The high-definition format of DVD faces challenges from old and new delivery methods: standard DVD and growing online offerings.
If retailers don't support high-definition movies on disc, the industry stands the chance of allowing the consumers to gravitate away from packaged goods toward video-on-demand services, said Mark Fisher, vice president, membership and strategic initiatives, Entertainment Merchants Association, Encino, Calif. This trend has gained some momentum while the industry squabbled over the new format, observers said.
For example, big online players like Netflix, Apple and Amazon are pushing movie download initiatives, as is Blockbuster. Last week, Apple announced a new rental offering using its iTunes service.
Even so, for the time being, “no one should take their eyes off the ball. Standard DVD is still a better than $20 billion business and can't be ignored,” Fisher said.
Bill Bryant, vice president of sales, Ingram Entertainment, agreed. “Standard DVD is still the primary platform for entertainment in the supermarket class of trade. Some supermarkets are experimenting with HD DVD and Blu-ray, but most are waiting for hardware penetration to increase.”
At Bashas', Chandler, Ariz., Ray Wolsieffer, video specialist, said one reason he hasn't started carrying high-def discs is because “rental and sell-through for full-screen and wide-screen DVDs are going well.”
At B&R Stores, Lincoln, Neb., “We went hard into catalog DVD sell-through last year, and it did well for us,” said Bob Gettner, video buyer/coordinator.
“Most software sales [for high-definition technology] take place where the hardware is sold,” Bryant said, making it too early for supermarkets to invest full force in either format.
The final high-def verdict still lies with the studios, he said. “Warner's decision to go exclusively with Blu-ray is certainly influential, but it is also essential for all studios to agree on one format. Consumers will then be much more likely to embrace a new format.”