Retailers Criticize High-Def Launch; HD DVD Enjoys Early Sales Lead

Posted Thu Aug 17, 2006 at 01:44 PM PDT by
HD DVD versus Blu-ray [Illustration] While Blu-ray and HD DVD duke it out for market supremacy, retailers took the backers of both formats to task for weak early sales during a discussion Tuesday at the annual DisplaySearch HDTV conference.

Most of the panel of traditional storefront retailers called the Blu-ray and HD DVD launch a "disappointment," citing limited hardware availability and technological glitches as the key culprits, and placing the blame squarely at the feet of the manufacturers and studios behind the next-gen formats.

"Everything was too rushed," said David Workman, executive director of the retailer organization Pro Buying Group. "It was almost a race to string the tightest noose and, unfortunately, we are left as retailers to take consumers and guide them through this land mine and hopefully no one’s feet will get blown off."

"This whole high-def DVD launch is probably the worst execution of a new technology," he added.

Retailers also criticized the quality of software, with many expressing difficulty in being able to properly market and advertise both formats to their customers.

"We opened up five titles and salespeople said, How are we going to demo this? What are we going to talk about for two hours?’" said Jim Pearse, SVP of merchandising for Ultimate Electronics. "Right now, the expectations are higher than what we are delivering."

However, online merchants expressed more upbeat reactions. "It's actually been a pretty good introduction in terms of our presales," said Noah Herschman, director of audio/video for "We're one of the largest DVD sellers in the world... and we've got [customers] who really love movies saying we want to buy this [Blu-ray and HD DVD]."

Research firm The NPD Group also released early tracking data of the HD DVD and Blu-ray launches at the conference, and the numbers, while encouraging considering both are new formats, still indicate that neither has made any major inroads into the mass consumer market.

Comparing both formats' first six weeks of availability, HD DVD player sales, which launched in April, outsold Blu-ray players, which launched in June, by 33 percent.

However, the report also compared the sales performance during a six-week period ending July 29, during which both formats were in stores. Based on that time frame, Blu-ray led the next-generation market with a 54 percent share of hardware units sold and a 69 percent revenue share, according to NPD data.

Still, despite the horse race between the two formats during that six week snapshot, high-definition disc players made up a scant 0.4 percent of overall hardware units sold and 3.6 percent of total consumer electronics revenue -- a miniscule number compared to standard-definition DVD players, which made up 86.2 percent of unit sales and 65.6 percent of revenue.

The battle is only beginning...

Tags: Industry Forecasts (all tags)