HD DVD shrugs off Blockbuster move

Written by Tim Smalley

June 21, 2007 // 4:19 p.m.

Tags: #blockbuster #blu-ray #group #hd-dvd #move #off #promotional #shrugs #sony #studios #universal

During a briefing with UK press in London yesterday, Ken Graffeo, executive vice president of High Definition Strategic Marketing for Universal Studios and co-president of the HD DVD Promotional Group, shrugged off Blockbuster’s move to expand Blu-ray to 1450 new stores in America.

Graffeo pointed out that rental counted for less than one percent of its revenue and brushed it off as an insignificant event in the format war.

Ken cited the fact that HD DVD is still being offered in the original 250 stores and through Blockbuster’s online rental service. He claims that those 250 stores are stores where there are large numbers of early adopters and the latter, he believes, is Blockbuster’s major growth market.

Thus, he is not fazed by Blockbuster’s decision. In fact, we’d go so far as to say that this is potentially a bigger win for Blu-ray than it is a loss for HD DVD, based on the figures he’s given to us.

He remained adamant that HD DVD was on top at the moment and claimed that dedicated HD DVD set top boxes are outselling Blu-ray set top boxes at a rate of three to one in the US. In the last six weeks, the Promotional Group has sold over 50,000 HD DVD set top boxes on promotion in the US, proving that once the price is right, consumers will buy into the technology.

Of course, these figures Ken gave us discount the PS3’s sales figures, which has sold over one million units in the States. Interestingly though, Graffeo claimed that only 30 percent of PS3s in the US are connected to an HDTV.

This was an attempt at playing down the fact that the PlayStation 3 is primarily not a Blu-ray player. To further press this point home though, he highlighted the fact that if you include the PS3 sales in Sony’s Blu-ray sales figures, Blu-ray customers are only buying an average of one Blu-ray title per player, while HD DVD owners are buying around four titles per player.

Whichever way you look at it, the numbers are so inadequate, especially when you consider the fact that there are over 90 million US households with DVD players and the market is worth around $26 billion a year. It is definitely early days now and the war looks like it is going to continue for quite some time.

Graffeo is confident that HD DVD will win the war because its players are getting close to that critical point of affordability, and there's also the fact that the HD DVD specification was finalised before any player was released, meaning that even the first-generation players can access all of the features in discs being released tomorrow. On the other hand, Blu-ray's specifications still aren't finalised, meaning that current players will not be able to access new additions to the specification.

Got a thought on Graffeo’s somewhat interesting statements? Share it with us in the forums.

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