HD DVD Set To Launch Quietly

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http://www.videobusiness.com/article/CA6324750.html

HD DVD set to launch quietly
Toshiba to ship between 10,000 to 15,000 players
By Jennifer Netherby and Susanne Ault 4/13/2006

APRIL 13 | If all goes as planned, HD DVD is set for a low-key launch Tuesday with five movies out from Warner Home Video and Universal Studios Home Entertainment and players from Toshiba coming the same day or shortly after.

With small initial shipments, stores are likely to have four or five players in stock and about 10 units of HD DVD discs at launch, according to distribution and retail sources.

The studios are expected to ship between 7,000 and 10,000 copies of each of the five initial titles set for the April 18 release, according to distributors. Toshiba is expected to ship between 10,000 and 15,000 players, several thousand of which are for retail displays. Toshiba representatives didn’t return calls for comment.

Wal-Mart also has an RCA brand player listed on its Web site, although no availability date is given.

The player appears to be a re-branded version of the basic Toshiba player.

HD DVD movies mostly will be available at the select mass merchants and electronics retailers that also are selling players, including Wal-Mart, Best Buy, Tweeter, Ultimate Electronics and other regional chains. But smaller retailers won’t be completely left out.

“It’s tough to really get a bead on how this will come down, even at this late date,” Ultimate Electronics senior VP of merchandise Jim Pearse said. “We are going with the flow and can change our execution quickly.”

Toshiba reportedly kicked off a TV ad campaign on HDTV channels this week themed “So Real You Can Feel It,” according to BrandWeek. Ultimate Electronics will promote the first software titles in its April 16 circular; other retailers were tight-lipped about their promotional plans.

Universal has yet to announce or confirm it, but the studio is expected to release sci-fi cult favorite Serenity on April 18, the same day Warner debuts its first three HD DVD titles—Million Dollar Baby, The Last Samurai and The Phantom of the Opera.

On April 25, Universal will release Apollo 13 and Doom. Amazon.com is currently taking pre-orders on the titles.

Amazon is offering the Universal HD DVD movies for $23.99 each, the same price as Target.com’s video store, which is run by Amazon. Amazon lists the manufacturer’s suggested price of the discs at $34.98.

Warner has priced its titles similar to standard DVDs, at $28.99, though its HD DVD movies are selling for around $20 at Amazon.com and other online retailers.

While Warner has mostly restricted sales of its initial releases to retailers selling HD DVD players, thereby cutting out distribution and smaller retailers from the launch, Universal has a more relaxed policy. Distributors and smaller retailers have been allowed to place orders on the studio’s first three releases.

New England’s 26-store Newbury Comics will be selling Universal’s HD DVD trio throughout its chain. Since early last week, F.Y.E. has been accepting pre-orders on its Web site for the titles.

Rental specialists, including Seattle’s Scarecrow Video and about two dozen members of the National Entertainment Buying Group, also are set to offer the Universal releases.

Independent retailers are cheering Universal’s broad distribution.

“I definitely think they are being smarter,” said Newbury buyer Ian Leshin. “If you limit your market right away, you are conditioning customers to think they won’t be able to find stuff in other stores.”

Leshin expects to be able to sell Warner HD DVD titles about 90 days after their April 18 bow.

With HD DVD an untested format, many smaller retailers are conservatively ordering a few copies of each Universal title per store.

Yet Newbury, Scarecrow and others hope to avoid having to steer customers to rival retailers for their HD DVD titles. Scarecrow is prepared to buy Warner titles elsewhere, in order to have some in stock for customers.

“We’re the largest indie retailer on the West Coast, with 72,000 titles to rent, so people come to the store and expect us to have everything,” Scarecrow buyer Mark Steiner said.

Warner’s distribution strategy is “a bummer,” he adds. “I don’t get Warner’s decision. It seems unfriendly to retailers. I don’t think they’ll sell any less at Best Buy because they sell five copies of a title to me.”

Indies recognize people will need to shop at electronics chains first, as they’ll need a player for their HD DVDs. At the same time, indie retailers want to be early bird participants in a format that has been hyped as the key to growing the home entertainment business.

“To a degree, it makes sense to get the software next to where the hardware will be,” NEBG president Todd Zaganiacz said. “But at some point, to get the most exposure, you really need to get it out to all venues. That will help increase awareness and education.”

Warner hasn’t cut all rentailers out at the start. Netflix began allowing its users to add Warner HD DVD releases to their queue for shipping at launch.

Netflix sent a survey out Monday to users that had added the HD DVD rental option to their queue to assess subscriber interest in the new format. The survey quizzed users on their home entertainment setup and whether they could play HD DVDs at launch and what type of movies they expect to be available as well as what types of movies they’d like to watch on HD DVD.

Blockbuster Online also will have HD DVD movies available for rent at launch.

The company said a customer survey showed action is the genre most early high-definition disc adopters want to see in the new format, with Warner films The Matrix and Harry Potter and the Goblet of Fire the top movies they want to see. Science fiction and scenic movies were the second and third most requested genres, the rentailer found. About 55% of Blockbuster Online users have a high-definition TV but only one-third of users said they plan to purchase a high-definition player at this time.

“It’s the old beta versus VHS dilemma,” Blockbuster Online senior VP and general manager Shane Evangelist said. “There’s no way to know how long it’s going to take for the general market to decide which formats will ultimately prevail. So while this shakes out, we’re just going to listen to our customers and make sure we give them the movies they want in the format they prefer—whatever the technology.”