Stores seek killer app on high-def

Bring flash first, variety of titles later, some say

By Susanne Ault -- Video Business, 7/21/2006

JULY 21 | Frustrated retailers understand there’s a chicken-and-egg aspect to launching the new high-definition DVD formats: Studios don’t want to bring out their biggest titles until HD DVD and Blu-ray Disc penetration reaches some critical mass. Yet stores feel that a “killer app” title—a Star Wars, Batman Begins, Lord of the Rings or Pirates of the Caribbean—is needed to get the fledgling formats flying.

“Someone could really take the lead by putting out a title that people really want to have,” said Shannon Nutt, editorial director for DVD Empire. “I hope the reason things are taking time is they are prepping a lot of exclusive content.”

As more studios announce high-def slates—within the past two weeks, Paramount Home Entertainment listed its HD DVD titles and Warner Home Video and Buena Vista Home Entertainment have announced their Blu-ray lineups—retailers are increasingly shaking their heads at the middling title choices and lack of attention-getting features.

“We need the best titles to really make the formats take off,” Value Electronics president Robert Zohn said.

“I don’t think the studios get it yet,” Fred Meyer buyer Randy Schaaf said. “They need to have some big titles, and when those take off, then expand the variety.”

Studios are releasing titles in a wide range of genres, from chick flicks such as Rumor Has It… (Warner) to the action-oriented Terminator films (Lionsgate and Warner) and the family-friendly Eight Below and Dinosaur (Buena Vista). And Warner, now officially generating titles in both formats, is currently cherry-picking movies expressly for the early adopter.

“This is a launch of a format, so the consumer who is buying is not the mass market consumer,” said Steve Nickerson, Warner senior VP of marketing management. “Warner is selecting titles based on who we think the early adopting consumer is. There are some [taste] tendencies. We are putting out a big range of product, from Lethal Weapon and Blazing Saddles to more recent films like Syriana and 16 Blocks.”

He also made the point that Warner and other studios are releasing their most current films on high-def in a day-and-date strategy with standard-definition versions. But the available films for July and August DVD release are traditionally weaker than the elite summer theatricals that roll onto disc in the fourth quarter.

Product development issues, due to taking extra care on exclusive bonus features, also are holding up Warner’s earlier announced blue chip HD DVD titles Batman Begins and Harry Potter and the Goblet of Fire, according to Nickerson.

In the case of Blu-ray, some studios are holding back their flashier releases until 50GB discs, with twice the capacity of current 25GB discs, are available to hold the films and extra interactive features, sources say.

Some retailers understand that with only an estimated 20,000 HD DVD players and a smaller number of Blu-ray players in households (VB, 7-11), it doesn’t make a lot of sense for studios to bow their biggest titles until penetration increases.

“There’s little reason to put out big titles with a small install base,” said Bob Webb, Ingram Entertainment executive VP of purchasing and operations. “The most you’d sell [is in the thousands].”

Nevertheless, some early adopters, like retailers, don’t seem satisfied with the overall selection available.