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Blockbuster to expand its Blu-ray DVD offerings

June 19, 2007|Dawn C. Chmielewski | Times Staff Writer

Video rental giant Blockbuster Inc. said Monday that it would expand the availability of Blu-ray DVDs to more stores, saying the high-definition discs had proved more popular than the rival HD DVD format.

Advocates of the Blu-ray format hailed the decision by the nation's largest video rental chain as evidence of its gathering momentum. Others, however, cautioned that it was too soon to declare a winner in the war to decide the winning format for next-generation DVDs.

Matthew Smith, Blockbuster's senior vice president of merchandising, said he reached the decision after an initial test of both formats in 250 stores since November. He found that 70% of the high-definition DVD rentals had been for Blu-ray discs, especially since the introduction of Sony's PlayStation 3, a game console that also plays movies in the Blu-ray format.

"It was that clear," Smith said. "I can justify the shelf space for Blu-ray. It's difficult to justify the shelf space for HD DVD based on the rents coming from the 250 stores."

Blockbuster plans to roll out Blu-ray discs to an additional 1,450 stores by July 10. HD DVD movies will be only in the original 250 stores and online.

Blu-ray has an early statistical advantage. Consumers have 1.5 million Blu-ray players (including PS3 game systems), compared with 300,000 HD DVD players, according to DEG: the Digital Entertainment Group, a Los Angeles-based industry consortium. Blu-ray discs have outsold HD DVD by a ratio of almost 2 to 1.

David Bishop, president of Sony Pictures Home Entertainment, which backs Blu-ray, said he hoped the Blockbuster announcement would speed the end of the format war. And he predicted that other major retailers would follow suit as they reacted to Blu-ray's stronger sales.

"I really think this is a tipping point," Bishop said. "This is the first of a series of announcements and changes in the marketplace that you'll see going forward."

Others downplayed the effect of the Blockbuster move, saying that the Dallas company didn't carry the same clout in the video industry as it used to. Also, Blockbuster hedged its support for Blu-ray by saying it would reverse course if consumers started asking for more HD DVD movies.

"This is a war of attrition," said Van Baker, vice president and research director at Gartner Inc. "It's going to take a while."

Universal Studios, the only major studio to exclusively back HD DVD, is hanging tough in its support of the format.

Ken Graffeo, an executive vice president at Universal Studios Home Entertainment, said factors such as drops in the price of DVD players could influence which next-generation format consumers ultimately embraced much more than the number of titles available for rent at Blockbuster.

"Rental is so insignificant, it is really a nonevent when it comes to the high-definition format," Graffeo said.

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