2006 Year in Review: JANUARY
1 Jan, 2007
By: Thomas K. Arnold
The year begins with a gala high-def disc studio dog-and-pony show at the annual Consumer Electronics Show in Las Vegas — for the second consecutive year. With both rival camps, HD DVD and Blu-ray, vowing to launch this year (and insisting, in not so many words, that this time they really mean it), the heart of the presentations are title announcements. Rollouts are slated to begin as early as March. The upshot: a regular flow of day-and-date releases, along with a strong catalog showing, could make high-def disc catch on even faster than DVD. Or not. Giant audio-video retailer Musicland Corp. files for Chapter 11 bankruptcy protection, the latest victim of the faltering music business and the growing impact of digital downloading on packaged-media sales. In its filing, the chain lists assets of $371.5 million and liabilities of $485.6 million. Within days of the filing, Musicland wins court approval to liquidate 341 of its 800 stores, most of them in malls, by April 1. The move comes a month after Musicland announced plans to shutter 61 Media Play locations, its stores with the biggest retail footprints. Boosting studio claims that America needs high-def discs, a study from the Consumer Electronics Association predicts that 2006 will be the first year sales of high-definition digital televisions will outpace sales of analog sets. The CEA predicts HDTVs will reach 15.9 million households by the end of the year. In another blow to beleaguered independent video rental stores, Netflix CEO Reed Hastings said the online subscription rental service will spend as much as it can afford to add subscribers in a drive to put physical video stores out of business. During a call with investors, Hastings said the “prize” Netflix is after “is making video stores uneconomic, triggering the tipping point, or mass closures, of video stores.”
The CEA predicted 2006 would be the year HDTVs outsell analog sets.