Blockbuster to withdrawn HD-DVD and expand Blu-ray

[AthlonXP1800]

Today Blockbuster expect to make an announcement that Blu-ray is the HD format to replace DVD, they will expanding Blu-ray titles from next month and available to rent in Blockbuster's 1,450 stores.

More than 70% of Blockbuster customers rented Blu-ray titles over HD-DVD since late last year.

http://www.elpasotimes.com/entertainment/ci_6164939

This is the first massive defeat for HD-DVD. Take a look at DVDEmpire Hi-Def sales figures, Blu-ray now command 73% of Hi-Def sales. I suppose other video rental chains and retailers could quick follow suit with Blockbuster to announce withdrawn HD-DVD soon in the same footstep when video rentals and retailers announced Betamax withdrawn in around 1986 when VHS command 70% of video rentals.

Look like Hi-Def format war will be over this year sooner than people thought.

[nrdstrm]

I hope so...Not because I prefer one to the other, but I bought a PS3... :) So if BR wins, that would be a + for me purchasing the PS3. On the other hand, HD DVD players are cheap enough now that I could just go buy one.

[kev13dd]

I do see this as a major major blow. So many people are going to online rentals though, and since Blockbuster will keep HD-DVD online then maybe it can still survive? Hopefully one format wins just so we'll have one format. If Blueray is ganna be it... eh

K

[superklye]

Blockbuster is still around?

[ENU291]

So how did Blockbuster make this decision? Did they just study the last 6 months of HD movie rentals? It makes absolutely no sense to pull the plug on HD-DVD movies by judging just 6 months of rental activity. Who the hell is running this operation?

[Bman212121]

I helped contribute to that. :) I probably already rented 5 or 10 BR from them. Awesome news that they are going to bring them to the store.

FYI: The article doesn't say they are pulling out on HD-DVD, but they are just expanding their BR collection first since it is the most rented. So you can still get HD-DVD from them.

[superklye]

I helped contribute to that. :) I probably already rented 5 or 10 BR from them. Awesome news that they are going to bring them to the store.

FYI: The article doesn't say they are pulling out on HD-DVD, but they are just expanding their BR collection first since it is the most rented. So you can still get HD-DVD from them.
Everything Athlon says is slanted FUD.

[superklye]

Oh, and rather than this being a huge blow to HD DVD, I think it's probably going to be an even bigger blow to Blockbuster.

I wouldn't spend $800 on a player so I could rent the format Blockbuster carries. I'd spend $20/mo and go to Netflicks if it was that important.

[nopp0x00]

Oh, and rather than this being a huge blow to HD DVD, I think it's probably going to be an even bigger blow to Blockbuster.

I wouldn't spend $800 on a player so I could rent the format Blockbuster carries. I'd spend $20/mo and go to Netflicks if it was that important.

$800? Try 499, or cheaper on Ebay for a PS3, or 699 if you need Wi-Fi and the built-in memory card reader and the larger hard drive.

[tornadog]

I am glad to hear this, the guy at my local blockbuster had told me this way back in January and I dismissed it as just FUD, but now I must say he was smart!!!

Its kinda ominous that I should see this post today. The whole morning I was browsing the deal sites to find a good deal on a 360 hd dvd so I can sell off my ps3, and get a second LCD TV for my bedroom

[Ancient]

Blockbuster is willing to forego 30% of its hi-def business to cater to a single hi-def format? Something doesn't smell right about this. I suspect this might have less to do with the customer and more to do with BB being offered special pricing on their BD purchases as an incentive to drop HD-DVD.

I don't have any proof of that but I can't see BB completely dropping 30% of the hi-def revenue. Seems like a stupid business decision.

[superklye]

$800? Try 499, or cheaper on Ebay for a PS3, or 699 if you need Wi-Fi and the built-in memory card reader and the larger hard drive.
Um...I'm talking about high-end AV equipment, not a children's toy that happens to play BD movies.

[Ruined]

The MS response:

Would be happy to comment . Let’s start with pointing out the specifics that are in front of us:

1. All the tools we had to bring HD DVD to our customers yesterday, we have today and tomorrow. BB has and will continue to offer HD DVD to its customers in the 250 stores and online. Nothing has changed in this. Nothing. Note that the great pains they took in their press sub-heading to confirm their commitment to HD DVD:
http://blockbuster.mediaroom.com/index.php?s=press_releases&item=727

“Company will continue to offer HD DVD titles online and in select number of stores“

They would not go out of their way to confirm their intention in such a clear way to support HD DVD if they did not believe in viability of HD DVD.

2. Yes, they are expanding their offering to other stores. One would think though, that the core stores that carry both formats, were picked because they were closer to where potential customers are (e.g. higher income, higher probability of owning HDTVs, larger metropolitan areas, etc.). As such, the fact that those stores continue to carry HD DVD is very substantial aspect of this story.

3. Please read BB’s own press release – they clearly state that they cannot and are not stating a “winner.” And that they are very open to changing their distribution strategy in the future. Given the fact that they already carry HD DVD in such a broad basis already, making adjustments to that plan comes easily.

4. Both formats right now are niche products. As such, expansion to large set of stores is not that significant in itself. The key to expanding the market is to make the players more affordable. I can have 1000 Ferrari showrooms, but that doesn’t mean people will go and buy them in droves . The key is to bring the cost of that Ferrari to the level of a Honda and then you have it available in all the stores. Until then, the cart is being put before the horse. But still, I applaud BB for wanting to make HD more mainstream. And as soon as they do, we will be ready with HD DVD .

Please note that I am not saying this is not a positive development for BDA. It is. They have had a long drought wrt to getting more companies on board while we have been making progress in reverse (e.g. Circuit City carrying HD DVDs). But as you can imagine, by now we are used to press releases from companies in support of their format. Yet, BD remains a niche product as does ours frankly. The cost of products is simply too high, and the value too limited to consumer in relation to it, leading to small sales (and rentals). As such, our focus remains as I stated: getting the cost down, and making it more affordable for people to own the sockets which will eventually drive rental business. We have that advantage on the replication, and better interactivity to differentiate our product from DVD, but the playback devices still have room to come down in price to gain wider adoption….


Note that Blockbuster also supported DIVX (Digital Video Express) over DVD, the Circuit City disc-based PPV format competing with DVD that failed in the end - despite a year of exclusive support in Circuit City stores plus FOX and Walt Disney's excluisve support.

[superklye]

Hmm...Fox and Disney were backing DIVX and it failed? Wow...

What format were those two backing in this new war? ;)

[1337_Like_ThaT]

Blockbuster is still around?

Well if they are pushing near 1500 stores, UMmmm I would say they are still around :)

My local blockbuster has BluRay and HDDVD with about equal the amount of movies to each side and I've rented from both from time to time. Glad to see they are not ridding HDDVD for good on this store for all those Universal releases I would want to see, even better to hear the BD collection will be expanding

[Rakeesh]

No they aren't going to withdraw hd-dvd, rather they are leaving it as is (e.g. stagnant) while at the same time expanding their blu-ray titles.

Personally I haven't visited a video rental store in years, especially blockbuster which charges ridiculously high prices for new releases. Netflix ftw.

[Ruined]

A bit more from MS:

Q:
Hi Amir,
I've yet to walk into my local store and see an HD-DVD disc priced lower than it's BD counterpart.
If they are truely cheaper to produce, then this means the studios are taking the opportunity to rake in a higher profit.

While I cannot fault them for this, it seems like perhaps they should forego the extra profit to try to secure a larger footprint with the public (so that people walk into a store and see that HD-DVD is truely cheaper.)

If the average person walks in and see's the HD-DVD version of something is $5 more expensive, they won't be thinking "oh, maybe it's a combo disc", they'll just think "same movie, and the one in the blue case is cheaper".

Thoughts? Any word of this "cheaper" thing ever becoming a reality?

Thanks in advance,
Stuart

A:
If you want to take this thinking further, you have to wonder why the discs are not even more expensive than they are (in both formats) since studios don’t make money on hardly any titles in HD!

So what we have is not a proper economic system yet so we can’t judge it that way. You have companies subsidizing production of discs and not passing on the true cost to their consumers. You have small market where companies are investing strategically instead of economically. You have consumers not being price sensitive, buying $80 HD DVD/BD packages, etc. pushing a documentary and HD DVD test disc ahead of Hollywood titles in Amazon DVD rankings.

But as we look at this market, I think we all care about the time the format becomes mainstream. At that moment, you have to think of big numbers. I think I heard Warner alone stamps out close to half a billion DVDs a year! On that day, competition will be fierce forcing lower retail prices and cost of production will be a key factor.

On top of that, you have to look at where the supply comes from. HD DVD is not cheaper to produce because its plastics cost less than the same plastic used in BD . It costs less because it is possible to deploy it in existing DVD lines and as a result, just about any DVD line purchased in the last two years or so can, and many are making HD DVDs. This volume availability will invariably lead to lower cost due to higher level of competition for the business. You know, the old supply and demand rule in economics .

In addition, a typical BD line is $1.5M to $3M. Someone has to go and buy this line and dedicate it to making BD discs. And that cost will be passed on to people. Companies will not subsidize this business forever and certainly not through their competitors (i.e. one replicator helping the other). This is different again from HD DVD where the same line is already bought and being amortized on the backs of DVD business. So every day, we get more HD DVD capacity online, without having to lift a finger, or write a check.

Net, net, when we step out of the niche/artificial environment we live in, the strength of HD DVD comes into play strongly and result in lower cost to consumers. And yes, higher profits for some companies if the consumer/competition allows it.

Finally, on combo pricing, that has not hurt the sales of the discs as compared to other HD offerings in the eyes of studios. In the grand scheme of few titles making money, it is hard to argue the point strongly to the studios when a disc sells as well as non-combos. But again, once the market expands and true economics set in, the studios will get a better picture of whether they should charge the premium. But one thing is for sure. Combo discs are an incredible technical accomplishment and solve key consumer adoption problems. If we ever have hope of making these formats mainstream, we have to deal with the other “format war”: that of DVD and HD. The combo is the true “universal” format in that sense. So while like you, I am not happy that a premium is charged for it sometimes, I salivate at the thought of seeing DVDs being replaced one day with combo HD DVDs and consumers not even blinking. Connecting this with the BlockBuster discussion, combo HD DVDs can be shipped to them as DVDs and wind up in all of their stores, whether they make a conscious decision about carrying HD DVD or not. See how powerful of a card this is?

Oops, this became kind of long. Hopefully you didn’t expect a short answer.

[superklye]

Personally I haven't visited a video rental store in years, especially blockbuster which charges ridiculously high prices for new releases.
That's kinda what I was getting at with my "blockbuster is still around comment" meaning that there are plenty of alternatives making blockbuster nowhere near the video-rental powerhouse it was in its heyday.

[S.I.N]

Soon enough the headline is going to be "Best Buy to no longer to sell HD-DVD's" and the response will be "Who shops at B&M stores much less Best Buy?". I like HD-DVD but with things like this happening it's future as contender on the market is really telling. The faster there is 100% acceptance of Blu-Ray so the market is no longer split for movies the better is the way I see it.

[ephmrl]

The faster there is 100% acceptance of Blu-Ray so the market is no longer split for movies the better is the way I see it.

Meh, it's better if adoption rates for both camps continue to languish like they are. Hopefully the financial burdens for Toshiba and Sony will reach a point that they will finally concede and cooperate with each other and make a better standard than what either offers alone now. I.E. high capacity, standards for bitrates & visual fidelity (to put the capacity to good use), flexibility to use whatever codec (at a high enough bit rate to match a high visual quality in the other codecs), elimination of redundancies like multiple lossless audio encodings, multiple interface language standards/versions, etc. Sure that will sting for the early adopters with PS3's, xa2's, etc., but at least it would benefit the masses in the mainstream still holding out :)...

[superklye]

Soon enough the headline is going to be "Best Buy to no longer to sell HD-DVD's" and the response will be "Who shops at B&M stores much less Best Buy?". I like HD-DVD but with things like this happening it's future as contender on the market is really telling. The faster there is 100% acceptance of Blu-Ray so the market is no longer split for movies the better is the way I see it.
You like HD DVD? Please. All you do is **** on it and spread the same caliber FUD as Athlon.

[S.I.N]

Meh, it's better if adoption rates for both camps continue to languish like they are. Hopefully the financial burdens for Toshiba and Sony will reach a point that they will finally concede and cooperate with each other and make a better standard than what either offers alone now. I.E. high capacity, standards for bitrates & visual fidelity (to put the capacity to good use), flexibility to use whatever codec (at a high enough bit rate to match a high visual quality in the other codecs), elimination of redundancies like multiple lossless audio encodings, multiple interface language standards/versions, etc. Sure that will sting for the early adopters with PS3's, xa2's, etc., but at least it would benefit the masses in the mainstream still holding out :)...

Thats sounds good but I don't think it will ever happen because they will be putting the PS3 on the line.


You like HD DVD? Please. All you do is **** on it and spread the same caliber FUD as Athlon.

I have more movies on HD-DVD and I have never spread any "FUD" on it. I don't even think I have responded in any topic here dealing with HD-DVD. What I have done is defended Blu-Ray in the PS3 in the game section and I'm guessing thats why you just spouted that ****.

[lduguay]

Anyways, i'm pretty sure both formats will fade or fail. The same thing happened to DVD-A and SACD. HD-CD is almost dead. Then again this is only my opinion.

[superklye]

I have more movies on HD-DVD and I have never spread any "FUD" on it. I don't even think I have responded in any topic here dealing with HD-DVD. What I have done is defended Blu-Ray in the PS3 in the game section and I'm guessing thats why you just spouted that ****.
orly? Here's one right off the top of my head.

http://www.nvnews.net/vbulletin/showpost.php?p=1244041&postcount=2

Completely unsubstantiated FUD. I don't have time to search through all of your posts, but you've made your stance abundantly clear on more than one occasion.

[superklye]

Anyways, i'm pretty sure both formats will fade or fail. The same thing happened to DVD-A and SACD. HD-CD is almost dead. Then again this is only my opinion.
5.1 audio can't even be compared to this. Most people don't care about anything other than 2.0 stereo audio. That truly was designed for a niche market. Look at the absolute dominance of MP3 players.

HD movies is a different beast entirely. HD video is the way of the future; millions already own HD sets and it's the federal standard come 2009. HD isn't going away and the difference between an SD/HD picture is far more noticeable than 5.1/2.0 audio to the vast majority of people.