Blockbuster embraces Blu-ray

Posted on Monday, June 18, 2007 by MegaZone

I read about this last night, but I was pre-occupied with some server issues at work so I’m just getting to post this.

Blockbuster has decided to expand Blu-ray rentals to 1,700 corporate-owned Blockbuster stores by mid-July. They’ve been test marketing HD DVD and Blu-ray in 250 stores, and they’ve seen a 70% preference for Blu-ray. They will continue to rent HD DVD from the 250 stores that have it now, as well as online via Blockbuster.com. They may expand HD DVD in the future if demand increases, but with BD outselling HD DVD at an increasing pace, this seems like just another nail in HD DVD’s coffin.

The only major studio not releasing HD content on BD is Universal. All of the other majors are releasing content on BD – most exclusively. (Warner and Paramount are the only two majors supporting both formats. Sony, MGM, Disney, Fox, Lionsgate, etc, are BD exclusive.) The format war isn’t good for anyone, so I’m in favor of anything that might help kill HD DVD so we can finally be done with it and move forward with one standard.

A recent Home Media Magazine, for June 10-16, 2007, lists the Nielsen VideoScan data for BD and HD DVD. For the week ended 6/03 it was 61% BD, 39% HD DVD, Year-to-Date 67% BD and 33% HD DVD, and Since Inception 59% BD and 41% HD DVD. I think the last is the most telling. HD DVD had a several month lead to market on BD, and had many more titles available. But BD has picked up steam and is growing at an accelerating rate, with sales sustaining at a level higher than HD DVD. That market share should continue to shift more and more toward BD.

I’ve said it before, and I’ll keep saying it – HD DVD is a dead format walking. BD has more support from studios, the consumer electronics industry, the computer industry, and the gaming industry. It is a technologically superior format with plenty of room to grow, unlike HD DVD. It has more capacity. A better interactive development platform. It is all-around a better choice for consumers. Don’t buy HD DVD, the sooner it withers the better for everyone. Buy BD or wait it out, buying HD DVD just prolongs the war.

Here’s Blockbuster’s press release, via PR Newswire…

Jun 18, 2007 01:15 ET

Blockbuster to Expand Blu-Ray to 1,700 Stores

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

DALLAS, June 18 /PRNewswire-FirstCall/ — In response to the growing demand for high-definition DVDs, Blockbuster Inc. (NYSE:BBI) (NYSE:BBI.B) today announced that it is rolling out an expanded Blu-ray disc inventory for rental to 1,700 corporate-owned BLOCKBUSTER(R) stores by mid-July. The Company will continue to offer both Blu-ray and HD DVD titles through its online rental service, www.blockbuster.com, and will continue to offer both formats at its initial 250 stores that currently carry both high-definition formats.

“We intend to meet the demands of our customers and based on the trends we’re seeing, we’re expanding our Blu-ray inventory to ensure our stores reflect the right level of products,” said Matthew Smith, SVP Merchandising for Blockbuster. “While it is still too early to say which high-definition format will become the industry standard, we will continue to closely monitor customer rental patterns both at our stores and online, so we can adjust our inventory mix accordingly and ensure that Blockbuster is offering customers the most convenient access to the movies they want, in the format they want.”

When Blu-ray and HD DVD were introduced to the marketplace in 2006, Blockbuster began offering the high-definition formats on all titles in which it was available through blockbuster.com. The Company also introduced both formats on select titles in 250 stores in November of 2006. With Blu-ray rentals significantly outpacing HD DVD rentals at its BLOCKBUSTER stores, the Company made the decision to expand the number of stores offering the Blu-ray format.

With the expansion in July, the 1,700 stores will be carrying more than 170 titles in Blu-ray and will continue to add titles in the format as they are released from the studios.

“We are excited to be able to make more high-definition titles available to our customers in those stores where our research indicates there will be the most demand,” said Smith. “Obviously, when customers are ready we can expand the Blu-ray offering into more stores and add HD DVD to more locations if that’s what customers tell us they want. We’ll continue to work with the movie studios to ensure we have the right assortment of products.”

Blu-ray formatted titles are available from Sony Pictures Home Entertainment, Metro-Goldwyn-Mayer Home Entertainment, FOX Home Entertainment, Buena Vista Home Entertainment, Lionsgate Home Entertainment, Warner Home Video, and Paramount Home Entertainment and can be played on Blu-ray dedicated players, Sony PLAYSTATION(R)3 (PS3(TM)) or a Blu-ray compatible computer drive.

About Blockbuster

Blockbuster Inc. is a leading global provider of in-home movie and game entertainment, with more than 8,000 stores throughout the Americas, Europe, Asia and Australia. The Company may be accessed worldwide at http://www.blockbuster.com/.

Source: Blockbuster Inc.

CONTACT: press, Karen Raskopf, Senior Vice President, or Randy Hargrove,
Senior Director, both Corporate Communications, +1-214-854-3190; or investor
relations, Angelika Torres, Director, Investor Relations, +1-214-854-4279, all
of Blockbuster Inc.

Web site: http://www.blockbuster.com/

About MegaZone

MegaZone is the Editor of Gizmo Lovers and the chief contributor. He's been online since 1989 and active in several generations of 'social media' - mailing lists, USENet groups, web forums, and since 2003, blogging.    MegaZone has a presence on several social platforms: Google+ / Facebook / Twitter / LinkedIn / LiveJournal / Web.    You can also follow Gizmo Lovers on other sites: Blog / Google+ / Facebook / Twitter.
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  • http://bjdraw.com Ben Drawbaugh

    While I agree with 95% of what you are saying, I have a few points of contention.

    The biggest one is “A better interactive development platform.”
    I own Blu-ray and have reviewed a few HD DVD players and I can tell you that based on what is available today HD DVD’s interactive layer is far beyond Blu-ray. I think this will change given enough time, because it’s based on Java and has potential, but if there is anything that HD DVD is doing right it is actually having the interactive layer down at launch, rather than having another revision this October.

    I think the war is actually good for consumers, sure some are on the side-lines, but the amount of free press coverage alone makes this worth it for both parties. As for the consumers, the war drives the prices down. I believe that if it wasn’t for the war the prices wouldn’t drop nearly as fast.

    But in the end I agree, it is only a matter of time till Universal starts producing Blu-ray movies, then the war is over.

  • http://www.gizmolovers.com/ megazone

    Yeah, there is a different between the platform and what is on discs today. BD-Java is based on the MHP/GEM platform that is a global standard for set top boxes – the same basis used for OCAP on cable boxes. It is a fairly powerful platform for development. But power often means complexity, and some of the early BD decks skimped on BD-J support.

    iHD is a fairly simple XML-based system, which makes development easy, but limits what can be achieved in the end. Toshiba pushed iHD a lot as a differentiator, so they really encouraged studios to lard up the discs with interactive content to have something to flog. BD has been a lot slower to push interactive content, but it is gaining momentum.

    In the end, BD offers more power for developers to do some pretty cool things. I look at it something like gaming consoles, where something like the PS2 had a lot of power but was hard to develop for, but once developers got their bearings things took off.

    I think the war is mixed. While there may be some forces driving prices down, it also limits volumes for both technologies, driving up the unit prices. And it drives up costs for Warner and Paramount to support both, which they must pass on to the consumer. Even the exclusive studios suffer due to lower sales volumes from a divided market, which means their overhead costs of production are distributed over fewer discs.

    If the war never happened, the competition would be between vendors – Toshiba and Sony would still be going at it, but just for BD market share – along with all the others.