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Retailers’ Blu-ray Moves Ended Format War

Momentum was clearly against HD DVD in the days leading up to Toshiba’s decision to drop its HD DVD format as several of the country’s largest retailers announced their support for Blu-ray Disc.

Perhaps the biggest blows came when retail giant Wal-Mart and online video rental company Netflix announced plans to stop selling HD DVD products this year, making it difficult for customers to find discs to play on the machines.

Earlier, Best Buy said it would promote and position Blu-ray players to customers over HD DVD. The decisions follow similar steps taken earlier by Blockbuster and Target.

Wal-Mart said the change would take place quickly over the next several months whereby the retailer will phase out HD DVD offerings and reorganize shelf space, and by June Wal-Mart stores and Sam’s Clubs will offer only Blu-ray movies and hardware machines, as well as standard-definition movies, DVD players and up-converting machines.

“We’ve listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases,” said Gary Severson, home entertainment senior VP, Wal-Mart, U.S. “With the customers’ best interest in all we do, we wanted to share our decision and timeline with them as soon as possible, knowing it will help simplify their purchase decision, increase selection and increase adoption long term. We anticipate enhancing our selection with continued great values in high-definition Blu-ray products, so our customers can further enhance their entertainment experience at home.”

Wal-Mart will continue to sell through remaining HD product, but in less than 30 days customers will see a more predominant move toward Blu-ray in stores, clubs and online, the chain said.

In discussing the move on Wal-Mart’s company blog, Susan Chronister said, “If you bought the HD [DVD] player like me, I’d retire it to the bedroom, kid’s playroom or give it to your parents to play their John Wayne standard-def movies, and make space for a BD player for your awesome [high-def]experience,” she wrote.

Netflix said it would stop renting HD DVD titles and go exclusively with Blu-ray.

The online rental company said it expects to be out of HD DVD inventory by the end of 2008. The company had backed both formats since becoming available in 2006, but said that since six major studios will now issue high-definition disc titles only in Blu-ray, the time was right to give consumers direction.

“From the Netflix perspective, focusing on one format will enable us to create the best experience for subscribers,” the company said in a statement.

“The prolonged period of competition between two formats has prevented clear communication to the consumer regarding the richness of the high-def experience versus standard definition,” stated Ted Sarandos, Netflix chief content officer. “We’re now at the point where the industry can pursue the migration to a single format, bring clarity to the consumer and accelerate the adoption of high def. Going forward, we expect that all of the studios will publish in the Blu-ray format and that the price points of high-def DVD players will come down significantly. These factors could well lead to another decade of disc-based movie watching as the consumer’s preferred means.”

Similarly, big-box consumer electronics giant Best Buy stopped short of announcing exclusive support for Blu-ray Disc, but said that starting in March it will begin “prominently showcasing” Blu-ray Disc hardware and software in its retail stores and online.

The giant CE retail chain said the decision was made to give consumers direction and clear up confusion that remains in the ongoing HD disc format war. However, the company noted that it will continue to carry an assortment of HD DVD products for customers who want them.

At the time, Jodi Sally, Toshiba digital A/V group marketing VP, said: “It’s unfortunate to see a valued partner like Best Buy make the decision to push consumers toward Blu-ray. We’re also aware of the Netflix decision to only stock Blu-ray movies for rental going forward. Given these developments, Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players.”

The decisions followed Warner Bros.’ stunning announcement prior to International CES last month that it will back Blu-ray Disc exclusively starting in May. That defection left HD DVD only with Universal, Paramount and DreamWorks animation as its remaining major studio backers.