Stores start market for used high-def discs

Previously viewed titles typically sell for $5 less than new versions

By Susanne Ault -- Video Business, 11/22/2006

NOV. 22 | The formats are less than 1 year old, but several retailers are already selling used HD DVD and Blu-ray Disc titles in stores.

Hastings Entertainment, Newbury Comics and Trans World brands F.Y.E. and Suncoast are among the outlets that have been accepting consumers’ used HD DVD and Blu-ray titles since the formats launched in the spring. In turn, the chains are stocking the high-definition titles, which have included copies of Universal Studios Home Entertainment’s Serenity and Doom on HD DVD, for sale within their used DVD sections.

Also, at Amazon.com, many new Blu-ray and HD DVD titles are offered alongside used counterparts from the site’s third-party sellers.

As used DVD sales make up such a significant portion of these retailers’ businesses, the retailers deemed it a natural evolution to accept customers’ HD DVD and Blu-ray titles for cash or trade-in credit. At Hastings and Trans World, used DVD sales represent 20% to 25% of total DVD revenue.

Newbury “is 40% used and 60% new product,” said the company’s DVD buyer Ian Leshin. “We have always done really well with used CDs and did offer used DVDs in the first year.”

The chain is currently stocking one or two used high-def titles per store, “but as the market expands, we will see more of this come through,” Leshin said.

Across retailers, used high-def titles are trickling in and typically number only a handful of copies per store. Pricing ranges, but a used HD DVD or Blu-ray title will generally command about $5 less than a new version.

In an unusual situation during the week of Nov. 20, an Amazon.com third party was selling a used copy of Warner Home Video’s Training Day on Blu-ray for $3.99. At that time, Universal’s Happy Gilmore was the cheapest used HD DVD offering from Amazon at $10.96.

“The amount we are buying back is really small compared to DVD,” Hastings video category manager Mason Goodfellow said. “And I think it’s going to be small for quite some time.”

Warner and Sony Pictures Home Entertainment were among the high-def suppliers who declined comment. Although the influx of cheaper used offerings can boost store bottom lines, used product does not generate any additional revenue for studios.

However, sources indicate that there is little fear that high-def formats will be negatively impacted by used product in the market. With hardware costs upward of $1,000 per unit, high-def early adopters are unlikely to be swayed by attractive pricing on used titles.

Also, many of the industry’s dominant retailers of DVD and high-def titles, including Best Buy, Wal-Mart and Target, do not offer any used product.

“The consumer who buys a $500 or $1,000 [high-def] machine is not your used car owner,” said one source. “Early adopters want to collect things. This is not going to move the needle in any way shape of form” in terms of the high-def market.

Retailers, however, said customers have various reasons for quickly trading in the new format titles. Among them, retailers believe certain of the first high-def titles lacked the necessary pizzazz to make them home library keepers.