Best Buy to endorse Blu-ray over HD DVD

By Susanne Ault -- Video Business, 2/11/2008

FEB. 11 | Leading high-def software retailer Best Buy starting in March will endorse Blu-ray Disc as the preferred high-def format.

The retailer will give Blu-ray titles and hardware more prominence in stores and online through merchandising and signage. It also will shift most of its marketing support, including newspaper circulars, to Blu-ray said spokesman Brian Lucas.

Word of the shift came on the same day that online rental specialist Netflix said it will buy only Blu-ray titles moving forward and will phase out HD DVD this year.

Best Buy will continue to offer HD DVD hardware and software in-store and online for an undetermined amount of time. But HD DVD will take an obvious back seat to its BD counterparts, according to Best Buy management, as the chain believes it can best serve customers, and boost high-def business, by publicly endorsing one format.

“Consumers have told us that they want us to help lead the way,” said Brian Dunn, Best Buy president and chief operating officer. “We’ve listened to our customers and we are responding. Best Buy will recommend Blu-ray as the preferred format. Our decision to shine a spotlight on Blu-ray Disc players and other Blu-ray products is a strong signal to our customers that we believe Blu-ray is the right format choice for them.”

"It’s unfortunate to see a valued partner like Best Buy make the decision to push consumers toward Blu-ray," Jodi Sally, marketing VP for HD DVD camp leader Toshiba, said in an email. "We’re also aware of the NetFlix decision to only stock Blu-ray movies for rental going forward. Given these developments, Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players."

Best Buy’s BD thumbs up comes on the heels of other major votes of confidence, primarily initiated because of BD’s growing sales lead on HD DVD products. Through 2007, BD titles outsold HD DVD titles on a 2-to-1 basis. The BD-enhanced PlayStation 3 has more than doubled the combined sales of HD DVD devices.

Noting BD’s momentum, Warner Bros. Entertainment in January put in motion a plan to exit the HD DVD format and exclusively produce BD titles.

Best Buy’s Lucas says that there were a variety of factors that led Best Buy to shift its sales energy to Blu-ray. He dismissed the Netflix timing as coincidental.

“I wouldn’t say that any one thing pushed us over the top,” said Lucas. “It was an accumulation of things. We were keeping a watchful eye on customers, and they wanted us to lead the way in helping them make a decision. Looking at the numbers of titles coming out on BD, and the manufacturers making the players, we wanted to advocate a real good solution, and that is to focus on Blu-ray.”

Best Buy has long insisted that it was a mistake to sell two formats. The chain argued that the choice only confused consumers to the point where they were refusing to adopt either BD or HD DVD.

Dunn added, “Best Buy has always believed that the customer will benefit from a widely accepted single format that would offer advantages such as product compatibility and expanded content choices. Because we believe that Blu-ray is fast emerging as that single format, we have decided to focus on Blu-ray products.”

It’s unclear how in-store shelving for BD and/or HD DVD titles will immediately change. But it could turn out to be an acceleration of merchandising changes that started last year. At that time, Best Buy began granting BD titles relatively more shelf space than HD DVD titles, because of the greater number of BD titles being released during that period.

Earlier this year, in the wake of Warner’s exclusive BD support, other retailers such as Trans World Entertainment and Hastings has similarly said they will be making the format more prominent in store.

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