HD DVD Getting Case of the Blues

Jun 19, 05:18 AM

Current Headlines: By Gary Gentile

LOS ANGELES -- Blockbuster Inc. will rent high-definition DVDs in only the Blu-ray format in 1,450 stores when it expands its offerings next month.

The move, being announced today, which deals a major blow to the rival HD DVD format, 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," said Matthew Smith, Blockbuster's senior vice president of merchandising. "I can't ignore what I'm seeing."

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. "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," he 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 its 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.

"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.

Studios hope high-definition discs, with their sharper picture and higher capacity for interactive special features and games, will replace standard definition DVDs. Blu-Ray and HD DVD have been battling it out since they both hit the market last year. The two formats are incompatible, and neither will play on standard DVD players, although standard DVDs can be viewed with players of either high-definition 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.

Text of fax box follows:

Studios back film format

All major film studios but one are now releasing films in Blu- ray.

Warner Bros. and Paramount Pictures release films in both formats.

Walt Disney Co. releases exclusively in Blu-ray.

Universal Studios supports HD DVD exclusively.

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