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BlockbusterWill Rent Only BD's At Their 1400+ Stores

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Old 06-17-2007, 03:32 PM   #1  
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Arrow Blockbuster To Rent Only BD's At Their 1400+ Stores

AP Exclusive:
Blockbuster to favor Blu-ray HD discs over DVD format
By Gary Gentile / AP Business Writer
Article Launched: 06/17/2007 02:40:24 PM MDT

LOS ANGELES - Blockbuster Inc. will rent high-definition DVDs only in the Blu-ray format in 1,450 stores when it expands its high-def offerings next month, dealing a major blow to the rival HD DVD format.

The move, being announced Monday, could be the first step in resolving a format war that has kept confused consumers from rushing to buy new DVD players until they can determine which format will dominate the market.

Blockbuster has been renting both Blu-ray and HD DVD titles in 250 stores since late last year and found that consumers were choosing Blu-ray titles more than 70 percent of the time.

"The consumers are sending us a message. I can't ignore what I'm seeing," Matthew Smith, senior vice president of merchandising at Blockbuster, told The Associated Press.

Blockbuster will continue to rent HD DVD titles in the original 250 locations and online, the Dallas-based company said.

The decision was helped in large part by the lopsided availability of titles in Blu-ray, Smith said. All major studios except oneare releasing films in Blu-ray, with several, including The Walt Disney Co., releasing exclusively in Blu-ray. Only Universal Studios, which is owned by General Electric Co., exclusively supports HD DVD.Warner Bros., a unit of Time Warner Inc., and Paramount Pictures, which is owned by Viacom Inc., release films in both formats.

"When you walk into a store and see all this product available in Blu-ray and there is less available on HD DVD, I think the consumer gets that," Smith said.

The rollout of Sony Corp.'s PlayStation 3 game console, which comes standard with a Blu-ray drive, also helped give the format momentum, Smith said.

Blockbuster's decision, while significant on it's own, could boost Blu-ray even more if other retailers follow suit.

"It will help shift the balance toward Blu-ray, clearly," said Richard Doherty, president of The Envisioneering Group, a research company.

The North American HD DVD Promotional Group said Blockbuster's decision was shortsighted and skewed by the success of films released by Blu-ray studios in the first three months of the year. The group said HD DVD has since gained momentum, selling more players and popular titles such as "The 40-Year Old Virgin" and "The Matrix" trilogy.

"I think trying to make a format decision using such a short time period is really not measuring what the consumer is saying," said Ken Graffeo, co-president of the group.

The two formats have been battling it out since they both hit the market last year. Studios hope the high-definition discs, with their sharper picture and more room for interactive special features and games, will replace standard definition DVDs.

The formats are incompatible and neither will play on standard DVD players, although standard DVDs can be viewed with either a Blu-ray or HD DVD player.

The Blu-ray camp has been helped by the release of such huge hits as "Casino Royale," ''Pirates of the Caribbean" and "Spider-Man" coming out exclusively in its format.

As the battle has unfolded, the price of the high-definition players needed to show the movies has plummeted. Toshiba Corp., the major supporter of HD DVD, is selling its player for $299 with a rebate, down from $499 when it first went on sale.

Sony, which is pushing Blu-ray, recently slashed the price of its player by more than half to $499. The player retailed for $1,000 when it first was introduced.

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Old 06-17-2007, 03:36 PM   #2  
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Well this doesn't look too good for us HD DVD owners.

Guess that is an understatement!

Oh well . . miminum investment (less than $500 including movies and with 350+DVD's - a great UC unit)and I still might get Blade Runner (Oct) before the plug is pulled.
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Old 06-17-2007, 03:47 PM   #3  
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Well, someone paid some money to Blockbuster inorder to achieve this.

Sony has always been good at doing this.

I'm okay with this, i've always preferred Netflix anyway, my Blockbuster DVD rentals are many times really filthy and torn up anyway both DVDs and HD DVDs, where the Netflix DVD rentals are always in really good shape (I don't know why but that is the case generally).
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Old 06-17-2007, 03:52 PM   #4  
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They have been stocking Blu Ray exclusively in the UK for a while. (They've never had HD DVD in) it was a decision made to go with the PS3 games/consoles they rent out. So far it hasn't been working out too well for them from all accounts though.

Online rentals are rapidly taking custom away from Blockbuster and their profits have suffered massively as a result. They've just desperately flogged GameStation to GAME to try and patch a hole in their money crisis, however that seemed very short sighted to me, as GameStation was actually making them money

Store rentals are on their way out. When you have the choice of online rentals with a huge catalogue to choose from, delivery to your door, and free return postage for $16-$30 depending on your package. Or paying $8 per rental for 2 nights, it's no wonder really.

Not sure how much impact this will have in the grand scheme of things. But Blockbuster are hardly the most intelligent of companies.
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Old 06-17-2007, 03:52 PM   #5  
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When Blockbuster decides the fate of anything will be a true revelation.
They may well be shooting themselves in the foot, those are a still quite a few DVDs they will never rent.
But I don't find all my Netflix that pristine. In fact, I am sometimes surprised at the abuse, especially more recent releases in HD.
But all in all I rarely have problems but have been known to wash them on occasion.
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Old 06-17-2007, 03:58 PM   #6  
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They have been stocking Blu Ray exclusively in the UK for a while. (They've never had HD DVD in) it was a decision made to go with the PS3 games/consoles they rent out. So far it hasn't been working out too well for them from all accounts though.

Online rentals are rapidly taking custom away from Blockbuster and their profits have suffered massively as a result. They've just desperately flogged GameStation to GAME to try and patch a hole in their money crisis, however that seemed very short sighted to me, as GameStation was actually making them money

Store rentals are on their way out. When you have the choice of online rentals with a huge catalogue to choose from, delivery to your door, and free return postage for $16-$30 depending on your package. Or paying $8 per rental for 2 nights, it's no wonder really.

Not sure how much impact this will have in the grand scheme of things. But Blockbuster are hardly the most intelligent of companies.
Huge impact. Game over. BB launched DVD as a success BECAUSE they made the decision to carry DVD in their stores. Joe Public goes to BB or Hollywood to rent movies more than he does by mail. When he see's only one HD format - that is what he will choose.

The consumer did not have the chance to "make the decision" as to which format will win.

THAT decision was just made by BB. Whether Sony or the BDA had anything to do with it doesn't matter. Yes - that fact that they might have given them a great revenue sharing program (better than expected) to really drop a nuclear bomb on HD DVD - the outcome is - no HD DVD at BB except for 250 stores which will shrink in time.

Joe Public hates making a decision on CE equipment - he hates to be wrong. So the decision has been made for him.
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Old 06-17-2007, 04:10 PM   #7  
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Take it you havn't seen how much Blockbusters revenue has dropped in recent years then? A far bigger impact will be if any of the Super markets or whatever adopt a format with their own budget player.

Video rentals from stores are a dying trade. Their recent takings show this. (btw, they've been Blu Ray exclusive for a while) a quick google for Blockbuster finances or whatever, will turn up plenty of worrying stories about their financial position.

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Old 06-17-2007, 04:25 PM   #8  
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Take it you havn't seen how much Blockbusters revenue has dropped in recent years then? A far bigger impact will be if any of the Super markets or whatever adopt a format with their own budget player.

Video rentals from stores are a dying trade. Their recent takings show this. (btw, they've been Blu Ray exclusive for a while)
That doesn't jive with the article's descritpion of the experiment that BB did. Or else the experiment has been over "for a while" and none of us knew the results.

You seem to discount this as "nothing to be concerned about" and I just don't see it. No waiting for the mail - do it on your way home - you can check the disc before you rent it to see it's condition.

There is such a thing as "bouncing back" in business, especially if you have an exclusive. I haven't heard a peep from Holleywood Video. And to many, renting 10 movies a month for $30 versus $15 is not a big deal.
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Old 06-17-2007, 04:27 PM   #9  
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At least dual format HD owners (a segment that will keep growing) will know what they can't rent at Blockbuster, so those looking for HD DVD exclusives can go elsewhere without wasting there time stepping inside the store. I'm sure other outlets will capitalize on this on Blockbuster will eventually stock HD DVD, too.

Anyway like Mike said, the B&M rental business is a dying trade and Blockbuster decision will have minimal influence on the format war.
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Old 06-17-2007, 04:35 PM   #10  
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At least dual format HD owners (a segment that will keep growing) will know what they can't rent at Blockbuster, so those looking for HD DVD exclusives can go elsewhere without wasting there time stepping inside the store. I'm sure other outlets will capitalize on this on Blockbuster will eventually stock HD DVD, too.

Anyway like Mike said, the B&M rental business is a dying trade and Blockbuster decision will have minimal influence on the format war.[/
If you believe this you are living in a fairy tale. Just the announcement has a huge affect. The largest retail video rental chain in the world has choosen BD. That sends a message to Joe Public who probably has a BB card in his wallet, whether he uses it any more, or not.

It tells the masses that they have made a decision and BD is the decision.

Want to bet Wal-Mart is next? Sony has already inked a deal with them on LCD's.

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Old 06-17-2007, 04:50 PM   #11  
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Wal Mart et al will have a far bigger influence on this war than a has been video rental store that if it's present situation continues, won't be in business in 3 years time.

At the moment, the actual movies aren't so much the issue. It's more the cost of the hardware. Chinese players this Xmas are HD DVDs only hope of prevailing as the main format. They always were, before and after the Blockbuster announcement.

It's larger mainstream retailers that will be the core supply chain for these chinese players. Places like Wal Mart will end up buying them in bulk and sell them on for very little (if any) profit to drive people into the stores to buy groceries etc.

Blockbuster in the UK has been stocking Blu Ray since the PAL PS3 launch 3 months ago, they don't stock HD DVD. I wudn't worry too much yet. HD DVD should at least last long enough to see us through to much cheaper Blu Ray players and fully functioning Dual format players.
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Old 06-17-2007, 05:41 PM   #12  
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Well this doesn't look too good for us HD DVD owners.

Guess that is an understatement!

Oh well . . miminum investment (less than $500 including movies and with 350+DVD's - a great UC unit)and I still might get Blade Runner (Oct) before the plug is pulled.
This means absolutley nothing and can only hurt HD formats. More people renting instead of buying is not good for anybodys bottom line.
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Old 06-17-2007, 05:42 PM   #13  
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If you believe this you are living in a fairy tale. Just the announcement has a huge affect. The largest retail video rental chain in the world has choosen BD. That sends a message to Joe Public who probably has a BB card in his wallet, whether he uses it any more, or not.

It tells the masses that they have made a decision and BD is the decision.

Want to bet Wal-Mart is next? Sony has already inked a deal with them on LCD's.
Just the announcment has a huge effect. You are nuts......
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Old 06-17-2007, 05:58 PM   #14  
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Originally Posted by tcarcio View Post
Just the announcment has a huge effect. You are nuts......

This is just the start!!!
Blu ray is taking over the world!!!!
We are going to stamp it on everyone's forehead.
BLU RAY


I agree with Lee that this is a big announcment.
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Old 06-17-2007, 05:59 PM   #15  
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I agree with those thinking this will not have a big impact. All it will do is keep people like myself away from Blockbuster. I switched to netflix a long time ago due to always paying late fees. I've actually considered trying blockbuster again, but they just decided for me that I won't.

Here is the simple fact: Average Joe users needs to own a player to rent. PRice will have a much bigger impact on that than anything else. HD-DVD still holds the edge here.

Walmart or a chain that actually sell the players siding with one vendor would have a much bigger impact.
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