Business | Technology
Aggressive price cuts revive HD DVD sales
Format continues to be supported by Amazon and Buy.com even after Sony won high-definition war.
- By Matthew Garrahan, Financial Times
- Published: 23:41 October 3, 2008
Los Angeles: It may have lost the home entertainment war to Sony's Blu-ray technology but tougher econ-omic conditions have breathed new life into Toshiba's HD DVD format.
Sony delivered what appeared to be a knock-out blow to HD DVD in the spring when it secured backing from the biggest Hollywood studios, which then dropped their support of the Toshiba technology. But aggressive price cuts have maintained the market for HD DVD players, which also play standard DVDs.
The cost of discs has fallen from $40 in some cases to as little as $10, while players can be picked up for less than $60, compared with about $250 for a Blu-ray player. Thousands of HD DVD titles continue to be available, including relatively recent blockbusters, such as AmericanGangsterBeowulf.
This has maintained demand for the format, which continues to be supported by online retailers, such as Amazon and Buy.com, smaller electronics chains and second-handstores.
"We expected to see a huge increase in Blu-ray sales and HD DVD dying [when Blu-ray won the format war] but it just has not happened," said Jeff Wisot, vice-president of marketing with Buy.com, an online retailer. "HD DVD sales are still very strong."
Ryan Kugler, president of Distribution Video & Audio, the largest buyer of excess video and audio inventory, has bought millions of unsold HD DVDs that were returned to the studios by big retailers. He has resold more than one million units to online retailers and discount stores and expects to sell another two to three million in the run-up to Christmas. "Cheap entertainment always does well in a recession or depression," he said.
With Hollywood studios no longer releasing new titles on HD DVD, retailers know that the format has a limited shelf-life.
"There's a much more limited selection of titles [than with Blu-ray] because there wasn't the same level of studio support for HD DVD," said Andy Parsons, chairman of the Blu-ray Disc Association.
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