No high-def shelf squeeze

Retailers stock limited amount of HD DVD, Blu-ray titles

By Susanne Ault -- Video Business, 9/22/2006

SEPT. 22 | The fourth quarter will represent the first real marketing push for high-definition discs, but retailers are expecting it to have little impact on shelf space in stores.

Retail shelves will be as full as usual during the quarter, with a steady stream of summer’s theatrical hits, including X-Men: The Last Stand, Over the Hedge, Mission: Impossible III, Cars, The Da Vinci Code, Ice Age: The Meltdown, Superman Returns and Pirates of the Caribbean: Dead Man’s Chest. But the fact that some of these films, plus many catalog titles, will be available in HD DVD or Blu-ray Disc in addition to standard DVD and possibly UMD won’t have much impact, retailers said.

Because the new high-def formats are just ramping up, consumer demand is still small and hence, the additional units won’t have a very large footprint at retail this year.

“Two years from now, if there are still these three formats, you might have something to talk about” with crowding, said one wholesaler. “But customers aren’t pouring in asking for high-def content yet.”

When ordering HD DVD and/or Blu-ray title versions, retailers will take in less than 5% of the title’s standard-definition copies in the new formats, say wholesaler sources.

In anticipation of consumer interest for the holidays, entertainment specialist Virgin will introduce Blu-ray and HD DVD titles in its stores on Oct. 10, and consumer electronics giant Best Buy is moving the new formats into its software sections.

“High-definition has great potential, but the format isn’t going to be huge at first, so the orders will be conservative until we see a strong customer response,” Virgin buyer Chris Anstey said. “The deeper catalog titles, unless they’re absolute classics, won’t get as much placement as the titles with a big ‘wow’ factor.” Potential among those are Warner Home Video’s Batman Begins and Paramount Home Entertainment’s M:I III.

Best Buy has started moving its high-def titles from their initial hardware displays into its film DVD aisles, said Microsoft director and HD DVD supporter Kevin Collins.

“I think that’s positive for consumers,” said Collins, believing Best Buy shoppers are more likely to head to software departments for movies in any format.

Although that merchandising shift implies future space concerns, “the drivers in the [disc] category are still DVD and CD,” said Best Buy spokesman Brian Lucas.

Blu-ray software also has been edging into certain retail circulars, including Best Buy’s Sept. 17-23 issue, hyping Buena Vista Home Entertainment’s first titles on the format.

Meanwhile, online rentailer Netflix has added the high-def formats easily, and Blockbuster offers Blu-ray and HD DVD through its online rental service, though not in its bricks-and-mortar outlets.

At specialist Newbury Comics, “we’ve been petitioning the stores to see which ones have consumer interest,” said buyer Ian Leshin, as the chain considers carrying all available high-def titles in 18 of its 26 stores. “On average, there are about two to three units per title across the chain. But we do want to have them in stock.”

One regional discounter was more dour. The chain carries HD DVD and Blu-ray in only about 15% of its stores and does not plan to replenish the titles.