Blockbuster Picks Blu-Ray Over HD DVD

Blockbuster is saying not to call its decision to carry only Blu-ray DVD over rival format HD DVD an endorsement, but it’s hard to see it as anything else. The nation’s largest video rental chain said yesterday it would begin carrying Blu-ray DVD titles at 1,700 corporate-owned Blockbuster stores by next month.

Blockbuster has more than 7,000 outlets nationwide, so 1,700 stores is hardly a complete rollout. But it follows a ramp up pattern similar to when the chain introduced DVDs to its stores a decade ago in a very slow trickle. It took years from the initial introduction of DVD before it was available in every Blockbuster outlet.

Blockbuster had initially offers both Blu-ray and HD DVD discs in 250 stores but found that more customers preferred Blu-ray, especially after the PlayStation 3, which can play Blu-ray movies, hit the market last November.

Blockbuster will continue to make HD DVDs available for rent (as well as Blu-ray DVDs) via its online rental service, which competes with NetFlix.

“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 in a statement.

HD DVD, officially endorsed as the next generation optical disc by the DVD Forum (developer of the original DVD specification), is the creation of Toshiba, NEC and Warner Bros., with more than a little help from Microsoft . Blu-ray is the creation of Sony Electronics and more than a dozen other consumer electronics vendors.

Both formats offer six times the resolution as standard DVD, with picture quality equal to that of high definition TV. HD DVD hit the market in April 2006 while Blu-ray followed in June of that year. There has been considerable opposition to the dueling formats, which has resulted in most consumers staying away until there is a single format.

Up to now, however, no retailer has picked a side. After considerable grumbling, Best Buy, the largest consumer electronics retailer, chose to carry both formats, as have CompUSA and Circuit City.

Blockbuster’s choice of Blu-ray would seem to signal a single format is about to become a reality. “They are clearly helping one camp and hurting the other. It’s a significant disappointment for HD DVD in the U.S. market, but nothing they cannot come back from,” said Wolfgang Schlichting, research director for optical media with IDC.

The HD camp needs to offer a significantly lower price for its hardware than Blu-ray players and build installed base to build demand for titles, he said. “That’s the only way the HD camp can persuade more studios and rental outlets to support HD.”

Currently, only Universal Pictures offers movies exclusive to the HD DVD format. Warner Bros. and Paramount Pictures offer both Blu-ray and HD DVD while 20th Century Fox, Sony Pictures (and its MGM subsidiary) and Walt Disney Pictures are exclusive to Blu-ray, giving considerable advantage to Blu-ray in terms of studio support.

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