Blockbuster chooses Blu-ray

[BoSoxMole]

In a huge blow to Toshiba, Universal, and the rest of the HD DVD devotees, rental giant Blockbuster has decided to stock only Blu-ray discs in the vast majority of its nationwide locations, although HD DVD titles will continue to be offered online and in the 250 (out of 1,450) stores that have been testing both formats since last year. Blockbuster VP Matthew Smith revealed to the AP that the decision to go with Blu-ray -- which will reportedly be announced tomorrow -- stemmed from an overwhelming customer preference for those titles in the test markets, accounting for over 70% of all HD discs rented. Interestingly enough, it seems that content -- and not price -- was the deciding factor for consumers, with Blu-ray-only hits such as the Spiderman and Pirates of the Caribbean films apparently outmatching equivalent HD DVD exclusives. While it's still a little too soon to declare Blu-ray the outright winner, this Blockbuster decision only contributes to the momentum that Sony's darling has had of late -- momentum that at this point, might be too difficult for the other guys to counter.

http://www.engadgethd.com/

[ganthc]

This is a significant boost for blu-ray and I think we got a foretaste of this when Shawn told us that BB was doing this in the UK. While online venues like Netflix and even BB will stock hd-dvd, it seems like bd will get front and center for those customers that go into the stores...which is like free advertising in a way.

More importantly is the study they did showing the preference for rentals, with 70% of rentals going bd's way. That is fairly significant from a rental company as large as BB.

[DavidCantu]

Another thing this will do is make J6P think that "Blu Ray" is the way to go. A lot of people still go to Blockbuster to rent movies, and as soon as they get more familiar with Blu-Ray, they will go that route and not even consider HD-DVD.

I think we're beginning to see HD-DVDs early demise

[Ruined]

And Circuit City chose Divx over standard DVD for over a year. One store does not mean doom in the long run.

[videoworx]

Originally Posted by Ruined

And Circuit City chose Divx over standard DVD for over a year. One store does not mean doom in the long run.

Circuit City had a financial interest in Divx. Blockbuster doesn't care whether HD-DVD or Blu-Ray succeeds (well, it didn't until today). BB is going where the demand is - and apparently, with in-store rental customers, it's with Blu-Ray.

This should wreak havoc on sales numbers in the next few months (170 titles x 1700 stores = a bit of a sales increase for BD software).

[ganthc]

HD-DVD needs to solidify a contract with Hollywood Video before bd gets their hands on that as well.

[sambow87]

Well, since they still offer online I think i'm not hurting too bad from this. But who still rents movies from Blockbuster in store? It's such a rip off (i'm not trying to have a positive spin on this, this is what i've always thought).

Unless you get the movie pass, it's so expensive to rent a couple movies. I think it's around $4 for a 2 day rental. Online is the way to go (Blockbuster and Netflix).

Oh well, i'm hoping this won't hurt too bad.

[ganthc]

Originally Posted by sambow87

Well, since they still offer online I think i'm not hurting too bad from this. But who still rents movies from Blockbuster in store? It's such a rip off (i'm not trying to have a positive spin on this, this is what i've always thought).

Unless you get the movie pass, it's so expensive to rent a couple movies. I think it's around $4 for a 2 day rental. Online is the way to go (Blockbuster and Netflix).

Oh well, i'm hoping this won't hurt too bad.

Go walk into a Blockbuster on a Friday or Saturday night. You'll see that plenty of people still go in-store to rent movies. There are deals that Blockbuster offers that helps make renting "cheaper". But, I agree, online is the way to go, but a LOT of people don't rent that way.

[videoworx]

Well, since they still offer online I think i'm not hurting too bad from this. But who still rents movies from Blockbuster in store? It's such a rip off (i'm not trying to have a positive spin on this, this is what i've always thought).

Blockbuster lets you return online rentals in-store, in exchange for free rentals (you can honestly rent 12 movies per month from a local BB store without paying a dime). The cost per month is the same as Netflix, but I end up renting twice as many movies (so, it is far from a rip-off). If they allow me to exchange online DVD rentals for free in-store Blu-Ray rentals, I will buy a Blu Ray player tomorrow.

[ganthc]

Originally Posted by videoworx

I will buy a Blu Ray player tomorrow.

Do it! DOOOOOO IT!

[BADBRAD]

Actually Online renting has turned into the rental choice for many,and is turning out to be the way it is going. It says they will still rent HD DVD online. So what is the problem?

[Ruined]

Originally Posted by videoworx

Circuit City had a financial interest in Divx. Blockbuster doesn't care whether HD-DVD or Blu-Ray succeeds (well, it didn't until today). BB is going where the demand is - and apparently, with in-store rental customers, it's with Blu-Ray.

This should wreak havoc on sales numbers in the next few months (170 titles x 1700 stores = a bit of a sales increase for BD software).

Uh. Blockbuster also tried to buy the entire Divx business from Circuit City. Divx had 10% market share at its peak. Blu-Ray has less than 1%.

Having Blockbuster on your side does not guarantee much except that you'll be able to rent your movies from Blockbuster.

http://www.deadmedia.org/notes/42/426.html

[tomdkat]

Originally Posted by Ruined

Having Blockbuster on your side does not guarantee much except that you'll be able to rent your movies from Blockbuster.

I agree with you that this doesn't "guarantee" anything BUT I think this is a HUGE victory for the Blu-Ray camp. Simply HUGE! If nothing else, this gives the perception (accurate or not) of Blu-Ray being the HD format of choice. What gets me is the almost constant false analysis at work when determining which format is preferred by people. The BB rep cited blockbuster Blu-Ray exclusive titles being "evidence" of people choosing Blu-Ray over HD DVD. If Spiderman and Pirates of the Caribbean had been released on HD DVD, would BB's analysis change and possibly be in favor of HD DVD?

If Batman Begins or the Last Samurai (both of which are available on both HD formats I believe) had been used for their analysis and more people rented Last Samurai on Blu-Ray than on HD DVD, I can better respect BB's decision.

I think BB simply was in a position of needing to make a choice of a HD format to support and they chose Blu-Ray. Congrats to the Blu-Ray camp.

Peace...

[GlacierMonkey]

I work at Blockbuster, and trust me, we still do plenty of business, both regular rentals and Movie Pass/Total Access online (to answer the price question, it's $3.89 for a 3-day or one-week new release rental and $2.48 for a one-week older movie). Plus, if you belong to the Rewards program, you can get a shit-ton of free rentals. We have had a few customers asking if we're moving into the HD front anytime soon, and which format we're choosing. I guess now I have an answer for them.

[tomdkat]

Originally Posted by GlacierMonkey

We have had a few customers asking if we're moving into the HD front anytime soon, and which format we're choosing. I guess now I have an answer for them.

Do some BB's not have HD titles on shelves right now?

Peace...

[Pirate]

Originally Posted by tomdkat

Do some BB's not have HD titles on shelves right now?

Peace...

None of my BB's have them yet.

[ganthc]

Originally Posted by tomdkat

I agree with you that this doesn't "guarantee" anything BUT I think this is a HUGE victory for the Blu-Ray camp. Simply HUGE! If nothing else, this gives the perception (accurate or not) of Blu-Ray being the HD format of choice. What gets me is the almost constant false analysis at work when determining which format is preferred by people. The BB rep cited blockbuster Blu-Ray exclusive titles being "evidence" of people choosing Blu-Ray over HD DVD. If Spiderman and Pirates of the Caribbean had been released on HD DVD, would BB's analysis change and possibly be in favor of HD DVD?

If Batman Begins or the Last Samurai (both of which are available on both HD formats I believe) had been used for their analysis and more people rented Last Samurai on Blu-Ray than on HD DVD, I can better respect BB's decision.

I think BB simply was in a position of needing to make a choice of a HD format to support and they chose Blu-Ray. Congrats to the Blu-Ray camp.

Peace...

I doubt it was based on those titles alone. How long has BB been offering online rentals of both formats? I'm sure they have been gathering data for that long. According to highdefdigest.com, BB has been doing this since late 2006. That is quite a bit of time to get a sampling for how customers are choosing formats. You can try to pin it on POTC movies, but BB is right in that the selection of studios is greater for bd. Since Warner, Paramount, and Magnolia are dual-format, the only movies being missed out are Universal, and a smattering of Weinstein movies. Everything else is in blu...it's not that hard a decision to make.

I think BB made the choice based on their rentals they've had for both formats, and based on the selections. Appears to be a sound business decision on their part, imho.

[Ruined]

The MS response:

Originally Posted by Amir

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/ind...eases&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….

[videoworx]

I believe the Microsoft respsonse from last week trumps anything else they could possibly say at this point...

You know, the bit about them not giving a shit about HD-DVD, and that they wished it would go away so everyone could focus on downloading heavily compressed content.

[ganthc]

The question isn't whether Circuit City carries hd-dvd or not, but whether it favors it like Best Buy favors bd. I know Snippy has said that his store at least leaned heavily towards blu-ray. I know my local CC does as well. It's not enough to just have a placeholder in retail spots. It's about marketing that as well.

While hd-dvd has a presence in 250 stores, bd has 1700. That's very significant, and has much more market penetration, especially if blu-ray ads and stuff are pasted up everywhere. The more market exposure given to blu-ray makes hd-dvd seem that much more forgotten. It's just a simple matter of marketing.

Which is why I think MS, Toshiba, hd-dvd group, etc. should be focusing on nailing down a deal with Hollywood video if at all possible. If the BDA gets that locked up too, it will be a huge blow.

[Ruined]

Originally Posted by videoworx

I believe the Microsoft respsonse from last week trumps anything else they could possibly say at this point...

You know, the bit about them not giving a shit about HD-DVD, and that they wished it would go away so everyone could focus on downloading heavily compressed content.

In context, the MS statement you refer to was not about the current market, but the future market 10 years down the road. That is when downloads will become a more viable method of delivery - the infrastructure has to be there first (i.e. uncapped fios, Docsis 3.0) and right now its not. Lets face it, the time will come but I don't think it will kill off disc-based sales - rather it will likely supplement them.

[tomdkat]

Originally Posted by ganthc

I doubt it was based on those titles alone.

Duh. The point is I believe their analysis is flawed based on the comments of the BB rep above. This is not to say their findings are inaccurate or anything but to come to the conclusion people are "choosing a format" based on exclusive title availability (regardless of the titles) reflects incorrect analysis. The people in question are not choosing formats, they are choosing titles in HD. Pirates of the Caribbean is a HUGE title and if people want to rent the HD version, they ONLY choice they have is the Blu-Ray version. Now, I don't question Blu-Ray titles renting well, especially with blockbuster titles people want to see in HD being available only on Blu-Ray, in some cases.

In order for BB to state people are choosing to rent Blu-Ray titles over HD DVD titles is to use the numbers of titles they actually stock on BOTH HD formats and if the numbers consistently show people are renting the Blu-Ray version of The Last Samurai over the HD DVD version (again BOTH must be in stock and on the shelf), then they are right that their customers favor Blu-Ray. I'm NOT seeing that kind of talk in the blurb from the BB rep above (nor would I expect a long discourse from said BB rep) but more importantly, I'm NOT seeing that kind of talking or writing in a lot of the format comparison discussion. Take a peek at the recent "Blu-Ray stomps on HD DVD" article where Pirate of the Caribbean sales trumped sales of The Matrix. People use that comparison as "evidence" that people are choosing Blu-Ray over HD DVD when the fact is they chose Pirates over Matrix.

How long has BB been offering online rentals of both formats? I'm sure they have been gathering data for that long. According to highdefdigest.com, BB has been doing this since late 2006. That is quite a bit of time to get a sampling for how customers are choosing formats.

Yep, that's some time (late 2006 could mean December 2006 or earlier than that in 2006) but unless they are looking solely at the SAME title being offered on BOTH formats, you can't come to any conclusions about "format choice". If you try to, you're comparing apples to oranges, right?

You can try to pin it on POTC movies

I don't pin their decision on a single movie and I don't question their decision to support Blu-Ray over HD DVD. When it gets right down to it, if Blu-Ray rentals are generating more revenue than HD DVD rentals, by all means back Blu-Ray. However, Blu-Ray rentals generating more revenue than HD DVD rentals does not necessarily mean people are "choosing" one format over another. I mean I could say HD DVD rentals of King Kong have completely obliterated Blu-Ray rentals of King Kong and so those who rent King Kong are "obviously" choosing HD DVD over Blu-Ray, right?

Peace...

[supercutz]

Originally Posted by Ruined

Uh. Blockbuster also tried to buy the entire Divx business from Circuit City. Divx had 10% market share at its peak. Blu-Ray has less than 1%.

Having Blockbuster on your side does not guarantee much except that you'll be able to rent your movies from Blockbuster.

http://www.deadmedia.org/notes/42/426.html

Uh. What does Divx's 10% peak have anything to do with BD now? Are you insinuating that BD is at it's peak right now? If not then your point is moot.

I don't think anyone is saying it's time to throw in the towel on your precious HD-DVD format.

Whenever there's anything positive to be said about BD, you can depend on the spin doctor, Ruined to chime in with some irrelevant info in defense of HD-DVD.

Oh, and for the record, I'm remaining on the fence until there's a clearcut winner so, no, I'm not a BD fanboy by any means.

[videoworx]

Tom, I don't think BB is saying "we went with Blu-Ray, because people like PotC."
They stocked a bunch of a Blu-Ray titles in 250 stores. They stocked a bunch of HD-DVD titles in 250 stores. Apparently, more than 2/3rds of all the HD rentals were Blu-Ray (so, it wasn't one specific title that did it).

BB went with Blu-Ray, because BB customers preferred the variety of movies BD offers. It doesn't mean Universal makes shitty movies. It means BB customers didn't like what they had to offer, and picked a Blu-Ray movie over a HD-DVD movie most of the time. This is what happens when only one major studio supports a format.

[tomdkat]

Originally Posted by ganthc

The question isn't whether Circuit City carries hd-dvd or not, but whether it favors it like Best Buy favors bd.

I think the question really IS if CC carries HD DVD or not. Why? Because, since "the writing [has been] on the wall" for some time now it really makes a bold statement when a company decides to support HD DVD, at this stage in the game. We're a full year into this war now and we've got an assortment of hardware AND software out "in the wild". Studios on the Blu-Ray side are releasing content and given the number of studios on the Blu-Ray side, Blu-Ray will have more content released. With all that in mind, for CC to decide to carry HD DVD says a lot (even if they continue to support Blu-Ray, if they do today).

While hd-dvd has a presence in 250 stores, bd has 1700. That's very significant, and has much more market penetration, especially if blu-ray ads and stuff are pasted up everywhere. The more market exposure given to blu-ray makes hd-dvd seem that much more forgotten. It's just a simple matter of marketing.

Yep, I agree but the fact of the matter is HD DVD hasn't been totally forgotten because someone who wants to rent a HD DVD exclusive title will be reminded of HD DVD's existence.

I think Amir made some good points and given all the cards stacking in Blu-Ray's favor, why hasn't the "killer blow" been struck yet? How can HD DVD continue to survive and even thrive? One major Hollywood studio vs Four others? Universal must have some big hairy.... nevermind.

Peace...