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Death Knell Sounds for HD DVD Format
Death Knell Sounds for HD DVD Format

By Barry Levine
June 18, 2007 8:50AM

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The news of Blockbuster going with the Blu-ray format in 1,700 stores is "pretty significant," said Forrester analyst James McQuivey, who noted that, by itself, the Blockbuster development might not be fatal to the HD DVD format. "But it is part of a series of blows that will eventually give Blu-ray the triumph," he predicted.
 



The war between the two high-definition DVD formats entered a new phase on Monday, as Blockbuster announced that it will offer the Blu-ray format for rental in its 1,700 stores. The HD DVD format still will be offered through the company's online channel, blockbuster.com, as well as through the 250 stores that currently carry both formats.

Matthew Smith, Blockbuster's senior vice president of merchandising, said that the company's Blu-ray inventory is being expanded "to meet the demands of our customers and based on the trends we're seeing."

He added that it is "still too early to say which high-definition format will become the industry standard," and that the video store giant will adjust its inventory mix to track demand.

Time for HD DVD To Recover?

This news is "pretty significant," said Forrester analyst James McQuivey. By itself, this development might not be fatal to the HD DVD format, he said. "But it is part of a series of blows that will eventually give Blu-ray the triumph."

McQuivey predicted Blu-ray will be the winner because it offers better technology and more movies. Its advantage in technology stems from the fact that it offers more storage, he said, and the edge in movies is because the format has more Hollywood studios behind it.

Paul Jackson, a Forrester analyst based in Europe, said that it's still early in the game and that HD DVD has time to recover. He noted that the Blockbuster deal is good news for Sony and the studios supporting Blu-ray, and pointed out that it "mirrors the reported lead Blu-ray is building up over HD DVD sales."

Jackson also noted that the total user base for next-generation DVD in either format is still "tiny" compared to DVD or VHS.

The HD DVD camp, he said, still has "the 'better interactivity' card to play along with more support from the PC world," including Microsoft, Intel, and Toshiba. And, he added, recordable versions of the formats have not yet penetrated the consumer mainstream. When recorders become popular, he said, they might "significantly swing the balance."

HD DVD, Blu-ray Balanced in 2006

The two formats were more or less balanced at Blockbuster when the chain began carrying high-definition titles in 2006. All titles in both formats had been carried in the online store, as well as in the initial 250 stores where the discs were available.

When the expansion to 1,700 stores begins in July, the video store chain will carry more than 170 Blu-ray titles, adding new ones as they are released. Titles in Blu-ray are available from Sony Pictures, Metro-Goldwyn-Mayer, FOX Home Entertainment, Buena Vista, Lionsgate. Warner Home Video, and Paramount.

The HD DVD format has been backed by NBC Universal. Warner Home Video and Paramount are backing both.
 

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