Retailers adjust high-def space

Some lean toward Blu-ray after Warner move

By Susanne Ault -- Video Business, 1/18/2008

JAN. 18 | Following Warner Bros. Entertainment’s decision to support Blu-ray Disc exclusively, some key retailers are adjusting how they merchandise high-definition discs.

Predicting falling demand for HD DVD as consumers learn that the industry’s leading film supplier will stop producing in the format, Trans World Entertainment, Newbury Comics, Video Buyers Group members and Hastings Entertainment are among the retailers beginning to emphasize Blu-ray.

The format war is not over, however, as 1 million HD DVD devices are in households and plenty of HD DVD titles line shelves. But there is hope among some retailers that if they proactively push leader Blu-ray, they can spur the fledgling high-def business. To date, studios and retailers have blamed format war confusion for stopping consumers from adopting high-def.

Trans World, which operates more than 800 F.Y.E. storefronts, will be giving more catalog room to BD titles than HD DVD titles. Also, in the coming months, Trans World plans to order select, key new releases on HD DVD, while continuing to take in most new BD releases.

“We are waiting to hear more about what [HD DVD] hardware manufacturers decide to do, but I think one thing we can all agree on as retailers, is that consumer confusion is leading to a delay in buying a format,” said Mark Higgins, Trans World VP of DVD, videogames and consumer electronics merchandising. “They don’t want to buy into another Betamax. As retailers, we need to simplify things for the consumers as much as we can with merchandising one format. We don’t want to be biased, but that is clearly the direction that high-def production looks to be going.”

Higgins added that Trans World can special order HD DVD titles for customers if needed.

Hastings Entertainment will continue to have HD DVD on shelves to satisfy those consumers who have bought corresponding players. But the chain is foreseeing a shift to BD in stores.

“Based on the way the playing field is shaping up, you’ll see BD with more prominence in stores,” said Victor Fuentes, VP and divisional merchandise manager at Hastings. He said it was because of “the sheer number of titles coming from the majority of studios that will be releasing titles in the format.”

Newbury will cut back some on HD DVD copy depth in anticipation of BD drawing more customers. Before Warner’s decision, Newbury was ordering about half the copy depth on HD DVD titles as on Blu-ray titles. Now, the chain will be ordering one-fourth to one-third of the copies on HD DVD that it will order on BD. Going forward, HD DVD titles are likely to be placed only at select Newbury outlets that are strong on high-def sales.

VBG president Ted Engen said he is working with distributor partner Ingram Entertainment to put together a BD introduction package for VBG members. The on-going format war has kept about half of the VBG group, roughly 600 to 800 stores, from offering either HD DVD or BD titles. The intro package, due in about 30 days, will suggest a batch of starter BD titles to launch high-def sections in stores. Marketing tools also will be included in the packages.

“After Warner’s announcement, it’s safe for [rentailers] to invest more in Blu-ray,” said Engen.

Still, there is on-going support for HD DVD.

Retailers including Best Buy, Amazon.com, DVDEmpire.com and electronics superstore Bjorn’s are all informing customers, either in-store or online, about Warner soon ending its release of new HD DVD titles, but so far, the stores are not significantly changing their merchandise mix.

“We’ve always tried to educate people about what is going on in the two camps,” Best Buy spokesman Brian Lucas said. “Obviously, [Warner going BD-only] is the latest news. The ‘blue shirts’ are up to date on the latest developments, but it would be irresponsible to tell them [the war] is over when it’s not yet.”

DVDEmpire editorial director Shannon Nutt added, “Obviously, Warner’s announcement has made us a little more cautious about how many HD DVDs we bring in, but that’s not going to stop us from stocking strong on what we feel will be solid HD DVD releases, like the upcoming Bee Movie. Although it looks like the writing may be on the wall, DVDEmpire will continue to push both formats equally until our customers show there is no longer any demand for one format or the other.”