OPINION: Battle of PR

By Paul Sweeting -- Video Business, 7/27/2007

On Tuesday, Sony trumpeted the “news” that its BDP-S300 Blu-ray player would be the only stand-alone high-def player for sale in Target stores this fourth quarter—a development that surely had a price tag attached for Sony.

On Thursday, Video Business reported that BJ’s Wholesale Club would drop HD DVD entirely from its 170 stores and feature Blu-ray exclusively in the fourth quarter, a move that also no doubt involves certain promotional commitments from the Blu-ray companies.

The Target and BJ’s moves follow closely on the heels of an announcement by Blockbuster that the rental chain will confine its in-store high-def inventory to Blu-ray, at least until further notice, while consigning HD DVD to its online rental service.

Given how few players of either format there are out there to support a disc rental business, it’s a fair bet that Blockbuster’s inventory risk on its Blu-ray selection has been ameliorated.

Similar retail announcements are no doubt still to come.

Securing premium positioning in retail in exchange for promotional support is, of course, an entirely legitimate and widely followed practice in all consumer-goods businesses.

What distinguishes the Blu-ray group’s recent efforts is that they all involved some degree of exclusivity.

If you’re paying for format exclusivity, you’re in a format war—even if your No. 1 talking point is that the war is over.

IRONICALLY, FOR A group that claims there’s no format war, the Blu-ray media strategy has been very effective at leveraging the media’s perception that there is a format war.

By announcing the Target deal itself—notably with no quote from the retailer—Sony generated a couple days of headlines calling the move “another nail in the HD DVD coffin” and “another format win ” for Blu-ray.

It later fell to Target to put out a statement, which almost no one picked up, noting that the chain is not “proclaiming one format vs. the other as the preferred consumer technology, and software will continue to be available to our guests in both the Blu-ray and HD DVD format.”

Universal Studios Home Entertainment exec VP Ken Graffeo followed on behalf of the HD DVD Promotion Group, noting that, “Sony appears to have bought an end cap, just as HD DVD has in retail stores such as Best Buy and Circuit City.”

That one didn’t get picked up much, either.

The Blu-ray group made similarly effective use of the Blockbuster announcement, which also played as a major victory for the format, even though the rental market is an insignificant factor in the high-def business at this point and is likely to have little impact on which format ultimately prevails.

Knowing how the news business works, I can tell you, “Target promotes Blu-ray” ain’t much of a story without the format war as predicate.

AS USUAL, Toshiba’s response to the Blu-ray PR and marketing blitz has been … well, there really hasn’t been one.

Once again, it let Microsoft do most of its fighting for it, by announcing a $20 price cut on the HD DVD add-on for the Xbox 360, along with three free movies.

With only one exclusive studio and no other hardware partners, HD DVD is completely outgunned on the marketing front.

Even where it scores a victory, as with Circuit City, it somehow manages to get very little promotional bang for its buck.

“What’s important is that stand-alone HD DVD players are still much more affordable than Blu-ray players, plus they offer a better experience—just compare titles appearing in both formats like 300 or Blood Diamond,” Graffeo said. “Ultimately, consumers will be the ones that determine what format provides the greatest value.”

Toshiba had better hope he’s right.

Paul Sweeting is editor of Content Agenda. Get more of Sweeting's analysis here.