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2005 In Review Part 9: SEPTEMBER 2005

1 Jan, 2006 By: Thomas K. Arnold

The dire financial future of Blockbuster became the talk of Hollywood in September. The nation's top rental chain scored an equity offering in November to stave off bankruptcy.

Sony Pictures Home Entertainment president Benjamin Feingold lashes out at HD DVD, saying Blu-ray Disc will “overwhelm” its rival. Citing mounting support for Blu-ray Disc and the format's inclusion in next spring's PlayStation 3, Feingold says a victory, with unanimous studio support, is “the only logical conclusion.”

Speculation about Blockbuster's financial condition is the talk of Hollywood after the world's No. 1 video rental chain announces it will not pay a quarterly dividend for the first time since going public six years ago. Several studio executives, speaking anonymously, say they only are shipping product to Blockbuster if the chain pays in advance.

As video specialty stores plod on in the face of declining rentals and a slowdown in DVD sales growth, they suffer a third strike: soaring gas prices fueled, in part, by Hurricanes Katrina and Rita. A Home Media Retailing poll found nearly half of retailers surveyed saying their customers are coming into their stores less frequently because of high gas prices.

Desperate for some good news, HD DVD finally gets some: Computer giants Microsoft and Intel throw their support behind the format, saying they believe it will come to market sooner and will provide an easier, more affordable transition from current DVD than Blu-ray Disc.

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