Blockbuster Blu-ray announcement: Master Thread

[Bob Meridian]

From the Associated Press

AP Exclusive:
Blockbuster to favor Blu-ray HD discs over DVD format
By Gary Gentile / AP Business Writer
Article Launched: 06/17/2007 02:40:24 PM MDT

LOS ANGELES - Blockbuster Inc. will rent high-definition DVDs only in the Blu-ray format in 1,450 stores when it expands its high-def offerings next month, dealing a major blow to the rival HD DVD format.
The move, being announced Monday, could be the first step in resolving a format war that has kept confused consumers from rushing to buy new DVD players until they can determine which format will dominate the market.

Blockbuster has been renting both Blu-ray and HD DVD titles in 250 stores since late last year and found that consumers were choosing Blu-ray titles more than 70 percent of the time.

"The consumers are sending us a message. I can't ignore what I'm seeing," Matthew Smith, senior vice president of merchandising at Blockbuster, told The Associated Press.

Blockbuster will continue to rent HD DVD titles in the original 250 locations and online, the Dallas-based company said.

The decision was helped in large part by the lopsided availability of titles in Blu-ray, Smith said. All major studios except one

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are releasing films in Blu-ray, with several, including The Walt Disney Co., releasing exclusively in Blu-ray. Only Universal Studios, which is owned by General Electric Co., exclusively supports HD DVD.
Warner Bros., a unit of Time Warner Inc., and Paramount Pictures, which is owned by Viacom Inc., release films in both formats.

"When you walk into a store and see all this product available in Blu-ray and there is less available on HD DVD, I think the consumer gets that," Smith said.

The rollout of Sony Corp.'s PlayStation 3 game console, which comes standard with a Blu-ray drive, also helped give the format momentum, Smith said.

Blockbuster's decision, while significant on it's own, could boost Blu-ray even more if other retailers follow suit.

"It will help shift the balance toward Blu-ray, clearly," said Richard Doherty, president of The Envisioneering Group, a research company.

The North American HD DVD Promotional Group said Blockbuster's decision was shortsighted and skewed by the success of films released by Blu-ray studios in the first three months of the year. The group said HD DVD has since gained momentum, selling more players and popular titles such as "The 40-Year Old Virgin" and "The Matrix" trilogy.

"I think trying to make a format decision using such a short time period is really not measuring what the consumer is saying," said Ken Graffeo, co-president of the group.

The two formats have been battling it out since they both hit the market last year. Studios hope the high-definition discs, with their sharper picture and more room for interactive special features and games, will replace standard definition DVDs.

The formats are incompatible and neither will play on standard DVD players, although standard DVDs can be viewed with either a Blu-ray or HD DVD player.

The Blu-ray camp has been helped by the release of such huge hits as "Casino Royale," ''Pirates of the Caribbean" and "Spider-Man" coming out exclusively in its format.

As the battle has unfolded, the price of the high-definition players needed to show the movies has plummeted. Toshiba Corp., the major supporter of HD DVD, is selling its player for $299 with a rebate, down from $499 when it first went on sale.

Sony, which is pushing Blu-ray, recently slashed the price of its player by more than half to $499. The player retailed for $1,000 when it first was introduced.

[Rakesh.S]

wow this sucks..I was just getting ready to sign up for blockbuster in hopes of renting HD-DVDs from the local stores through total access.

[cnickersonjr]

40 year old Virgin is a popular title?. Not good news for HD-DVD or Blockbuster.

[MichaelHDDVD]

Good job Blockbuster, as a long time member it looks like I will have to switch to Netflix. You don't carry the product I want so you don't get my money

[ChrisBeveridge]

It's not a blow. It's just a flesh wound.

Visions of Monty Python flow through my mind...

[LiquidX]

Sounds a bit premature of Blockbuster to make that decision when Toshiba's standalones are currently selling well.

70% is for Blu-Ray? Probably from PS3 owners trying to justify their $600 purchase since there isn't many PS3 games available.

I'd like to see Netflix's HD rental ratio.

[krinkle]

Originally Posted by ChrisBeveridge

It's not a blow. It's just a flesh wound.

Visions of Monty Python flow through my mind...

LOL!

------


Anyway if true, this is another major victory for Blu-ray. J6P is Blockbuster's #1 customer and soon all he'll see are blue cases in the HD section.

[theone2]

http://www.blockbuster.com/browse/co...s/hdDvdPackage

[desmond212]

Spiderman?

[ryoohki]

Bob : Do you have a link to that article, i want to put it on my site....

[RUR]

Here's a link:
http://www.pittsburghlive.com/x/pitt.../s_513097.html
or
http://www.elpasotimes.com/entertainment/ci_6164939

[JackBee]

Who will be next to drop HD DVD from its stores?

[ack_bk]

I think this is a pretty big blow for HD DVD. After numerous problems with Netflix, I cancelled my subscription awhile back and have been patiently waiting for my local Blockbuster stores to get HD DVD or Blu-Ray or both (I am neutral). I am happy to hear that Blockbuster is going to expand Blu-Ray to all their stores. This is good news for Blu..

[deckerm]

So what are these 250 stores, the big money makers? If they are going blu only, i dont follow the "Blockbuster will continue to rent HD DVD titles in the original 250 locations and online, the Dallas-based company said." story.

[sivartk]

wow, right now Wal-Mart has 1 more blu-ray disc than my blockbuster carries....and that would be 1 total.

If dual format players don't become available under $500 soon (ones that work with all BD features and HD DVD features) then all the warriors will be dead...kind of a like a double knock out in boxing. No one wins and it becomes a niche format. (I.e. minidisc, SACD, DVD-A, etc)

Yeah and someone better quickly find a way to backup any HD format I buy.

[beatboy77]

This is FANTASTIC News!! I think we will see Bestbuy doing the same thing shortly and other retailers as well. I have seen decreased shelf-space for HD-DVD at my local Bestbuy stores, Circuit City, Wal-Mart and Sears.

Look for a "Big" announcement from the BDA on 6/20/07.

~Josh

[sivartk]

Originally Posted by TheSimplePanda

In Toronto, I know Rogers is also doing a trial of both formats at some of their large B&M locations (Jarvis and Bloor comes to mind) - if they also decide to roll out Blu-ray exclusively at all their locations, in Ontario at least HD-DVD will be more or less locked out of the traditional rental market.

Isn't everything a monopoly in Canada? TV, Banks, Wireless Service, Heathcare, etc.

[Amel]

major blow for HDDVD

someone will do the same in a month or two, maybe bestbuy?

[JWhip]

This announcement clearly is a problem for HD DVD but not a death blow. It may turn out to be one but does not have to be. If HD-DVD machines continue to sell well, Blockbuster may have to change their minds. It would be interesting to see if there was any behind the scenes maneuvering by the BDA with Blockbuster to get this result. In any event, there is still very little interest in HD media by consumers are evidenced by the HD/BD sales figures and will continue to be until player prices come way down. DVD is enough for most people. DVD rentals will continue to dominate. It would be interesting to see just how well BD rentals do at Blockbuster. In any event, it looks like I will have to get that new Panny this week.

[darinp2]

In the short run it could get some buyers to move to renting and hurt disc sales figures, but in the long run I think having discs available for rent is important and should help Blu-ray player sales (especially when combined with the $499 MSRP for the new Sony). As far as Universal complaining about the short period, Ken Graffeo and Universal chose not to have many releases in Q1. They knew it could have consequences. Just like Fox should know now that there could be consequences to their slow to non-existant period.

As far as still renting HD DVDs at those 250 stores and online, I wonder if those 250 stores will continue to get new HD DVDs in or just rent the ones they already own. I'm guessing that online they will continue getting new HD DVDs.

I rent from 2 Hollywood Video stores locally and they have about 2/3rds Blu-ray and 1/3rd HD DVD from last time I checked. This could make their HD DVD releases more popular in comparison since the Blockbusters near them don't currently rent discs for either format.

--Darin

[Bob Meridian]

Originally Posted by TheSimplePanda

I think the issue is that this will begin to create a snowball effect for HD-DVD sales.

One of the things I've heard from friends who are aware of this format war is "I'll buy when I can rent the movies".

Blockbuster themselves may not be the ones firing the fatal shot here, but they may start a chain of events that leads to that shot in the end.

Yep. Best Buy may look at this as a sign and stop stocking HD-DVD. That will cause CC to stop stocking HD-DVD and that will cause CompUSA/Wal-mart/target etc. to stop stocking HD-DVD and so on.

It’s a good theory.

[jmpage2]

Like it or not this is pretty bad for HD DVD. While I anticipated an eventual move by retailers to "end" the format war by deciding for the consumer what they would stock, I never expected it to happen this quickly.

Rather sad if this thing gets decided by a gaming console.

[dad1153]

I'm an HD-DVD supporter and there's no way to spin this into a positive. This is good news for Blu-ray... for real!

[theone2]

Originally Posted by MichaelHDDVD

Didn't you know? Selling 1 movie per player is the BDAs idea of "kicking teeth"

No you are wrong...actually it's 0,5 sold movie per player

[raaj]

I'd say that this "COULD" be a big blow for HD-DVD if they don't play it right from here on in. No doubt there were some deals forked out in the board rooms to come up with this deal, and there is no reason why HD-DVD PRG shouldn't reapproach Blockbuster to offer them an incentive to carry HD-DVD in stores.

Right now, I don't see HD rentals being that big of a market - PS3 factor not withstanding. But the coming 12 months will shape up the destiny of both formats.

[theone2]

Originally Posted by TheSimplePanda

And what is your opinion on Blockbuster exclusively rolling out Blu-ray?

"Blockbuster will continue to rent HD DVD titles in the original 250 locations and online"

[desmond212]

Originally Posted by theone2

"Blockbuster will continue to rent HD DVD titles in the original 250 locations and online"

do you know how many stores blocbuster has?

[dad1153]

Looks like I'll be getting a Netflix subscription then!

[LiquidX]

Originally Posted by jmpage2

Like it or not this is pretty bad for HD DVD. While I anticipated an eventual move by retailers to "end" the format war by deciding for the consumer what they would stock, I never expected it to happen this quickly.

Rather sad if this thing gets decided by a gaming console.

Most sensible post here. I don't see why anyone would be happy about that, regardless if it favors their choice. I guess we no longer live in the times where/when consumers chose what they want, instead leaving it up to corporations to "tell" us what we want.

I guess this all falls exactly how Sony wanted it too. Force the format onto everyone.

[MichaelHDDVD]

Originally Posted by TheSimplePanda

And what is your opinion on Blockbuster exclusively rolling out Blu-ray?

It is a definite win for the extremely Pro-DRM Sony/Fox. At least when(if) I get a Blu-Ray player I'll be able to watch Blu-Ray movies and I won't have to purchase any.