Solid bow for Blu-ray

First-week sales are ‘encouraging,’ says Sony

By Jennifer Netherby and Susanne Ault -- Video Business, 6/30/2006

JUNE 30 | Suppliers and retailers called first-week sales of Blu-ray movies encouraging, with Sony Pictures Home Entertainment reporting it sold through 15% to 20% of its initial shipment of titles.

Hardware sales reports, meanwhile, were more mixed.

Ben Feingold, worldwide president of SPHE, was cautiously optimistic about the studio’s Blu-ray launch, which included XXX, House of Flying Daggers, Underworld: Evolution, 50 First Dates and Hitch. The studio shipped around 15,000 units of each title.

“I think we’re encouraged,” Feingold said. “The only issue is hardware supply. In terms of our national accounts, where there’s hardware, the results are encouraging.”

Feingold said the studio is “reformatting” its Blu-ray slate now that Sony Electronics has delayed the release of its Blu-ray player until October. Going forward, the studio plans to release its movies on Blu-ray day and date with the DVD release, which Feingold said should drive sales.

Lionsgate was the only other Blu-ray studio to release movies on the format. Without giving specific numbers, president Steve Beeks called initial results “small but heartening.” The studio shipped between 7,000 and 10,000 units of its first releases of Crash, Terminator and Saw, among others.

Retailers reported mixed results of the first Blu-ray players to hit the market last week from Samsung, with many seeing more brisk software than hardware sales on the format.

Although high-end electronics retailers Tweeter, Abt Electronics and Value Electronics didn’t sell out of their initial stock, at least one Los Angeles-area Best Buy was sold out with no word on when more players were coming. In contrast, initial Toshiba HD DVD player supply at Abt, among other retailers, was wiped out within days due to numerous pre-orders.

Samsung didn’t return calls to comment on initial sales of the BD-P1000 players, which officially launched June 25 but were on sale at many retailers before that.

Retailers speculated that brisk software sales paired with slower hardware sales meant that people were stocking up on titles in anticipation of upcoming players. Blu-ray software can be viewed only on Blu-ray players, such as Samsung’s unit out last week.

The cheapest and most high-profile slated Blu-ray player, the $499 and $599 PlayStation 3 models, will not street until fourth quarter. Both Sony’s and Pioneer’s Blu-ray players are coming this fall as well. Sony’s unit will match Samsung’s $999 pricing. Pioneer’s model is set at $1,300.

“I think some people are waiting for some of the other brands,” said Frank Roshinski, Tweeter VP and general merchandising manager for video. “We ordered the same quantities [as Toshiba HD DVD hardware], about 500 pieces [for the chain]. We didn’t sell out, but it’s still a good seller.”

Meanwhile certain retailers, including DVDEmpire.com, have already sold through initial orders of Blu-ray titles Terminator and Terminator 2: Judgment Day thanks to pre-orders and sales since their June 20 launch.

DVDEmpire.com managers said the swift sell-off was unexpected, as much of the compatible hardware rolls out later this year.

“I feel that many [title buyers] don’t have players yet,” DVDEmpire.com editorial director Shannon Nutt said. “But they’re anticipating that they are going to get PlayStation 3, so they want to have movies now.”

Added Mike Barry, the site’s director of business development, “God knows what fourth quarter is going to be like for [Blu-ray product] stock.”

At Value Electronics, which specializes in selling HDTVs in its Scarsdale, N.Y., store and online, initial Blu-ray player sales have been slow, president Robert Zohn said. Of the 12 Samsung players in stock, Zohn has sold only two.

On the other hand, he can’t keep HD DVD in stock. “HD DVD players are selling even better now given the poor reviews” of Blu-ray, Zohn said, adding, “We’re well-known for HD DVD.”

The Samsung Blu-ray players took a beating in some of the first tech reviews out, with some complaining of muddy picture and poor upconversion on standard DVD movies. Samsung also warns in its user guide that some Blu-ray discs, DVDs and CDs might not play on the players “because disc formats may evolve, and problems and errors can occur during the creation of BD, DVD and CD software and/or the manufacture of discs.”

On the other hand, HD DVD, which also was criticized for glitches such as long load times, is continuing to sell out. Zohn said he has taken 3,000 orders for HD DVD players since April, but has so far delivered only 700 players due to tight Toshiba supplies.

Zohn said he has been getting shipments of 100 or so players every other week, but it hasn’t been enough to meet demand, most of which is from the retailer’s online store. Many orders have subsequently been cancelled as consumers find players at other stores or change their minds.

“Toshiba’s being as fair as they can be,” Zohn said. “I wish I had more, and I think they do too.”

In-store, Value has been packaging HD DVD players with HDTV sales, selling 10 or so players in store every other week or so, Zohn said.