HD DVD selling well: Wait, What!?

Not dead yet, apparently.

CE Pro: Report Says HD DVD Still Doing Well

The Financial Times is reporting that HD DVD is still doing well in the United States, according to Pocket-lint. (via Engadget HD)The report says "aggressive" price cuts have made HD DVD an attractive option for some, adding that HD DVD players are going for $60 and movies for $10.Ryan Kugler, president of Distribution Video & Audio, says the company has already sold one million HD DVDs that were returned to the studios by big retailers."Cheap entertainment always does well in a recession or depression," Kugler says.

To be fair, $60 for a really good upsampling DVD player is a pretty good deal.

Additionally, if you happen to own a media server, like MediaMax that can rip not only DVD and Blu-ray but also HD-DVD, why wouldn't you snarf up a $10 HD-DVD from the clearance bin to load into your server, as opposed to $30 for a Blu-ray title?

As I like to say, every product has a customer, the trick is to put them together at the right price.

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Last Month In Marketing Magazine: I Came Here To Bury Blu-ray, Not To Praise It

Print media has a much longer time factor behind it's publication than online media, which is why so many news outlets depend more on their online editions than their print ones.

My point, and I did have one, is that way back in February of this year Marketing Magazine asked me to do a piece about Blu-ray's victory over HD-DVD and the ramifications of digital delivery. The piece appeared in the March 10 2008 print editon of Marketing Magazine, which was themed as their Digital Content issue.


With their site upgrade they haven't yet updated their archive of back issues online, so editor Rob Gerlsbeck gave me permission to reprint the article right here on Lee Distad's Professional Opinion.

Read this doc on Scribd: Blu-Ray1

Big thanks to my friends at Marketing Magazine for asking me to contribute, not to mention the hilarious graphic that accompanied my text!

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Rumor: Circuit City Feels Bad About HD-DVD, Plans To Make Amends

I haven't seen an official announcement, but it's been leaked on both Electronic House and CrunchGear that US retailer Circuit City is willing to give consumers who bought an HD-DVD player from them within 90 days of Toshiba's official throwing-in-the-towel speech a full exchange towards the purchase of a Blu-ray player.

I for one find it hard to believe, since it's a smart, sound business move full of positive PR, and that hasn't been Circuit City's style for years. We shall see, I guess.

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Toshiba Throws In The Towel On HD-DVD

Old news now, I know, but I was busy yesterday.

Yahoo!: Toshiba to give up on HD DVD, end format war: source

A source at Toshiba confirmed an earlier report by public broadcaster NHK that it was getting ready to pull the plug.
"We have entered the final stage of planning to make our exit from the next generation DVD business," said the source, who asked not to be identified. He added that an official announcement could come as early as next week

"Entering the final stages" sounds ominously like sitting in your bunker, dust in the air kicked loose from the ceiling by the bombing going on over head, staring moreosely at the little pill in the palm of your hand, but perhaps I'm being over-dramatic.

One expression that seems apt in this case is that it really is all over but for the crying: if anything, the arguments on various HiFi online forums have ratcheted up in amplitude as hardcore fans of the HD-DVD format simultaneously go through the Denial and Anger stages at the same time, telling all who will listen how unfair it all is.

Not everybody is as empassioned though. If you filter out the early adopters and the tech-geek propeller heads, the prevailing sentiment in the marketplace over the course of the format was was apathy. The Stalwart's Joe Wiesenthal displays little sentiment in his HD-DVD player's truncated future:

Truth is, I just can't get too worked up over it. In the 9 months or so, since we've had the device, we've probably watched like 10 titles in HD. Part of this had to do with availability and part of it had to do with indifference.

He's not alone by a long shot. Until the CE industry just plain takes DVD away from people, it will remain "good enough" in the minds of many consumers. Not to say that the day when that happens isn't coming...

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Breaking News: Even Toshiba May Abandon HD-DVD

This just in from CE Pro:

CE Pro: Toshiba Hints at Dropping HD DVD, Report Says

Toshiba is planning to abandon HD DVD in the next few weeks, according to a story in the Hollywood Reporter, which cites “reliable industry sources.”
The Hollywood Reporter quotes Toshiba’s Jodi Sally as saying that recent developments are shifting the company’s outlook.
“Given the market developments in the past month,” she is reported as saying, “Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players.”

Jason Unger then goes on to say:

We’ve been trying to get in touch with contacts with Toshiba for a couple days now and haven’t had any success, so please consider this a rumor until any official word comes through.

Well, it may just be a rumor, but it's a juicy one!

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Netflix Dumps HD-DVD

No matter what I write about the format war, I get hate mail from people accusing me of being a paid anti-Blu-ray shill, and people accusing me of being a paid anti-HD-DVD shill. So make of the next item what you will:

CE Pro: Netflix to Drop HD DVD Discs, Will Only Rent Blu-ray

Netflix will stop stocking HD DVD discs by the end of the year, exclusively renting out Blu-ray movies, the company announced today. The move is a major decision for the leading online movie rental service, which until now had been promoting both formats. Netflix says that its decision is based on the fact that four of the six biggest movie studios publish on Blu-ray, arguing that the industry has picked a winner.

I for one can't wait to see how Toshiba spins this.

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Notes from the Format War

Random Rumoroids (not quite Factoids, if you get my meaning), none of which quite qualifies for their own post.

*it appears that Yamaha's Blu-ray player has been pushed back to Fall, instead of the Spring launch they originally intended. My source wouldn't confirm the underlying reasons, but at this point I suspect that it's perfectionism rather than hedging their bets to see which format will win out.

*a source for another brand, which shall remain nameless, commented to me last week that he was "pleasantly surprised" by sales of their HD-DVD players. However, the aforementioned brand already has a Blu-ray player developed and in reserve, just in case.

*more easily confirmed than the first two items, but Best Buy.ca is flogging select Blu-ray disc titles at CA$19.99 this week. So if you think that Underworld's undergood plot and characterizations could be trumped by Hi-Def visuals, have at it.

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HD-DVD Floundering In Australia

Since last week I was accused of having an "unspoken and insidious anti-Blu-ray bias" (which I'm still snickering over), this seemed like a good time to take HD-DVD out behind the woodshed again.

Sydney Morning Herald: HD DVD prices slashed to revive flagging sales

With one foot in the grave, the HD DVD camp is slashing player prices in a last-ditch effort to revive the ailing format. HD DVD has been eclipsed by its competitor Blu-ray in movie and player sales since the formats launched in Australia.
...
According to market watcher GfK, which tracks Blu-ray and HD DVD sales across all major Australian retailers, Blu-ray accounted for 81 per cent of all high definition player sales in December last year. This was consistent with sales results throughout the year.
But that figure doesn't include Playstation 3, which has a built in Blu-ray player and, according to GfK analyst Sharane Lewis, accounts for 95 per cent of all high-definition players sold to date.
...
Last year, 83 per cent of high-definition movies sold were in the Blu-ray format, with HD DVD making up the remaining 17 per cent. In January Blu-ray's lead dropped slightly to 80 per cent.

Needless to say, I find the Toshiba ad dab smack in the middle of the article to be deliciously ironic.

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Circuit City Denies Siding With Blu-ray

I was hoping that today would be a Circuit City-free news day. For the last week this blog has felt like one big Circuit City, HD-DVD vs. Blu-ray lovefest, and I was hoping to give it a rest and talk about something else for a while.

However, Circuit City has vehemently denied the rumor I was irresponsibly circulating earlier this week that they were unloading their HD-DVD hardware preparatory to throwing their weight behind Blu-ray, so I need to report on it.

PunchJump: Circuit City to back HD DVD; clearance 'inadvertent'

Circuit City stores will continue to sell HD DVD products at retail amid a recent clearance of stand-alone players at select locations.
A representative told Punch Jump Wed. that Circuit City will continue sale of Toshiba Corp.'s HD-A3 HD DVD player at $149 and the HD-A30 at $199.
The clearance of third-generation HD DVD players was said to be inadvertent.

I don't know what's worse, that they're publically stil giving HD-DVD legs, or that their store level operations are out of control.

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Singlehandedly subverting the Format War since 2006

I totally LOL'ed at the first comment posted on this week's CE Pro column "Are Blu-ray, HD DVD Incentives Changing the Format War?" :

Posted by Michael on 01/31
at 10:31 AM
I have been advising and selling my clients DVD Players that upconvert to 1080; because if you persuade them to choose either format which happens to be the format that looses the war the first question you receive is why did you sale me that player?...I followed your advise your the expert.

Does this mean that when either Toshiba or Sony (or both, but right now probably just Toshiba) hold a downbeat press conference, they're going to publically blame me for their problems?

I can only hope.

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This Week In CE Pro: Blu-ray vs. HD-DVD, So What?

CE Pro:Are Blu-ray, HD DVD Incentives Changing the Format War?

For the record, my working title for this week's column had been Format War Getting Weird, but it was judged to be too snarky to lead with.

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Blu-ray vs HD-DVD still full of mixed tidings

It's still hard to draw a clear picture. Although, honestly, things aren't really looking so hot for either format.

On the one hand, Circuit City has just started clearing out all HD-DVD hardware and software. Rumours persist that it's not just inventory reduction prior to new hardware, but a commitment to go 100% with Blu-ray. If the latter, that might be the first indications that the struggling retailer is beginning to get its act together.

Yet on the other hand, there's evidence that the fantastic sales increase in Blu-ray players that was trumpeted last were salted with the free Blu-ray players offered as package deals with televisions by Sony, Panasonic, and Sharp. A free player is nice if you were going to buy a TV anyway, but it's not necessarily the driving decision maker, is it?

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Simpsons The Movie on DVD, and Wal-mart's commitment to Hi Def

So yesterday, I had a reason to be at Wal-mart, and picked up the DVD release of The Simpsons: The Movie. Since it's impossible for me to be in a retail store without analysing it, here's what I noticed about their software department.

The Simpson's: The Movie was $24.88 for the DVD, but there was a gift set for $27.88 that included little plastic figurines of the Simpson family. I might have bought that instead, since I'm kind of a sucker that way. Except: the gift set was only available in 4:3 full screen, not widescreen? Seriously, who still has a 4:3 television?

Wal-mart seems fully committed to pushing both Blu-ray and HD-DVD. The display cubes in the center of the main aisle were almost entirely stocked with new release Blu-ray and HD-DVD titles, and all the end caps facing out were 100% HD format discs. Your average Wal-mart employee might not be able to explain the benefits, but as a company they are fully committed to putting both formats in front of shoppers and watching what happens.

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Saumsung's big Blu-ray bundle

While much of the attention has been focused on using game consoles to build the installed base for either Blu-ray or HD-DVD, and while everyone acknowledges that the mass-market is what will win the format war (as opposed to high end, chi chi HiFi buyers), Samsung is the first CE brand to bundle Blu-ray playback into an inexpensive Home Theatre in a Box package.

The Retail Bridge: Samsung Intros Home-Theater-in-a-Box With Blu-ray Player

For many in the CE industry, the term Home-Theater-in-a-Box (HTiB) is synonymous with low-end equipment and mass-market, price-before-performance technologies.
...
The HT-BD2 is set to debut at CES and will ship in early 2008 at an MSRP of $1,499.

This is a significant move in the format war, and in my opinion, it won't be Playstation 3's or XBOX360's that win the war(nor even $99 players). It will be how many commoditized price point HTiB boxes that the format and it's champions can get into people's homes.

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Endgame for Blu-ray vs. HD-DVD?

With only 14 more sleeps until Christmas, the HD format war looks to be entering a new, final, and in my opinion, kind-of-desperate phase.

This week's A&B Sound flyer is chock full of HD offers. For example:

*FREE Sharp BDHP20U Blu-ray player with purchase of LC37D62U 37-inch LCD TV, only $1699!

*FREE Toshiba HD-A3 HD-DVD player with the purchase of 32HL57 32-inch LCD TV, only $1199 and NO GST!

*FREE Sony BDP-S500 Blu-ray player with the purchase of KDL40V3000 40-inch LCD TV, only $2299, and NO GST!

Prices so low they're crazy!

In all seriousness, from a retail perspective, these are astonishingly aggressive offers. In fact, were I in the market for a secondary television for a spare room, any one of those deals would make me seriously consider getting off the fence and taking a side, whether for Blu-ray or HD-DVD. For someone as hard bitten and cynical a retail hawk as me to say that speaks volumes for the appeal offers like this provide to the mass consumer.

Is the format war over? Hell no, it's just getting interesting. Who can prostitute give away enough players to reach critical mass for their installed base? Only time will tell.

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This Week In CE Pro: Great Training Sessions

CE Pro: What Training Sessions Have Been Valuable to You?

A blatant attempt to generate more positive input from CE Pro's readers, and to draw away from the endless flamefests that accompany any article with a perceived slant for or against either Blu-ray or HD-DVD.

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This Week in CE Pro: Custom Integration and the Format War

CE Pro: How the Format War Affects Custom Shops

Is anybody other than me tired of the endless go-around between Blu-ray and HD-DVD?

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Wal-mart and Toshiba go bananas with cut-price HD-DVD player

Following up on the story of Wal-mart and Best Buy teaming up with Toshiba to offer a $99 HD-DVD player for sale in an effort to strike a blow in the format war, reports are coming in that 90,000 units went out the door.

Videobusiness: HD DVD set-top player $99 sales moves units

The HD DVD format significantly pumped its installed base over the weekend, as dueling store clearances sold an estimated 90,000 Toshiba players, according to sources close to retailers.
...
That tally covers Friday to Sunday sales of Toshiba’s second-generation HD-A2 model, which Wal-Mart and Best Buy sold for about $99 on Nov. 2. That’s $200 less than Toshiba’s $299 list price and $100 off widespread retail pricing of $199.
The $99 players made up most of the 90,000 units sold, a source said.
Within three days, Toshiba corralled nearly as many sales as the best-selling stand-alone Blu-ray Disc player has sold since its launch. Sony’s dominant Blu-ray set-top, the $499 BDP-S300, has shipped about 100,000 since it bowed this summer.

It was a dirty Hail Mary ploy that reeked of desperation, but it appears to have been a winner.

Will this tip the format war's teeter-totter in HD-DVD's favor for good? Maybe.

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A $99 HD-DVD player!? Wal-mart totally goes there

TWICE: Wal-Mart Promos HD DVD Player At $99

Wal-Mart will offer Toshiba’s HD-A2 HD-DVD player tomorrow for $98.97 as part of a “pre-Black Friday” promotion.
The price point represents a dramatic new low for Toshiba’s entry-level model, which was recently reduced to hit a suggested $250 retail and is currently being sold by Amazon.com, Circuit City and Costco for just under $200.
The HD-A2 is a closeout model that is being replaced by the more fully featured HD-A3.
Wal-Mart is also selling three HD-DVD titles for $14.96 as part of its one-day promotion.

There are some cardinal takeaways here to understand the method to Wal-mart's madness:

*In conjunction with other loony prices like a $998 50-inch Sanyo plasma, Wal-mart is effectively buying up the lowest echelons of the shopping public. Unlike Best Buy, Wal-mart has plently of high margin apparel, candy and other goods with which to make the add-on sales, so they really can make it up on volume.

*Toshiba is taking the low road to winning consumer acceptance for HD-DVD, since Blu-ray players all still start at $499 and up. But...

*This promotion tells me that Toshiba was still sitting on tons of closeout HD-A2, and were getting nervous as the rollout for new models prior to Christmas approaches. I'm sure that Toshiba was all too happy to whore out last year's stock to Wal-mart, much to the dismay of other national accounts who are still sitting on inventory.

Let the Christmas Bloodbath begin!

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Rogers Video Supports both Blu-ray and HD-DVD

What do you do when you're a video rental company, and you have two new disc formats competing for shelf space? Stock both of them.

Marketnews: Rogers Videos Adds More Blu-ray & HD DVD Rentals

In response to “increasing demand”, Rogers Video says it will add more Blu-ray and HD DVD rentals of top releases in 250 of its stores across Canada.
"We are witnessing increasing customer demand for high-definition movie titles," explained Michael Jacobson, Vice President, Merchandise and Distribution for Rogers Retail. "Our goal is to ensure that we are supplying our customers with choice and availability in whatever format they are after."

I can totally understand why Rogers would not want to choose a side. If you're in business to supply something to people, you need to give them what they want. That's a total no brainer.

What will be interesting to see six or ten months down the road, is how they end up weighting their mix of titles in both formats once they have some sales metrics to interpret. Which format will be more popular with renters?

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