Blu-Ray sales not helped by HD DVD death

New reports from ABI Research and NPD Group state that the death of HD DVD and the end to the format war has not helped Blu-Ray player sales, and that Blu-Ray is looking at an uphill battle in its efforts to entrench itself in coonsumer’s living rooms.

It’s been a couple months since HD DVD bowed out of the battle to become the next-generation DVD technology, but Blu-Ray has not been able to capitalize on being the last man standing. From January to February, Blu-Ray hardware sales fell 40 percent, excluding the Playstation 3 console. Following the HD DVD announcement in February, sales only rose two percent from February to March, according to NPD Group.

Several factors could be leading to this, but two are likely the biggest culprits: price and apathy. Player prices are still in the “premium” range in consumers minds, not yet hitting that magic $200 mark. Also, Blu-Ray disc prices still outpace standard DVDs by a substantial margin, more than 2:1 in many cases.

Many consumers still profess they can’t tell the difference between a Blu-Ray image and a standard DVD image. While this may be hard to believe, it shows the amount of work needed to show consumers what they are missing. Also not helping the cause are the cheap prices on upconverting DVD players, as low as $70 now, and consumer confusion surrounding those players. Many people think an upconverting player IS an HD player, falling in line with statistics that show that around 50 perecent of people with HDTVs aren’t getting an HD signal and don’t even know it.

ABI’s research shows that the PS3 will make up 85 perecent of the Blu-Ray hardware market in 2008, and it will maintain its majority lead until 2013, yet again solidifying the argument that the PS3 is the best Blu-Ray player currently available.

With all that said, however, it’s not surprising the adoption has been slow since the dust settled. During the high tide of the format battle, each side was cutting prices, offering incentives and inciting rabid fan bases to make purchases to help their format win. That pressure no longer exists, and the amount of incentives on Blu-Ray players has slowed.

Perhaps the biggest roadblock to Blu-Ray adoption however, is the one that is being somewhat ignored: an incomplete standard emerged at the end of the format war. Blu-Ray is in the midst of what it calls its “profiles”, with profile 2.0 being the complete spec. Profile 2.0 players are just now slowly starting to make it to market, and they are well about the prices of other Blu-Ray players currently available. The PS3 recently was updated to Profile 2.0, which allows ineractivity via BDJ as well as picture in picture, both features that HD DVD featured from the beginning, but I digress.

At this point the high definition disc party is still full of early adopters and audiophiles and videophiles, the general consumer has not entered the market yet. So for those of us who went with HD DVD, or other high-def aficionados who waited on the sideline, we’re educated enough to know that this is not the time to be buying a Blu-Ray player. That means a large portion of Blu-Ray’s target consumer knows to wait until the end of the year at the earliest to buy a new player, when prices come down – at least slightly – and Profile 2.0 players and movies dot the landscape. Until then, I see similar numbers for Blu-Ray hardware sales, excluding Sony’s PS3 which is gaining momentum in the video game market.

Other factors loom large for the future of Blu-Ray as well, with Apple announcing today that it has agreements with most of the major studios to put movies on iTunes day-and-date with their release on DVD, some in HD. This is just another push toward the eventual evolution to a physical media-less entertainment society (see Netflix and Blockbuster’s set-top-boxes), one that Blu-Ray is dreading.

The next 12 months will be huge for Blu-Ray. This Christmas season must see Blu-Ray gain serious momentum if it’s going to gain enough traction before consumers make the leap to downloading their movies, otherwise Sony might still have a new Betamax on its hands.

Xbox 360 HD DVD player and 7-10 DVDs gets you $45

Best Buy added the HD DVD player to their trade in site today, and here’s what you get for the Xbox 360 add on and 7-10 HD DVDs included, with all items in excellent condition and all original cables/manuals: $45.

Turn that 360 add on into a Toshiba HD-A3, it only adds $15 to get you $60. If you bought the Onkyo HD805, you can get $169 back. Toshiba XA2: $189. The XA2 by itself will net you $165, so it’s seems that Best Buy isn’t putting much stock in the movies you’ll be adding to your trade in. Combo players are on the list as well, with a LG BH-200 by itself bringing in $285 and the Samsung BD-UP5000$255, although judging from the reviews, some people might want to send that one packing anyhow.

Considering Best Buy is giving my $50 just for buying my Xbox add on there, I think I’ll keep my eight movies and the player and call it good.

$50 from Best Buy for HD DVD players

Wow, now this is what I call customer service. Best Buy, usually a favorite punching bag for techies, is doing its customers right by announcing a program to give a $50 gift card to anyone who bought an HD DVD player before Feb. 23, 2008, and yes the Xbox 360 add-on is included. But unlike other trade-in programs like those from Circuit City (which tripled it’s 30-day return policy to 90 days on HD DVD players) and Canda’s Future Shop ($100 toward a combo player from LG or Samsung), you get to keep your HD DVD player. Let me say that again because it bears repeating, Best Buy is giving you a $50 gift card, and allowing you to keep your player.

Here’s how the program works, according to Best Buy.com:  “Most qualifying customers will automatically receive their complimentary gift card by mail in the coming weeks. If you qualify and haven’t received yours by May 1, 2008, please call us at 1-888-BEST-BUY to verify your eligibility (have your receipt handy, if possible).” That means if you bought with a credit card or are a member of Reward Zone and used your card when you purchased, likely Best Buy already knows and you’ll be getting your gift card right around the time the stimulus package checks come from the government.

So while you likely paid $200 or more for your player, it’s not a full refund, but you can’t complain about getting $50 and being able to keep your equipment.

Also announced is that starting March 21, Best Buy will be adding HD DVD players and media to it’s BestBuyTradein.com site, allowing you to instantly see what your player and movies would be worth in trade for Best Buy gift cards. So it’s possible you could get your $50 gift card, and then unload the player and DVDs you have on the trade in site for even more gift cards.

Players eligible for the $50 gift card:

• Toshiba HD DVD player models:
  HD-A1, HD-A2, HD-A20, HD-XA2, HD-A3, HD-A30, HD-A35
• Microsoft Xbox 360 HD DVD player accessory model 9Z5-00013

Offer excludes HD DVD-equipped computers and laptops, and so-called “dual-format” or “universal” high-definition disc player models designed to play both Blu-ray Disc and HD DVD media.

Universal, Paramount going Blu

And now for the “no duh” announcements. After Toshiba ended HD DVD this morning, Paramount and Universal are going Blu. No specifics on when yet, but you can bet it will be soon. Let me save you time and tell you that Dreamworks and any other current HD DVD backer will be going Blu as well.

In a strange, sad, ironic twist, Universal sent out to its subscribers its UniversalHiDef email yesterday, touting HD DVDs from the company.

The Universal High Def site has not been changed to reflect any announcements as of yet.

Either way, it looks like if you are like me and want to get your hands on some HD DVDs before they disappear, you might want to get going on making purchases. It’s very likely that these Universal and Paramount may stop producing HD DVDs very quickly in an effort to gain sales from the amount of press being given to the end of the format war.

For you Blu-Ray people, shouldn’t be too long before you can enjoy Transformers, Shrek and many other previously exclusive HD DVDs. No word either, on Warner’s upcoming HD DVD releases that have already made it out on Blu-Ray but are in the midst of that companie’s three-week delay between Blu-Ray and HD DVD releases.

It’s over, officially

With an early morning (at least here in America) press conference in Japan, Toshiba has put an end to the next generation disc format war. The company issued a press release today stating it would “no longer develop, manufacture and market HD DVD players and recorders.”

Production will begin to wind down immediately, and Toshiba aims to be out of the business by the end of March.

“We carefully assessed the long-term impact of continuing the so-called ‘next-generation format war’ and concluded that a swift decision will best help the market develop,” said Atsutoshi Nishida, President and CEO of Toshiba Corporation. “While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Nishida went on to say at a press conference following the announcement (read a recap on Engadget HD) that Toshiba has “No plans at all” at this time to support Blu-Ray or any other optical next generation format. The company will still support standard DVD and remain a member of the DVD Forum.

The announcement completes a cycle that was really put in motion back in January with Warner Bros. announcement that it was dropping it’s dual-format stance and moving to Blu-Ray exclusivity. Other smaller studios made announcements in the wake of Warner’s, and then within the span of two days earlier this month Netflix, Best Buy and Wal Mart all announced they would be moving toward Blu-Ray exclusivity in one form or another.

HD DVD funeral tomorrow? Lunch at the fellowship hall after

This may or may not be true, but various Japanese media outlets are reporting the Toshiba will officially announce the end of HD DVD production tomorrow, signaling the end of the format just a few short days after Best Buy, Wal Mart and Netflix all went Blu Ray.

At this point its kind of like waiting to be mathematically eliminated from the playoffs when its obvious your team sucks, but it’s worth noting nonetheless.

Wal Mart latest to turn Blu Ray-only

Discount retailer Wal Mart has announced its intention to drop HD DVD starting in June according to Check Out blog, Wal Mart’s corporate blog.

This of course comes as no surprise amid the recent announcements, but it’s yet another link in the chain. Wal Mart is one of, if not the biggest seller of DVDs in the nation (not including online-only stores like Amazon) so this is another blow, but I can’t really call it a fatal blow because I think that’s already been dealt. At this point its like standing over your opponents body in Halo and continuing to fire away with the Needler.

Also, if you’re interested in some cheap HD DVD titles, head over to DeepDiscount.com where tons of HD DVD titles are reduced more than 50 percent in some cases, with a host of top-notch titles at $12.20. Hopefully for those of us who jumped in the HD DVD bandwagon this is the start of deep discounts across the board.

Amazon.com has a similar sales, offering 50 percent off 150 HD DVD titles, get ’em while you can.

Toshiba waving the white flag on HD DVD?

Rumors are flying today that not only is HD DVD’s main technology partner Toshiba prepping a Blu Ray player, but now, according to a report in the Hollywood Insider, Toshiba may be readying to wave the white flag on HD DVD entirely.

After giving the standard “we believe HD DVD is the best thing for consumers” line, Jodi Sally, Vice President of Marketing for Toshiba America Consumer Products had this to say about the Netflix and Best Buy announcements: “Given the market developments in the past month, 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.”

Certainly not a surrender, but far from a vote of confidence as well. The report also says that “reliable sources in the industry” have said that Toshiba could make the announcement to drop the format in the coming weeks.

Toshiba’s defection would indeed be the final blow. While Microsoft has not made any announcements, the tech giant would not be able to carry the format by itself with no CE company to produce players.

Other reports in recent weeks have hinted that the final remaining studios on the HD DVD side – Paramount and Universal – are ready with announcements of their own but holding on due to the fact that they either have promo deals already in place or a pile of HD DVDs on hand that they want to unload.

Now that I’ve had time to get used to it, I’m excited at the prospect of one format going forward. I’ll be even more excited if it means that retailers will be slashing prices on HD DVDs in an effort to eliminate stock. I could stand to have some $10 HD DVDs.

HD Promo group responds, says their mom can beat up your mom

In the wake of Best Buy and Netflix dealing two more crippling blows to the HD DVD format yesterday, the HD DVD Promotion Group responded with this short statement yesterday (CNET had it first, credit where credit is due):

“We have long held the belief that HD DVD is the best format for consumers based on quality and value, and with more than 1 million HD DVD players on the market, it’s unfortunate to see Netflix make the decision to only stock Blu-ray titles going forward. While the Best Buy announcement says they will recommend Blu-ray, at least they will continue to carry HD DVD and offer consumers a choice at retail.”

And while it’s hard to blame them for sounding somewhat defeated, this sounds just pathetic. “… at least they will continue to carry HD DVD…” They might as well have said “at least we’re not as ugly as you are” while running and hiding behind a playground monitor.

This looks like they’ve seen the writing on the wall and they’re just trying to figure out an exit strategy. At least after Warner bailed they came back with some fight, stating the number of players in the market favored HD DVD and vowing to determine the impact of the announcement.

Allow me, if you will, to interpret the response:

“We have long held the belief that HD DVD is the best format for consumers based on quality and value (I can’t believe we lost this war to a technology that’s more expensive and not even fully complete), and with more than 1 million HD DVD players on the market, it’s unfortunate (sucks) to see Netflix make the decision to only stock Blu-ray titles going forward (Screw-you Netflix, we hope you lose a bunch of customers today). While the Best Buy announcement says they will recommend Blu-ray, at least they will continue to carry HD DVD and offer consumers a choice at retail. (It could have been worse, I guess. And everyone knows red is better than blue anyhow so thhhbbbbbbttt… Anyone want a HD-A3 cheap?)“

Is Best Buy IS next on the Blu-only list – UPDATE

Update – It’s true, it’s all over the interwebs now.

If This report from Street Insider.com is true, it looks like Best Buy will be moving away from HD DVD starting in March.

Quoting Brian Dunn, Best Buy’s President and Chief Operating Officer, the article states that “Consumers have told us that they want us to help lead the way. We’ve listened to our customers, and we are responding. Best Buy will recommend Blu-ray as the preferred format.”

It goes on to say that: “Beginning in early March, the leading consumer electronics retailer will prominently showcase Blu-ray hardware and software products in its Best Buy retail and online channels in the United States.”

HD DVD software and equipment will still be available, but from the sounds of it you’ll find them next to the toaster ovens, blenders and other items no one really goes to Best Buy for.

Now not only will I not be able to rent HD DVDs, it’s going to be harder to buy them.