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Retailers: No Quick End to Format War

18 Jan, 2007 By: Erik G., Jessica W.

Despite heady comments made by Blu-ray Disc backers at the recent Consumer Electronics Show, it's far from “game over” for high-definition discs, at least not on the retail front lines or in the hearts of consumers.

“I think it's more likened to ‘game suspended because someone didn't read all the rules and get everybody playing,’ said David Workman, executive director of PRO Buying Group, which represents independent consumer electronics retailers. “All throughout this, there's been a lack of sensitivity to what the consumer is really needing or wanting.”

It's going to be a long time before there's a clear-cut format “winner” or before there is significant market penetration of devices, retailers say.

“Interest is still muted because of the format war,” said Best Buy's Brian Lucas. “We are still offering both formats, and we feel it's important that people understand that there is a format war. We don't want to mislead customers into getting a technology that may not survive.”

High-def discs are still very much in the early adopter stage, agreed Circuit City spokesperson Jim Babb. “We think mass adoption of the next generation of DVD awaits the availability of more players and more content and more clarity on the question of formats and compatibility,” he said.

Tweeter Home Entertainment is continuing to support both formats “because at this point, I don't see a clear-cut winner,” said Frank Roshinski, VP and general merchandising manager for video.

He said Tweeter focuses on carrying newer releases and has focused on selling the top theatrical titles available on Blu-ray and HD DVD.

“When we sell an HD DVD or Blu-ray player, we want to offer them some software so they can go home and watch something,” he said. “That limits the amount of returns we take back.”

He said Tweeter loaded up on Mission: Impossible III in both formats and will continue that purchasing strategy going forward.

He said the ongoing format war hasn't necessarily chilled sales. Instead, it requires a dedicated, more-educated sales force that can answer a bevy of new questions about what the differences are and why.

Roshinski said that, at this juncture, early adopters tend to be brand-loyal, which means they stick to their TV brand when considering HDTV.

“If I have a Sony TV, I want a Sony Blu-ray player,” he said. “In tech purchases, it is important. If it is a Pioneer Elite customer, they want Pioneer Elite Blu-ray player. When it goes to a commodity stage, that brand loyalty dissolves considerably.”

Workman said it could be dangerous that so much of the early adoption of high-def hardware is tied up in gaming devices, particularly the PS3 and its Blu-ray component. Gaming formats have always been and will probably remain multi-format competitors, he said.

That gamer demographic is just not going to cut it if backers from both camps want to see mass adoption of the new formats, Workman said.

HDTV sets, and the HD player hardware that connects to them, are not “grab-it-and-go” shopping items, he said.

“Education is not keeping up with the price drops and the widening of the marketplace,” he said.

Workman doesn't share HD DVD pundits' excitement over cheap Chinese manufacturers entering that format's playing field.

“It's the wrong message to send,” he said. “Bringing in a bunch of Chinese vendors to me negates completely any kind of orderly transition in price from the tier-one brands.”

The LG dual-format player announced at CES could build a bit of a bridge, but it's still far out of mass market pricing at $1,200, and how well it goes over depends a lot on how well it functions, Workman said.

However, if that LG player is up to spec, it could be a great option for consumers who are still waiting on the sidelines to see how the format war goes, said Ron Epstein, owner of TheHomeTheaterForum.com, a site populated by early technology adopters and high-def enthusiasts.

“I'm very ecstatic about what the release of a combo player brings to the table,” he said. “Hopefully, it's a step forward. Of course, it doesn't bring us any closer to having one format dominate the market.”

Workman thinks a lot of the pressure now falls on the studios, with products such as Warner Home Video's Total HD — discs that bundle HD DVD and Blu-ray versions of a film together — making up some ground.

“That is probably in some ways the easiest answer, the best answer,” he said.

It's definitely time for some perspective, he said.

“[High-def] is definitely a technology that has to come to market,” Workman said. “It's an evolutionary technology, but it's got a lot of work to go. I think the camps need to step back and look through the eyes of the consumer and make decisions that are designed to bring in the consumer rather than worrying about their own little place in the sun.”

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