Toshiba: Strong start to HD DVD

UPDATE: But software sales had glitches

By Jennifer Netherby and Susanne Ault -- Video Business, 4/18/2006

Universal president Craig Kornblau demonstrates one of the HD DVD kiosks the studio sent to retailers including Wal-Mart.

APRIL 18 | HD DVD backers reported strong initial sales Tuesday as the first high-definition DVD players and discs launched at stores nationwide.

Toshiba players began to reach Best Buy, Wal-Mart and Sears stores Monday, with most retailers expected to get players by the end of the week, said Jodi Sally, VP of marketing for the Digital Audio and Video Group at Toshiba America Consumer Products.

“We’ve heard very positive sales reports so far,” Sally said Monday.

Software sales, meanwhile, got off to a slightly glitchy start. Stores in the Los Angeles area were carrying a light mix of movies, with about four or five copies of each of the three titles that debuted. Warner Home Video’s The Last Samurai and The Phantom of the Opera were widely available, but the studio’s planned Million Dollar Baby was delayed a few days.

Warner said problems with the Million Dollar Baby HD DVD master held back the title's shipment to retail. The studio is on track to send out discs Thursday and Friday, with stores starting to offer it April 20.

"We wanted to put a product together that we were happy with," Warner senior VP Steve Nickerson said.

Despite some rollout hiccups, Nickerson is cautiously optimistic about early consumer reaction.

"Between now and through the summer, there will be a lot of flexibility in studio's slate schedules and delivery of hardware that is related to the newness of the high-definition format," he said. "The initial reaction is that we are off to a really good start, but it's only a start. What we see is encouraging, where it certainly justifies putting [HD DVD titles] into the marketplace."

Last month, Warner pushed back its original March 28 HD DVD launch due to production glitches.

Originally expected March 28, HD DVD title Chronos from supplier Goldhil Entertainment has been benched due to production quality concerns. A new street date hasn’t been set.

Universal Studios Home Entertainment debuted sci-fi cult fave Serenity to positive initial reports from retailers, USHE president Craig Kornblau said. However, the launch wasn’t without problems--a Los Angeles Best Buy location and a Circuit City store didn’t expect to get Serenity discs until later in the week, nor did New England specialty retailer Newbury Comics.

“This would be amusing if I wasn’t so scared that this is the way that [HD DVD] is going to be rolled out” said Newbury buyer Ian Leshin. “They’re saying, ‘It’s coming, it’s coming! But oops, see if you can find it.’”

Newbury was expecting about 20 copies of Serenity. But by 5 p.m. Tuesday, Leshin hadn’t received the shipment.

Target’s Web site listed Serenity as out of stock Tuesday.

Neither Toshiba nor the studios have given initial shipment numbers, but it’s estimated that Toshiba shipped 10,000 to 15,000 players while Warner and Universal are shipping about 10,000 copies of each of their initial releases, according to studio and distribution sources.

By the end of the week, Toshiba’s players should be stocked in about 800 Best Buy stores, 500 Wal-Mart stores, 600 Sears locations and other regional retailers for a total reach of 3,000 stores, Sally said.

Warner films will mostly be available at retailers carrying players, but Universal has allowed rental and specialty retailers to carry its HD DVD titles in addition to retailers selling players. Online rentailer Netflix shipped more than 100 copies of Serenity to subscribers.

At least one Best Buy in Glendale, Calif., and New York sold out of initial Toshiba player stock by Tuesday.

Universal created HD DVD kiosks for retailers that combine players, movies and a display of how they all work for consumers.

Users must have an HD TV and an HD DVD player to watch HD DVD movies. HD DVD players also will play standard DVDs, however standard DVD players won’t play HD DVDs.

Universal showed off its first HD DVD releases to press on Tuesday and talked up interactive features the studio is planning for upcoming titles.

Universal plans to begin releasing new films day and date on HD DVD this fall. The studio also plans to release hybrid discs, which will have an HD DVD version of the movie on one side and a standard DVD version on the other side. That would allow people to play the films in a standard DVD player or HD DVD player.

Among the examples of new features the studio is considering are, for example, allowing a user to connect to the Internet and trick out a car and then insert that car back into the film so the movie would include their creation.

One of the studio’s first day and date releases is likely to be Fast and the Furious 3 by the end of this year, and the studio is already working on new types of extras for it, though executives wouldn’t say if the custom car example would be one of the features.

Kornblau called DVD bonus features “yesterday” and said HD DVD will change how consumers watch movies by allowing them to personalize objects in the film and connect online with friends to share opinions while watching the film—and, he emphasized, it will do it by the end of this year.

“The next phase will be a more robust personal interactive experience,” Kornblau said.

That connectivity also could open up new promotional opportunities for studios, which could allow users to click on a car or pair of shoes or any other item on the screen and connect online to a Web site for more information and to make purchases.

But that’s all later; the first four releases include interactive menus that allow users to continue watching the movie while switching formats or languages but no other new interactive features.

More interactive supplements will be available on May releases The Bourne Supremacy from Universal and Dukes of Hazard, Batman Begins and Constantine from Warner.

This week, Toshiba began running a print and TV advertising campaign themed “So Real You Can Feel It.”

Retailers were hyping Toshiba players and HD DVD software over the weekend. In Sunday’s newspaper circulars, Best Buy notified shoppers that they would receive a $25 chain gift card after purchasing a Toshiba player and all three Warner HD DVD titles.

The missing Million Dollar Baby tripped up Best Buy’s current advertised deal. An electronics section employee at the L.A. Best Buy was offering rain checks on the promotion Tuesday.

Best Buy had players and movies grouped together in a kiosk at the front of the electronics section.

Circuit City, which isn’t carrying players, had HD DVD movies in a kiosk in its TV section but wasn’t promoting them.

As of Monday, Serenity was Amazon.com’s top April 18 HD DVD title, landing at No. 321 overall. Samurai was slotted at No. 802; Phantom, No. 1,524; and Million Dollar Baby, No. 3,708. Universal will release Doom and Apollo 13 next week, followed by more films in May.

Universal has widened its initial HD DVD selection. Amazon.com and Target.com, among other retailers, are accepting pre-orders for May 9 releases Cinderella Man, Jarhead and Assault on Precinct 13. The Chronicles of Riddick, The Bourne Supremacy and Van Helsing are due to roll out May 23.