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6/18/2007
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Blockbuster Favors Blu-ray Movies Over HD DVD

The video-rental company left open the possibility of changing its product mix in the future, however.

Video-rental company Blockbuster on Monday said it has decided to offer movies in the Blu-ray high-definition format in 1,700 company-owned stores, while limiting rentals of slower-moving HD DVD movies to 250 stores

Blockbuster said it chose to expand its Blu-ray offerings because movie rentals in that format have "significantly" outpaced rentals in HD DVD. The company said it would continue offering Blu-ray and HD DVD movie titles through its online rental service, and at the 250 stores where it initially started offering both formats.

"We intend to meet the demands of our customers, and based on the trends we're seeing, we're expanding our Blu-ray inventory to ensure our stores reflect the right level of products," Matthew Smith, senior VP of merchandising for Blockbuster, said in a statement.

Blockbuster, however, acknowledged that it was too early to say which high-definition format would ultimately become the industry standard, and left open the possibility of changing its product mix in the future. "We will continue to closely monitor customer rental patterns both at our stores and online, so we can adjust our inventory mix accordingly and ensure that Blockbuster is offering customers the most convenient access to the movies they want, in the format they want," Smith said.

Blockbuster plans to roll out Blu-ray titles to 1,700 stores by mid-July. The company has been offering movies in both formats on select titles in 250 stories since November 2006. Following the expansion, Blockbuster would carry more than 170 titles in Blu-ray, adding more as they're released from the studios.

The decision to favor Blu-ray is a blow to HD DVD proponents and a boost to Sony and other key supporters of Blu-ray. Experts say sales and rentals of Blu-ray DVDs have been helped by Sony's inclusion of a Blu-ray disc player in the PlayStation 3 videogame console. Movies and videogames are available in the high-definition format.

Uptake in HD DVD titles, in the meantime, has been slower. In the first quarter of this year, sales of Blu-ray movie DVDs have accounted for more than 60% of the market, according to market researcher Nielsen VideoScan.

Toshiba this month slashed its sales target for HD DVD players to 1 million in North America by the end of the year, down from its earlier projection of 1.8 million units.

The battle between Blu-ray and HD DVD has often been compared to the VHS-Betamax battle that ushered in the VCR era. Sony lost with Betamax, but hopes to avoid the same fate with Blu-ray by leveraging the popularity of its PlayStation console.

Many Hollywood and consumer electronics manufacturers are taking sides in support of either Blu-ray or HD DVD. MGM, 20th Century Fox, Walt Disney Pictures, and Sony are exclusively releasing DVDs in Blu-ray, while Universal Studios is distributing only in HD DVD. Among player manufacturers, Sony, Hitachi and Philips favor Blu-ray, while Toshiba and NEC support HD DVD. Toshiba led the effort in the creation of HD DVD.

Warner and Paramount Pictures are the only two major studios that are releasing movies in both formats.

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