High Def Won't Take Off in 2006, Say Retailers

Posted Thu Jul 13, 2006 at 02:03 PM PDT by
Woman Making Sales Chart From VSDA: Despite encouraging early sales for HD DVD and Blu-ray and robust studio support expected in the fourth quarter, retailers are predicting the next-gen high-def formats won't take off until 2007.

That's the general buzz coming out of this year's Video Software Dealers Association convention, which winds down at the end of this week in Las Vegas. According to Video Business, an informal survey of attending retailer representatives found most are optimistic on high-def's long-term prospects but still guarded in their sales predictions for 2006.

"We are in high-tech central, and we aren't buying [inventory for our store] yet,” said Brian Dunleavy, co-owner of San Francisco's Noe Valley Video. "We haven’t had one [of our store's customers] ask about it. I just don't think the average consumer wants to deal with this, because they feel like they just switched over to DVD [from VHS]. It's going to be a good year and a half out before this gets going."

However, HD DVD and Blu-ray supporting studios including Warner, Universal, Sony and Fox showed off demos of the technologies to eager attendees. As many as 400 to 500 people daily are estimated to have visited the displays, which included the latest in next-gen high-def hardware and software.

"The retailers here are very important to us," said Rich Marty, Sony VP of new business development. "Some of them are getting their first look at [Blu-ray], and we want them to get educated. Once they see the picture, it speaks to the format, [and retailers] will see it's the right thing to do."

The studio demos at VSDA were preceded by the announcement Monday from HD DVD backers of a $150 million marketing campaign designed to increase consumer awareness of the format, as well as Warner unveiling plans for an aggressive slate of A-list titles to debut in time for the fourth quarter, including the latest in the 'Harry Potter' and 'Batman' franchises.

Still, retailers remain cautious about market reaction to high-def this early in the game.

"Inevitably, this all [HD DVD and Blu-ray] is the future of home entertainment, but it won't be the saving grace in 2006," Virgin buyer Chris Anstey predicted to VB.
Tags: Industry Forecasts (all tags)