Netflix Drops HD DVD, Backs Blu-ray
It's been just over a month since Warner Brothers threw its weight behind Blu-ray Disc, and watching the high-def format war has been much like watching dominoes fall, all in quick succession.
The momentum behind Blu-ray just continues to grow. The latest blow strikes HD DVD: Netflix has announced that it won't be carrying new HD DVD titles. The movie rental service says it will stock Blu-ray discs instead of HD DVD titles (existing titles already in inventory will be phased out by the end of year).
According to Netflix, "a majority" of its subscribers that requested high-def titles picked Blu-ray, not HD DVD. Netflix's decision echoes Blockbuster's choice last year to support Blu-ray over HD DVD in its stores. The company also cites growing industry support for one format--Blu-ray--and notes how supporting one format going forward will help provide better experiences for consumers. (That latter point, of course, only applies if you're not among the consumers who already invested in HD DVD.)
The Netflix announcement comes just a week after Toshiba's splashy $2.5 million Super Bowl ad supporting HD DVD. Neither Toshiba nor Microsoft have pulled the proverbial plug on the format, but news like this can't be encouraging to HD DVD's backers.
More to the point, news like this will not be well received by the two major studios that remain part of the HD DVD camp--Paramount Home Entertainment (including Dreamworks Animation) and Universal Studios. If outlets like Netflix stop carrying their films, that's lost revenue to the studios. Studios who have shareholders to account to. I imagine both companies have contractual obligations to stay with HD DVD. Paramount--which switched to HD DVD last summer--reportedly has an escape clause that could be triggered by the changing tide in the format war. Some insiders thought the Warner deal might trigger it, but Paramount came out swinging for HD DVD immediately after that announcement. Still, the Netflix announcement does make me wonder what it will take for Paramount to break free of HD DVD: Will it be the cumulative effect of the pro-Blu-ray announcements, or will the company just bide its time until the end of the year, when--if insider rumor mills are to be believed--the contract would run out?
In one way, perhaps waiting would be smart move for Paramount--if the company were to quietly ready a deluge of titles for release on Blu-ray when the time was right. Thus far, Paramount has not been, shall we say, at the forefront of the high-def release schedule: Amazon.com lists just 43 HD DVD releases from Paramount, while Universal has more than three times that number of releases. What better way to show commitment to the next generation than to jump in with both feet?
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With current sales 3:1 in favor of Blu-ray and likely to jump now with the Netflix announcement, not publishing in Blu-ray is a plainly poor business decision. Investors would definitely be up in arms.
Netflix made a great decision!! HD-DVD is clearly the dead format, why should they continue wasting money on it?