Blockbuster Sees Blu18 Jun, 2007 By: Erik Gruenwedel
In a move that could tip the scale in the format war, Blockbuster Inc. June 18 said it would begin offering only Blu-ray Disc titles among its high-definition rental selections at 1,700 company-owned stores.
The Dallas-based No. 1 video rental chain, which operates more than 4,200 company-owned locations among 8,300 stores worldwide, said it would continue to offer rival HD DVD (and Blu-ray) at a select 250 stores that have carried both formats since their launches last November.
Blockbuster offers rentals in both formats online.
The rollout of more than 170 rental titles in Blu-ray by mid-July comes as a result of new consumer rental trends that apparently have moved away from HD DVD, according to Matthew Smith, SVP, merchandising manager for Blockbuster.
Through June 10, Blu-ray held a 66% market share compared to HD DVD (34%), according to Nielsen VideoScan. The format held a 67% market share since the beginning of the year and 59% share since launches of both formats.
All major studios with the exception of Universal Studios Home Entertainment (HD DVD only) release titles primarily in Blu-ray and some HD DVD.
Smith said that regardless of format, the increased demand for Blu-ray augured well for consumer adoption of HD packaged media.
“Obviously, when customers are ready, we can expand the Blu-ray offerings into more stores and add HD DVD to more locations if that's what customers tell us they want,” Smith said. “We'll continue to work with the movie studios to ensure we have the right assortment of products.”
David Bishop, president of Sony Pictures Home Entertainment, said Blockbuster's decision reflected consumer rental preferences that would be shortly replicated at sellthrough.
“It sends a strong message to consumers,” said Bishop. “It really starts to clarify the [format] issue to the consumer.”
He said Blu-ray is experiencing a 70% advantage over HD DVD at retail — a percentage he believes is exponentially higher at rental due the proliferation video game rentals for PlayStation 3.
The new Sony game console features a Blu-ray Disc drive.
“There's a spillover effect when people go into rental stores,” Bishop said.
Ken Graffeo, co-president of the HD DVD Group, said Blockbuster's intention was not to declare a winner in the format war. He said it should be noted that Blockbuster is keeping HD DVD available online, which is where the rental giant expects the majority of its growth.
“The rental aspect of HD DVD or Blu-ray is so small right now, it is way too early to see any kind of volume out of it,” said Graffeo.