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Are Blu-ray, HD DVD Incentives Changing the Format War?

Software and hardware promotions are happening on both sides of the battle.
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Retailers and manufacturers are throwing all kinds of incentives around to woo consumers over to either Blu-ray or HD-DVD, but what does it all mean?

Both the software and hardware sides have seen heavy promotion.

Here in Canada, retailer Future Shop (a subsidiary of Best Buy) is promoting select Blu-ray and HD-DVD titles at 2 for $25 $50. Amazon.com appears to be in clearance mode on HD-DVD, offering up to 53% off select titles.

There are rumors raging across the blogosphere that Circuit City is unloading their HD DVD player inventory, not as a "get ready for the new model" move, but as a strategic shift toward backing Blu-ray.

At press time, Circuit City had not supplied me with an official statement on their position.

Reading the sale flyers in my mailbox for the past few weeks, the retail offers for Blu-ray have been extremely aggressive. Through the big-box retailers, Panasonic, Sony and Sharp have all been offering free Blu-ray players bundled up with flat panel televisions.

Some industry watchers (myself included) have called foul on this, asserting that getting a free player with a TV you would have bought anyways is hardly indicative of swelling consumer demand. (Especially considering that Panasonic and Sharp are industry leaders and the darlings of Consumer Reports in the plasma and LCD categories, respectively.)

But is any of this indicative of either HD optical disc format gaining traction with consumers? Or are these last ditch Hail Mary plays on the part of both camps?

In my opinion, bundling hardware along with TV purchases seems like a last ditch effort to increase the installed base, even at the cost of devaluing the product as not just a commodity, but a freebie.

Even though more industry watchers are declaring HD DVD's death, I can't help but wonder if the Blu-ray camp knows that they have a limited amount of time to press their advantage before HD downloads make the whole struggle moot.

With iTunes' now offering sales and rentals of HD movies and with the expected growth of media centers, you don't have to look to far into the future to see the end of the sidewalk for physical media.

Last March, tech guru Paul Kedrosky described the format war as "two dog packs fighting over a decomposing bone." His quip is starting to look even more correct than it did a year ago.

So far, we know what's going in in retail, and we always know what the fanboys on either side who fill up the comments section think, but I'd like to hear input from integrators about what's actually happening in custom.

Are any of you installing any players that aren't a Playstation 3? What are your clients asking about, and how are you answering them?

Let us know in the comments below.

Lee Distad is a freelance CEDIA Certified Professional Designer who offers design and process consultation to firms in the Custom Installation industry, as well as copy writing and other professional writing services. Lee’s business and industry blog can be read at http://www.leedistad.com

This story was updated at 1:00 PM EST to fix the price of Future Shop's promos, as pointed out by commenters Daniel, Craig and Stephen.

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Article Topics

News · Product News · Blu-ray · Blu-ray · All topics

36 Comments

Posted by Michael  on  01/31  at  07:31 AM

I have been advising and selling my clients DVD Players that upconvert to 1080; because if you persuade them to choose either format which happens to be the format that looses the war the first question you receive is why did you sale me that player?...I followed your advise your the expert.

Posted by cinevidia  on  01/31  at  10:06 AM

I to have been selling upconvert DVD players also.  I had a client go with HD DVD in their main room as they had a PS3 in the second room.  They preferred HD DVD since the used Netflix. 
Most clients were planning on HD DVD as the payer and the discs were more affordable until the Warner decission. Now they are considering Blu-ray but are holding off since they really can’t justify $30/disc.

I’m taking advantage of the HD DVD disc sales myself. wink

Posted by Phil  on  01/31  at  11:27 AM

I’d like to know what HD video on demand or HD Pay Per View sales are compaired to Blue Ray and HD DVD.

Posted by Dave  on  02/01  at  08:37 AM

I’m tired of the HD download argument.  I DO NOT WANT HD DOWNLOADS.  I want to be able to hold the movie I own, not have it sitting on a hard drive waiting to get corrupted. 

Those HD dowloads on Itunes are sorry examples of HD, full of compression artifacts and no hires audio.  This is not acceptable to me.

Not sure I understand the Netflix comment above as Netflix supports HD-DVD and BluRay.

Posted by Daniel  on  02/01  at  08:39 AM

Where the heck is this Futureshop deal??? All I see is 2 for 50 Blu-rays!??

Posted by Jeff  on  02/01  at  09:18 AM

http://news.punchjump.com/article.php?id=5485

The official CircuitCity statement can be found here.


But basically, if you don;t bother w/ the link, the pertinent info is:

(from the punchjump.com article)
Circuit City stores will continue to sell HD DVD products at retail amid a recent clearance of stand-alone players at select locations.
A representative told Punch Jump Wed. that Circuit City will continue sale of Toshiba Corp.‘s HD-A3 HD DVD player at $149 and the HD-A30 at $199.

The clearance of third-generation HD DVD players was said to be inadvertent.

Additionally, the representative said that over the last week Circuit City experienced strong HD DVD sales and will continue to remain platform agnostic.

Select Circuit City stores last week sold the HD DVD stand-alone players as clearance items as low as $100.04.

Posted by Jason  on  02/01  at  09:30 AM

I am tired of uninformed authors, writing articles about the HD format war.  Anyone who has followed it all would realized that Amazon routinely runs specials on both HD DVD and Blue Ray movies.  To suggest that they are somehow in “Clearance” mode is ignorrant.  By the way, they are also selling 27 Warner Blu Ray Titles for up to 53% off… Oh my god… Blu Ray must be buckling!! 

That must also mean that Blu Ray was on “Clearance” all last year due to the Buy One Get One Free deal that Amazon ran for almost a year.

As for speculating on Circuit City’s motives, that is rediculous and only spreads rampant rumors and hearsay.

Get a clue man.  Do some research before posting Fanboy articles.

Let’s also state something that seems to go unmentioned.  Blu Ray currently has roughly 70% studio support and HD DVD the other 30%.  This is including the “exclusive” move Warner has made to Blu Ray.  Also, average statistics show that of all HD movies sold 66% are Blu Ray and 34% are HD DVD.  This to me translates to a win for HD DVD.  Look at it this way, Blu Ray has twice as many studios, so they should in theory sell twice as many discs.  Not happening.  Especially considering the stand alone installed base of HD DVD players is 64% more than all stand alone Blu Ray players combined, which doesn’t include the PS3 for obvious reasons.  Which also doesn’t include the 1 free Blu Ray that everyone got when they bought a PS3, which accounts for at a minimum 8 million movies.  Recent promotions have allowed even more free movies, so that number is certainly higher.


Those are the numbers.  Believe in that.

Posted by Neil  on  02/01  at  09:41 AM

“Buy a stand alone HD DVD Player and GET FIVE FREE MOVIES!!” just seems to strike more than a few people as an act of desperation. Don’t come in here flaming because you called a winner before the dust cloud even started to rise and are now in need of a little preperation H.
When does a format war end? Who cares? It’s the momentum that leads one side to victory that counts, and it’s obvious who’s got it.
It also strikes me funny that no one wants to count the PS3s in the numbers game. Like they don’t matter, or count. I know I bought mine strictly to collect dust.

Posted by Ed  on  02/01  at  09:48 AM

Just made a mental note to “read with caution” when I see Lee Distad’s name on a column.  The undeclared (insidious) anti-BluRay stance makes his comments suspect, and dangerous to the sheeple…

Posted by BL  on  02/01  at  09:53 AM

“Buy a stand alone HD DVD Player and GET FIVE FREE MOVIES!!” just seems to strike more than a few people as an act of desperation.”

Neil, maybe you missed it, but you get 5 free movies when you buy a Blu-ray player as well. Is Blu-ray desperate as well?

Posted by Craig  on  02/01  at  10:14 AM

That’s an error. Future Shop has them 2 for $50. Not 2 for $25.

Posted by J. Derda  on  02/01  at  10:30 AM

Will HD downloads replace physical media?  Yes, but not right now and probably not for awhile.  Downloading “POTC 3” took 3 hours on my Xbox 360 with a 8MBPS connection.  The quality was great but three hours?
For now downloads will be used in conjunction with Blu-Ray/On Demand/HD DVD. 
Instead of arguing whether downloads are as good as disc, which format is better, etc. we should be ecstatic that we have so many ways to access HD material.

Posted by Soundzilla  on  02/01  at  10:41 AM

The Blu-ray camp has to hurry to stave off HD downloads that will replace Blu-ray? ROFL!

Let me know when you have the bandwidth in your home for your 1080p streaming video at the same quality as Blu-ray discs, and enough hard drive space to save what you download.

See you in 2015 or so.

Posted by stephen  on  02/01  at  10:57 AM

I am sorry to say that your are absolutely wrong…..futureshop.ca is offering 2 movies for 50 bucks not 2 for 25 bucks as falsely stated….boo…you guys should check your lead off info….

shame on u…

Posted by Phil  on  02/01  at  11:06 AM

In my comment I was referring to ppv and on demand from cable, fios, or uverse. I am not a “fanboy” for any 1 particular HD format. From a businessman’s point of view I am interested in where Joe Consumer Prefers to get his content. This is CE Professional site .... isn’t it? I’m interested in what’s best for my customers and my business. Not what I prefer.

Posted by Raj Periyasamy  on  02/01  at  11:48 AM

“two dog packs fighting over a decomposing bone.”

I disagree on this point. Online movie downloads and physical media, are targetted towards two different audiences. Online downloads cannot provide the same image and audio quality as you would get with physical media. A hidef movie that is compressed to 1Gig will have compression artifacts and picture noise, which make it un viewable in a large screen. However, it is the best choice for viewing in a computer screen or an iPod or similar device. The Blu-ray/HDDVD media on the other hands brings the best possible picture with minimal compression and best possible audio including uncompressed hires audio. So, the physical hidef media is here to stay.

Posted by Lee Distad  on  02/01  at  12:21 PM

My bad on the 2 for $25 typo.  Correction has been made.

Posted by Jason  on  02/01  at  01:41 PM

We don’t count PS3’s in the Blu Ray player count becuase of the base of people who buy it.  For instance kids.  They want it for gaming, not movie watching.  Most people who own it don’t even know it plays Blu Rays or even know what a Blu Ray is.  I am quite certain that anyone who has bought a stand alone HD DVD or Blu Ray player knows exactly what it does, and what it plays.  The same cannot be said for PS3 owners.

Posted by Bryan  on  02/01  at  03:06 PM

These points of contention are all too passionate and interested to observe what is really happening.  And it is simply this…media markets are fracturing.  HD media will ultimately share the stage with downloads and old DVD tech.  I’m sorry folks but what you have here is the makings of a fabulously fractured marketplace.

1) Xboxers are embracing downloading as well as new school kids who have access to highspeed lines.  Further Sony is rumored to be revamping the PS3 for the Home store where they will also sell downloads. Add Vudu and Apple to that mix…that’s a whole lot of downloading starting to happen.

2) Look for Walmart, Best Buy and others getting into the download business along with NetFlix and BBuster.  But they need to maintain existing lines as well and will for a while…a whole division of profit can’t just be let go into the wind…and not given current economic conditions.

3) Finally, the average consumer doesn’t fully use DVD tech.  Many lack a TV to show progressive in 480. Further hi-res sound doesn’t mean jack if you are even listening to Dolby Pro-Logic (yes, many are that far behind).  1080P will become more mainstream over time, but hi-res sound will like SACD/DVD-A remain niche to truly high-end users that have the money for 1.3a receivers, 7 channels of speakers and the know how to blend in a sub to get great sound such as myself.

For at least those reasons, this market will remain very fractured for a lot longer than anybody in the tech community really wants to see.  Sorry, but facts are what they are.

Posted by Mike  on  02/01  at  04:02 PM

I agree with Bryan; as various technologies evolve, what we see emerging are numerous ways to get HD content.  So what?  I don’t understand why the studios fear this (other than Sony, for obvious reasons).  They will be able to sell their content multiple times, in multiple formats, with the consumer choosing the format that has the best quality to utility ratio for his intended use.

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