Retailers try mainstream promotion of high-def
Stores support both formats to capitalize on sales
By Susanne Ault and Jennifer Netherby -- Video Business, 7/6/2007
JULY 6 | Retailers are going mainstream with their marketing and merchandising efforts for high-definition discs as the number of titles released across the HD DVD and Blu-ray Disc formats approaches 1,000.
Amazon.com, Best Buy, Trans World, Virgin Megastores and others are promoting both formats, unwilling to potentially snub a portion of their early adopter consumers.
“Our feeling is that we should continue to supply both until the customers tell us that we shouldn’t,” said Jim Litwak, president and chief operating officer at Trans World. “Blu-ray is outperforming HD DVD in stores, but the customer is still telling us they want HD DVD.”
Trans World has doubled the amount of committed BD and HD DVD footage at its outlets since the first of the year and has moved titles to a more prominent area within DVD sections.
To accommodate this increasingly crowded category—which includes 735 current and expected BD and HD DVD titles, according to DVDEmpire.com—retailers are devoting more floor space and promotional punch to the products.
“For the first five months [of the year], all software advertising was done in association with hardware,” said Steve Nickerson, senior VP of marketing management at Warner Home Video. “But since that time, there has been a little more software-only advertising. Best Buy, Circuit City, Target and Fry’s—it's becoming a big enough install base for hardware for them to come out with each week’s new [high-def] software releases. [Retailers] can start advertising software separately.”
During the first week of July, Target delivered some of its first circular advertising that specifically promoted high-def titles, singling out three Walt Disney Studios Home Entertainment BD titles and three Warner HD DVD titles.
In June, Newbury Comics started sending its first DVD-only e-mail blasts, which include information and coupons on high-def titles.
Its next e-mail will feature a Disney-sponsored coupon, with which shoppers will receive 10% off all Newbury Blu-ray titles. This will represent the first time Newbury has launched a format-specific sale. It has presented a couple of overall high-def sales so far this year.
“During the week the coupon is run, we expect to sell a couple hundred copies of titles,” said Ian Leshin, buyer at the 27-store Newbury chain. “Disney is helping push the format, and we definitely appreciate it.”
However, he says Newbury is “very supportive of both formats. We get in pretty much all of the new releases.”
Virgin is working with high-def backers from both camps to set up high-def demo areas in time for the fourth quarter.
“We have been talking to both parties about stepping up the profile of both formats in store,” said Bart Saunt, Virgin divisional merchandise manager. “They have both come to the table, and neither of them has talked to us about excluding one over the other.”
He added, “Right now, we just rack out the [high-def] merchandise, there are no LCD or plasma screens showing off the quality. We are in discussions to show all that off better.”
Similar to other retailers, Virgin is selling BD high-def titles at a two-to-one clip over HD DVD. At its Times Square, New York, location, Virgin has dedicated twice the space to BD that it does to HD DVD.
But starting to exclude one format now risks “infuriating consumers,” said Saunt. “You might get burned, and retail bears the brunt of it.”
Noting Blu-ray’s emerging sales dominance in 2007, Hastings Entertainment CEO John Marmaduke says the specialty chain is leaning toward solely supporting the format.
This follows Blockbuster’s recent decision to rollout only Blu-ray titles in 1,450 bricks-and-mortar outlets.
“Blu-ray looks to be clearly the winner,” Marmaduke said. “We’re not optimistic [about sales] until there’s one format. I think it could happen by first quarter of 2008.”
