Target shelves in favor of Blu-ray

About twice as many BD titles than HD DVD in stores

By Susanne Ault -- Video Business, 9/14/2007

SEPT. 14 | Target is shifting the balance of its high-definition software merchandising toward Blu-ray Disc, now devoting twice the amount of display space to that format than it does to HD DVD in some or all of its stores.

When the chain first launched a high-def section within its new release DVD wall last year, display space for Blu-ray and HD DVD discs was equal. At a number of Los Angeles stores, there were 12 designated title slots, aligned along two vertical rows, for each format.

But in the last several weeks, various industry sources have noted Target doubling the room for Blu-ray titles, while keeping shelving for HD DVD titles the same. At three Los Angeles and two Orange County, Calif., locations, Target had space for 24 Blu-ray titles along four vertical rows and 12 HD DVD titles along two vertical rows. At one Philadelphia-area Target, there appeared to be four times the room committed to Blu-ray than there was to HD DVD software.

In October, Target will begin offering Sony’s $499 Blu-ray player as its sole high-def set-top product in stores and has been expected to give Blu-ray software priority merchandising with the players.

Like those at other large retail chains, Target execs have long expressed their desire to sell only one format, according to sources, and titles in the Blu-ray format are currently outselling HD DVD copies at a two-to-one clip.

That may change in the fourth quarter, however, since Paramount Home Entertainment and DreamWorks Animation’s move to exclusively produce titles such as Transformers and Shrek the Third on HD DVD.

But regardless of the reasoning, Target’s fatter Blu-ray inventory will impact the format war, believes Andy Parsons, chair of the promotion committee for the Blu-ray Disc Assn. U.S.

“You’re going to get a clear message when you see more Blu-ray than HD DVD, and you’re going to think something is up,” said Parsons. “The message to the consumer is that one of these [formats] is dominating. You’ll go with the masses and pick titles from the one that is likely to win.”

Target officials had no comment.

By offering fewer than 50 titles of Blu-ray and HD DVD each, Target is largely still testing the high-def software waters. Other retailers, including Amazon.com, are selling virtually all available Blu-ray and HD DVD product, roughly numbering about 600 titles overall.

“For a retailer to make a decision on shelving, it’s a very flexible decision,” said Alan Bell, chief technology officer and executive VP at Paramount Pictures. “The most notable observation is that it’s 24 versus 12—[Target] is mostly standing back, as consumers still are to some degree” on adopting high-definition.

Regarding Paramount’s decision to back HD DVD only after about a year of producing in both formats, Bell explained that supporting both was becoming too expensive.

Paramount opted to exclusively back HD DVD because its current hardware offers more features than current Blu-ray hardware, he said. Since last year, all HD DVD players boast Web connectivity. To date, no Blu-ray set-top player can offer that same advanced interactivity, and going forward, Web connectivity will remain optional for Blu-ray manufacturers to include in players.

Bell also noted that the studio was suffering through more production glitches with Blu-ray authoring than with HD DVD authoring.

“Retail might be shifting inventory around, but at some point, there could be diminishing returns” as the format war evolves further, said Bell. “I think HD DVD has the goods.”