied the growth of BD player penetration in the UK and are likely to continue to do so for the foreseeable future.  The lower entry level pricing on hardware will, however, enable the format to grow as an affordable replacement for defunct DVD players and as an add-on sale for HDTV sets, now the standard replacement display type in the UK. The next challenge for the industry will be how to convert as many of these de facto BD homes as possible into active consumers of BD software.

IHS Screen Digest UK hardware forecasts to 2015 have been revised to reflect the new data but will be reviewed again in light of year-end economic figures and forecasts from our sister company IHS Global Insights and hardware shipment data from IHS iSupply. Subscribers will be notified of any changes through the usual channels.