Best Buy Primed for 'Blu' Fourth Quarter

Lee Stewart · 07-30-2008, 07:45 AM

Best Buy Primed for 'Blu' Fourth Quarter

Quote:

Author: ERIK GRUENWEDEL
EGRUENWEDEL@QUESTEX.COM
Posted: July 28, 2008
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The success (or failure) of Blu-ray Disc hinges in large part on the role big box retailers such as Wal-Mart Stores Inc., Target Corp. and Best Buy Co. Inc. play selling the format to the general public.

Minneapolis, Minn.-based Best Buy arguably stocks the largest number of Blu-ray movies for sale at retail. Combined with an expansive selection of HDTVs, in-store Magnolia Home Theater and in-home Geek Squad divisions, and positive mojo among CE aficionados, the retailer continues to impress financially.

With more than 1,000 U.S. stores, Best Buy generated $9 billion in revenue during the most recent quarter, including 3.7% same-store sales increase in stores open at least 12 months. Fiscal year 2009 revenue guidance exceeds $43 billion, including a 1% to 3% comp-store sales bump.

Best Buy last week cut $20 from its house brand Insignia Blu-ray player, a move company spokesperson Brian Lucas said was done to jump-start dialogue with consumers about the merits of Blu-ray and high-definition packaged media. Home Media Magazine asked Jill Hamburger, VP of entertainment for Best Buy, to continue the discussion.

HM: The home entertainment industry and studios are putting a major emphasis on Blu-ray in the fourth quarter. How important is Blu-ray to Best Buy?
Hamburger: Blu-ray is primed to be a hot gift this holiday season. We know that customers who have invested in HD home theater systems want to watch HD content, and Blu-ray is the best way to get the most out of the movie watching experience.

This will be the first holiday season where we can talk to customers about Blu-ray without the distraction of a format war. We can focus on showcasing the picture, sound and features of the format, which we believe customers will be blown away by.

We also believe the lineup of movies coming out on Blu-ray this year, particularly for the holidays, will help generate a great deal of excitement. Titles such as The Dark Knight, Prince Caspian and Hellboy 2 are going to drive a lot of BD interest and will be great for showcasing the possibilities for the format. It is the content that drives the excitement, so we want to be sure customers know about the Blu-ray titles.

HM: Best Buy is considered the No. 1 retailer of Blu-ray movies. What are you doing to sell and promote the new format?
Hamburger: Our focus is on having a conversation with customers to educate them about Blu-ray and inspire them with the possibilities the format has to offer. We will do this in-store through displays that showcase Blu-ray’s incredible picture and sound. We will also do it by equipping our salespeople with the information and tools they need to have a great conversation with customers about the benefits of Blu-ray. You will also see regular promotions called out on our Web site, in our circular and in stores to help people get into Blu-ray and start building their movie libraries.

We are constantly working to improve our in-store experience and training to be sure we are doing what we can to inspire people with what Blu-ray has to offer.

Another area that really helps us in terms of getting people excited about Blu-ray is our strength in the gaming category. [Sony PlayStation 3 game] consoles have been a great way to get a very high-quality Blu-ray player into households.

HM: Are you doing anything to educate consumers about what Blu-ray brings to the home entertainment experience?
Hamburger: Our No. 1 educational resource is our Blue Shirt sales staff. They are the best tools we have to reach out to customers, to have a good conversation with them about Blu-ray, to demonstrate the capabilities of the format, and to answer any questions people may have. So first and foremost we want to be sure our salespeople are trained and ready to help people who are interested or curious about Blu-ray.

We will have interactive displays in our stores to let people test drive Blu-ray, in addition to educational resources online at BestBuy.com. We will also use our Magnolia Home Theater listening rooms to give demos of the format so customers can truly experience the impact of HD picture and sound.

HM: Is the side-by-side visual display still the best tool to promote Blu-ray?
Hamburger: It’s one way to promote Blu-ray. We also believe sound is important in generating excitement for the format. We try to promote the format in different ways throughout our store. In the main sales floor it’s mostly about the picture … showcasing the movies on large 1080p screens. In the Magnolia Home Theater areas we are better able to showcase the sound. We believe the more we can engage customers and get them to interact, look and listen to Blu-ray, the more likely they are to invest in the format.

HM: What do say to consumers who say they are satisfied with DVD?
Hamburger: DVDs continue to be a strong category for Best Buy. For many people who have smaller televisions or don’t have 1080p screens, DVDs are probably the best option. But for people who have HD home theater systems and want the best movie watching experience, the difference is compelling.

Our job is to ask customers the right questions to figure out what is best for them. If they are movie lovers and have a large HD television, we think Blu-ray is something they want to learn about. Once they get a look at the picture and hear the sound, customers are inspired by the difference.

HM: You sell upconverting DVD players. Don’t they undercut the argument to buy Blu-ray?
Hamburger: Not really. Upconverting DVD players are an inexpensive option for people looking to maximize the picture quality of their existing DVDs. If you don’t have a 1080p screen or if you have a smaller television, upconverting DVDs is a great option. Blu-ray offers both upconversion and true HD. For people looking to get the most out of their home theaters, it’s the best option and with prices coming down it’s becoming even more attractive to mainstream customers.

There is a place for both types of players in the house.

HM: Is Best Buy pursuing a streaming or download strategy?
Hamburger: We are not able to comment on any tests or future plans in this area other than to say we are always looking at options to meet customers’ needs.

http://www.homemediamagazine.com/new...ticle_ID=13204

Lee Stewart · 07-30-2008, 03:17 PM

Quote:

HM: You sell upconverting DVD players. Don’t they undercut the argument to buy Blu-ray?
Hamburger: Not really. Upconverting DVD players are an inexpensive option for people looking to maximize the picture quality of their existing DVDs. If you don’t have a 1080p screen or if you have a smaller television, upconverting DVDs is a great option. Blu-ray offers both upconversion and true HD. For people looking to get the most out of their home theaters, it’s the best option and with prices coming down it’s becoming even more attractive to mainstream customers.

There is a place for both types of players in the house.

So . . . .

The fact that BB doesn't feel that UP DVD players are a threat or a hinderance to the growth of BD and that the type of HDTV a person has will determine if BD interests them. . .

Do you agree with that?

Mase · 07-30-2008, 03:20 PM

Quote:

Originally Posted by Lee Stewart

So . . . .

The fact that BB doesn't feel that UP DVD players are a threat or a hinderance to the growth of BD and that the type of HDTV a person has will determine if BD interests them. . .

Do you agree with that?

I agree with what was said in that quote.... Almost the exact way I feel about the presence of UP DVD in the market today..

Bravestime · 07-30-2008, 03:33 PM

I agree with it. I can see BD surviving with DVD. Will DVD take away some BD sales, sure. Will DVD kill BD, I don't think so. I believe there enough consumers that are eager to get the most out of their HT systems that they will invest in blu-ray to ensure BD survival.

ssjLancer · 07-30-2008, 03:36 PM

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Originally Posted by Lilmase1153

I agree with what was said in that quote.... Almost the exact way I feel about the presence of UP DVD in the market today..

Like he said every BD player is also an upconverting player. If it was a hinderance then the CE companies wouldnt have included dvd upscaling.. heck they wouldnt even include dvd support.

Lee Stewart · 07-30-2008, 03:41 PM

People are spending more money for a 1080 HDTV then they are for a 720 or 768 HDTV.

Why? . . . Money?. Value?. Ignorance?

If I were a BD salesman - isn't the 1080 customer going to be more receptive to spending an extra $400?

For $400 - the 720/768 customer can buy a 1080 HDTV. But he probably can't buy a 1080 HDTV and a BD player because that would be an extra $800.

ssjLancer · 07-30-2008, 03:55 PM

Well I do think the guy is wrong for thinking you need a 1080p tv for blu ray.
Upscaling still looks horrendous on my 768p tv.

In fact I think they might be confusing people with the whole 1080p marketing. I think we've had at least 3-4 new users come in here asking 'Should I get a blu ray player for my 720p tv?'

Mase · 07-30-2008, 03:59 PM

Quote:

Originally Posted by ssjLancer

Like he said every BD player is also an upconverting player. If it was a hinderance then the CE companies wouldnt have included dvd upscaling.. heck they wouldnt even include dvd support.

True, they are but as we all know not all BD players are created equally.. And what about DVD players for the kids room or just for the bedroom?

UP DVD players have their place in todays market just as Blu-Ray players do.. IMO UP DVD players are just laying the ground work for an HD explosion in the coming years.. It gives the consumer a taste for good PQ, and when they realize they are not utilizing their large purchase fully(HDTV) and notice Bd players at an affordable price it will be a domino effect..

Regardless if my theory pans ot or not, BR is here to stay whether or not it becomes mainstream or just an enthusiast/status symbol niche market..

crazyal · 07-30-2008, 04:02 PM

Quote:

Our job is to ask customers the right questions to figure out what is best for them. If they are movie lovers and have a large HD television, we think Blu-ray is something they want to learn about. Once they get a look at the picture and hear the sound, customers are inspired by the difference.

I wonder what "large" is to BB? Does 42" qualify for large or is that more of a fuzzy medium area? I also think they shouldn't use a massive screen to show of BD. While it looks impressive it also gives off a feeling that, like the HDTV, is more than you really need.

**PFC5** · 07-30-2008, 04:59 PM

Quote:

Originally Posted by ssjLancer

Well I do think the guy is wrong for thinking you need a 1080p tv for blu ray.
Upscaling still looks horrendous on my 768p tv.

In fact I think they might be confusing people with the whole 1080p marketing. I think we've had at least 3-4 new users come in here asking 'Should I get a blu ray player for my 720p tv?'

I have two 1080p displays with one being 47" & 50" for the other.

Previous to getting the 50" 1080p plasma I had a 720p DLP and the PQ for resolution on the 720p was still great when feed a 1080i signal.

I see many people getting confused as to whether they should wait until they can get a 1080p display to buy into BD or get one now. I think the whole 1080p "FULL HD" plan against HD DVD in the first 8 months might backfire on them now to some degree so I also disagree with the BB guy.

Chris Gerhard · 07-30-2008, 05:05 PM

The guy sounds like he knows what he is talking about to me and it appears Best Buy will be a major player with Blu-ray and Best Buy is very optimistic about the Blu-ray future. I sure don't see any negative Blu-ray spin possible from this. Blu-ray will have a great fourth quarter is what I expect.

Chris

The_Omega_Man · 07-30-2008, 05:38 PM

I do not agree with everything as stated in the article.

I think that BB is simply in business to sell you something!....Anything, that you want to pay them for. Be it BD or SD DVD UP Players + Media and AV & other required CE equipment. The goal is to get you to buy something today that you will need to come back tomorrow and buy more, to feed that which you just bought yesterday!

I do think that the last comments on DL are very interesting. DL will eventually reign supreme, when that will be is anyones guess though. I'm sure that the BDA and Toshiba would love to delay that as much as possible...UNLESS it ends up being more profitable for them than either BD's or DVD's licensing!

dsskid · 07-31-2008, 07:37 AM

Quote:

Originally Posted by The_Omega_Man

I do not agree with everything as stated in the article.

I think that BB is simply in business to sell you something!....Anything, that you want to pay them for. Be it BD or SD DVD UP Players + Media and AV & other required CE equipment. The goal is to get you to buy something today that you will need to come back tomorrow and buy more, to feed that which you just bought yesterday!

I do think that the last comments on DL are very interesting. DL will eventually reign supreme, when that will be is anyones guess though. I'm sure that the BDA and Toshiba would love to delay that as much as possible...UNLESS it ends up being more profitable for them than either BD's or DVD's licensing!

Well isn't that why retailers are in business, to sell you something, and hopefully keep you coming back for more?

I think what sets Best Buy apart from other B&M retailers is they at least try to educate the consumer to some degree. Circuit City, Walmart and others are content with moving product.

DVD is not going away anytime soon. The evolution towards BD will be a slow process, and the two will coexist for some time, much on the same way audio tapes & CDs, VHS & DVD coexisted. Nothing wrong with that.

It's nice to hear that the retailers are on board with the 4th quarter aggressive BD push, because that can mean lower pricing for the consumer.

HD Goofnut · 07-31-2008, 08:42 AM

Quote:

Originally Posted by dsskid

Well isn't that why retailers are in business, to sell you something, and hopefully keep you coming back for more?

I think what sets Best Buy apart from other B&M retailers is they at least try to educate the consumer to some degree. Circuit City, Walmart and others are content with moving product.

DVD is not going away anytime soon. The evolution towards BD will be a slow process, and the two will coexist for some time, much on the same way audio tapes & CDs, VHS & DVD coexisted. Nothing wrong with that.

It's nice to hear that the retailers are on board with the 4th quarter aggressive BD push, because that can mean lower pricing for the consumer.

Exactly, the point of DVD existing with BD is help drive the price of BD down, even though that may be a slow process. It happened with CDs and tapes and with DVD and VHS. It is now beginning to happen with DVD and BD. We'll probably eventually see $10-15 as a common price range for SD DVDs and $20-25 for BDs.

Type A · 07-31-2008, 09:32 AM

Quote:

Originally Posted by ssjLancer

Well I do think the guy is wrong for thinking you need a 1080p tv for blu ray.
Upscaling still looks horrendous on my 768p tv.

In fact I think they might be confusing people with the whole 1080p marketing. I think we've had at least 3-4 new users come in here asking 'Should I get a blu ray player for my 720p tv?'

I agree. Those that say you need 1080p have obviously never observed up scale and blu side-by-side on a 720p! Blu has more over upscaling than just resolution, something even die-hard-dvd enthusiasts, who own hdtvs', seem to love to ignore.

Does upscaling hurt blu sales? You bet your ass. But thats because of ignorance, and extremely loose industry definitions of what constitutes "HD", and certainly not because blu is any less apparent to 720p display owners

07-30-2008, 03:33 PM	#4
Bravestime Supporter of HiDef Join Date: Sep 2007 Location: Aiken, SC Age: 53 Posts: 4,415	I agree with it. I can see BD surviving with DVD. Will DVD take away some BD sales, sure. Will DVD kill BD, I don't think so. I believe there enough consumers that are eager to get the most out of their HT systems that they will invest in blu-ray to ensure BD survival. __________________ Life is Short, Watch a Movie

07-30-2008, 05:38 PM	#12
The_Omega_Man Don't touch the remote! Join Date: Apr 2007 Location: Encino,CA Posts: 3,431	I do not agree with everything as stated in the article. I think that BB is simply in business to sell you something!....Anything, that you want to pay them for. Be it BD or SD DVD UP Players + Media and AV & other required CE equipment. The goal is to get you to buy something today that you will need to come back tomorrow and buy more, to feed that which you just bought yesterday! I do think that the last comments on DL are very interesting. DL will eventually reign supreme, when that will be is anyones guess though. I'm sure that the BDA and Toshiba would love to delay that as much as possible...UNLESS it ends up being more profitable for them than either BD's or DVD's licensing! __________________ Lvng Rm Sony KF50WE610 HDTV D* HR-21 HD DVR XA2 HD DVD Onkyo TX-NR905 JVC HR-S3500U S-VHS Hrmony One Energy Encore 5.1 Spkr Mstr Bdrm Tosh 46XF550U HDTV XA2 HD DVD D* HR-21 HD DVR Onkyo TX-SR606 Hrmony 659 Polk 5.1 Spkr Office Samy LNS3252D HDTV D* HR-20 HD DVR A2 HD DVD Sony RDR-HX715 DVD Rec. Fisher FVH-4910 VHS Onkyo TX-SR674 Psyclone PSC47 HDMI Sw. Hrmony 550 Polk RM6750 5.1 Spkr Gst Rm Samy UN46B7100 HDTV D* HR10 HD DVR XBOX360 Elite+HD DVD PS3 60GB Onkyo TX-SR704 Energy C-7 Spkr Hrmony 880

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07-30-2008, 03:41 PM	#6
Lee Stewart Behold - the future! Join Date: Jan 2007 Location: Albuquerque, NM Age: 58 Posts: 25,193	People are spending more money for a 1080 HDTV then they are for a 720 or 768 HDTV. Why? . . . Money?. Value?. Ignorance? If I were a BD salesman - isn't the 1080 customer going to be more receptive to spending an extra $400? For $400 - the 720/768 customer can buy a 1080 HDTV. But he probably can't buy a 1080 HDTV and a BD player because that would be an extra $800.

07-30-2008, 03:55 PM	#7
ssjLancer High Definition is the definition of life. Join Date: Jan 2008 Posts: 1,968	Well I do think the guy is wrong for thinking you need a 1080p tv for blu ray. Upscaling still looks horrendous on my 768p tv. In fact I think they might be confusing people with the whole 1080p marketing. I think we've had at least 3-4 new users come in here asking 'Should I get a blu ray player for my 720p tv?'

07-30-2008, 05:05 PM	#11
Chris Gerhard High Definition is the definition of life. Join Date: Nov 2005 Posts: 8,207	The guy sounds like he knows what he is talking about to me and it appears Best Buy will be a major player with Blu-ray and Best Buy is very optimistic about the Blu-ray future. I sure don't see any negative Blu-ray spin possible from this. Blu-ray will have a great fourth quarter is what I expect. Chris