http://www.latimes.com/entertainment/news/la-et-vhs-tapes22-2008dec22,0,5852342.story
VHS era is winding down
The last big supplier of the tapes is ditching the format, ending the long fade-out of a product that ushered in the home theater.
By Geoff Boucher
December 22, 2008
Pop culture is finally hitting the eject button on the VHS tape, the once-ubiquitous home-video format that will finish this month as a creaky ghost of Christmas past.
After three decades of steady if unspectacular service, the spinning wheels of the home-entertainment stalwart are slowing to a halt at retail outlets. On a crisp Friday morning in October, the final truckload of VHS tapes rolled out of a Palm Harbor, Fla., warehouse run by Ryan J. Kugler, the last major supplier of the tapes.
"It's dead, this is it, this is the last Christmas, without a doubt," said Kugler, 34, a Burbank businessman. "I was the last one buying VHS and the last one selling it, and I'm done. Anything left in warehouse we'll just give away or throw away."
Dumped in a humid Florida landfill? It's an ignominious end for the innovative product that redefined film-watching in America and spawned an entire sector led by new household names like Blockbuster and West Coast Video. Those chains gave up on VHS a few years ago but not Kugler, who casually describes himself as "a bottom feeder" with a specialization in "distressed inventory."
Kugler is president and co-owner of Distribution Video Audio Inc., a company that pulls in annual revenue of $20 million with a proud nickel-and-dime approach to fading and faded pop culture. Whether it's unwanted "Speed Racer" ball caps, unsold Danielle Steel novels or unappreciated David Hasselhoff albums, Kugler's company pays pennies and sells for dimes. If the firm had a motto, it would be "Buy low, sell low."
"It's true, one man's trash is another man's gold," Kugler said. "But we are not the graveyard. I'm like a heart surgeon -- we keep things alive longer. Or maybe we're more like the convalescence home right before the graveyard."
The last major Hollywood movie to be released on VHS was "A History of Violence" in 2006. By that point major retailers such as Best Buy and Wal-Mart were already well on their way to evicting all the VHS tapes from their shelves so the valuable real estate could go to the sleeker and smaller DVDs and, in more recent seasons, the latest upstart, Blu-ray discs. Kugler ended up buying back as much VHS inventory as he could from retailers, distributors and studios; he then sold more than 4 million VHS videotapes over the last two years.
Those tapes went to bargain-basement chains such as Dollar Tree, Dollar General and Family Dollar, and Kugler's network of mom-and-pop clients and regional outlets, such as the Gabriel Bros. Stores in West Virginia or the Five Below chain in Pennsylvania. If you bought a Clint Eastwood movie at the Flying J Truck Stop in Saginaw, Mich., or a "Care Bears" tape at one of the H.E. Butts Grocery stores in Texas, Kugler's company probably put it there. He also sells to public libraries, military bases and cruise ships, although those clients now all pretty much want DVDs.
Kugler estimates that 2 million tapes are still sitting on shelves of his clients' stores across the country, but they are the last analog soldiers in the lost battle against the digital invasion. "I'm not sure a lot of people are going to miss VHS," he said, "but it's been good to us."
If you rewind back to the 1980s, VHS represented a remarkable turning point for the American consumer. For the first time, Hollywood's classics and its recent hits could be rented and watched at home.
"It was a sea change," says Leonard Maltin, the film critic and author who has written stacks of books to meet the consumer need for video recommendations. "Hollywood thought it would hurt movie ticket sales, but it didn't deter people from going to movies; in fact, it only increased their appetite for entertainment. Hollywood also thought it would just be a rental market, but then when someone had the idea of lowering the prices, the people wanted to own movies. They wanted libraries at home, and suddenly VHS was a huge part of our lives."
The format was easy to use (although fast-forwarding and rewinding to any particular spot was the worst new-tech irritant since the telephone busy signal) and, of course, the videocassette recorder and blank VHS tapes made it possible to catch up on any missed must-see TV, whether it was "Days of Our Lives" or "Monday Night Football." Hollywood found that movies also enjoyed a second opening weekend, as viewers throughout the country made Friday night trips to the rental store for new releases.
"I think in some ways it even pulled families together, if that doesn't sound too corny, because renting movies became such a part of the weekend," says Jim Henderson, one of the owners of Amoeba Music, the 45,000-square-foot merchant in Hollywood that sells pop culture in just about every format imaginable, including VHS. "It was also a great thing for film fans. You could educate yourself and go back to the well again and again. We're used to choice now, but that was the first time fans could watch what they wanted when they wanted."
Amoeba no longer buys VHS from distributors such as Distribution Video Audio. But customers bring in tapes every day to trade and sell. "We actually sell maybe 200 a day, almost all of them between $1 to $3," Henderson said. "Almost the same amount comes in as goes out."
A lot of those are the classic or foreign films that are not available on DVD, such as "The Magnificent Ambersons" or Gregory Nava's "El Norte," or vintage music videos by punk bands or new wave pioneers such as Black Flag or Siouxsie and the Banshees. Some older customers simply don't want to switch to DVD, others just like the bargain-basement price of the tapes.
But, Henderson said, unlike with vinyl records, no one seems to cling to VHS for romantic reasons.
"DVDs replaced VHS really fast compared to other format changes through the years," Henderson said. "VHS took too long to rewind, they were boxy and cumbersome, the picture was kind of flawed. The tape inside was delicate and just didn't hold up. DVD just blew it away."
It's true, the VHS tape never really had a chance once the DVD arrived in the late 1990s with all its shiny allure -- higher quality image, nimble navigation and all that extra content. After a robust run at the center of pop culture, VHS rentals were eclipsed by DVD in 2003. By the end of 2005, DVD sales were more than $22 billion and VHS was slumping badly but still viable enough to pull in $1.5 billion. Next year, that won't be the case.
Just before Halloween, JVC, the company that introduced the Video Home System format in 1977 in the United States, announced that it would no longer make stand-alone videocassette recorders. The electronic manufacturer still produces hybrid VHS-DVD players, but it's not clear how long that will last.
For a format that made Hollywood so much money, VHS leaves behind a shallow footprint in the movies themselves. There was "The Ring," a 2002 horror movie and its 2005 sequel, about a mysterious VHS tape that brings death to whoever watches it, but that's a sad valentine. This year Jack Black and Mos Def starred in "Be Kind Rewind," a loopy comedy that finds its center at a VHS rental store that is holding out against the DVD era, but the rebellion didn't go beyond the script -- the movie is available for rent or purchase on DVD and Blu-ray, but it was never released on VHS.
The format was also name-checked in "The 40-Year-Old Virgin," the 2005 hit film that stars an unloved salesman at an electronics store; and even he has no room in his heart for the underdog format. "It's a dead technology," he explains to a customer. "It's like buying an eight-track player."
Kugler is one of the rare people who can stir up some nostalgia for the black, boxy tapes. His father bought Distribution Video Audio in 1988 and carved out a niche as an inventory supplier for the video rental stores that were popping up everywhere. His young son was interested in a different end of the entertainment business; the younger Kugler spent many afternoons in his teen years sneaking onto the Paramount Pictures studio lot and soaking it all in. While watching the cast at work on "Planes, Trains and Automobiles," he decided he wanted to become a filmmaker; soon, the kid who was always underfoot on the "Cheers" set even coaxed Ted Danson to appear in a two-minute film he made.
But life took Kugler on a less glamorous path. He started working at Distribution Video Audio in 1991 and in short order took the company to new heights by negotiating directly with studios to buy their overrun inventory.
The approach led the company beyond VHS, and soon Kugler's warehouses were filling up with CDs, books and merchandise like "CSI: Crime Scene Investigation" wristwatches and "America's Next Top Model" T-shirts.
A casual observer might wonder how much shelf life those sorts of products could possibly have, but Kugler has moved hard to the Internet and says the "scavenger culture" mentality and sites such as Half.com, Amazon Marketplace and EBay have made it easier than ever to match narrow-niche and oddball customers with the products they want -- especially when it's priced to go at $2 or $3.
With some things, though, even Kugler the great salvager can't find a buyer no matter how low he goes. He took a loss on 50,000 copies of "Yo-Yo Man," a Smothers Brothers instructional video for the stringed toy. ("I'm not sure what I was thinking on that one," Kugler said.) And then there is that stash of VHS tapes that couldn't even earn a spot on the last shipment out of his warehouse: a few thousand copies of "The Man With the Screaming Brain," a 2005 horror movie about a mad scientist, a Bulgarian tycoon, a cab driver and some cranial misadventures. ("That one," Kugler said, "will be buried with us.")
The majority of his firm's business today is with big box retailers including Target, Wal-Mart, K-Mart and Sears, where the company sets up displays of its discounted DVDs, such as "Superman Returns" and "Proof of Life," which are often priced at $10 or less. Plenty of customers see that price as an invitation to build up their DVD collections.
But Kugler, with a sly smile, offered a warning to consumers thinking of putting up shelving to handle their burgeoning libraries.
"The DVD will be obsolete in three or four years, no doubt about it. Everything will be Blu-ray," Kugler said, anticipating the next resident at his pop culture retirement home. "The days of the DVD are numbered. And that is good news for me."
geoff.boucher@latimes.com
Showing posts with label VHS. Show all posts
Showing posts with label VHS. Show all posts
Sunday, December 28, 2008
Wednesday, February 27, 2008
DVD FORMATS
http://www.theglobeandmail.com/servlet/story/LAC.20080220.RBLURAY20/TPStory/?query=Toshiba
DVD FORMATS: HOW SONY'S BLU-RAY TRIUMPHED OVER TOSHIBA'S HD
Stringer makes his mark
Sony's CEO led his company to victory in the high-definition sweepstakes by convincing the major studios to come aboard
BARRIE MCKENNA AND MATT HARTLEY
February 20, 2008
WASHINGTON, TORONTO -- Howard Stringer made history in 2005 for being the first non-Japanese executive to take the helm at Sony Corp. But he may be better remembered as the one who won the high-definition war, erasing the stain on the electronics firm's image ever since it lost the videotape war two decades earlier.
Although celebrated yesterday, the victory was sealed last month when Sony swayed Warner Bros. to back Sony's Blu-ray technology and quit producing movies using Toshiba Corp.'s rival HD DVD format.
What remains a mystery is just how big a push Warner needed to pick sides. Analysts say Sony only prevailed following a heated bidding war against Toshiba, with the reward reaching as much as $400-million (U.S.). Neither side has confirmed the size of any bids or payments.
It was supposed to be the technology equivalent of First World War trench warfare: A prolonged battle to the death between Toshiba and Sony for global domination in high-definition DVDs.
In the end, the denouement was more like Germany's swift 1940 end run of the Maginot line.
Less than two years after its first HD DVD player hit the market, Toshiba president Atsutoshi Nishida raised the white flag, declaring yesterday that it would stop making and selling the devices altogether within a month.
Toshiba's unconditional surrender leaves the spoils to Sony, maker of the rival Blu-ray disc player - a technologically superior format that had the backing of virtually all the major movie studies and retailers.
"We simply had no chance to win," Mr. Nishida acknowledged bluntly.
The final straw, he said, was Warner's decision last month to exclusively release movies in Blu-ray. The decision by Warner, with about 20 per cent of the movie market, put a critical mass of the industry in the Blu-ray camp.
With billions of dollars in global sales at stake, experts had predicted the Toshiba-Sony battle would go on for years - not unlike the 1980s battle of videotape formats between VHS (Matsushita) and Betamax (Sony). That war lasted a decade, leaving Sony battered and humiliated.
So how did this epic battle come to such an abrupt end?
The answer lies in part with the bruising Sony experienced with Betamax, which, like Blu-ray, was also the better product on paper.
For more that 20 years, Sony has been "haunted by Betamax" and was fiercely determined not to let history repeat itself, explained Xavier Drèze, a marketing professor at the University of Pennsylvania's Wharton business school.
"Sony was much smarter," Prof. Drèze said. "They understood this time they couldn't do it alone. They understood that they needed strategic partnerships with industry players."
The war was over when Sony managed to line up a critical mass of partners - in Hollywood, Silicon Valley and on Main Street.
The tipping point was Warner Bros. But Sony Pictures, Walt Disney Co. and News Corp.'s Twentieth Century Fox Film Corp. had already done the same - signing exclusive sealed deals with presumably rich royalty arrangements.
"This was heavy hitters in a back room talking about what the royalty structure was going to be and how much money they were willing to put on the table to be exclusive with one camp or the other. That was the determining factor here," concluded Van Baker, an analyst with market research firm Gartner Inc.
Until last month, Warner had been backing both technologies.
Last Friday, Wal-Mart Stores Inc. announced it would sell only Blu-ray DVDs. Officials said "customer feedback" prompted its decision.
Netflix Inc., Best Buy Co. Inc., Blockbuster Inc. and Target Corp. had earlier done the same.
"Everyone was tired of the format war, the retailers were tired of it, the consumer electronics vendors were tired of it and they just wanted this thing to get settled," Mr. Baker said.
"Consumers and the industry learned the hard way with Beta and VHS that a prolonged format war was disastrous. There was a lot of motivation to get one or the other to win and the only thing that protracted it was the amount of money flying around."
The groundwork for Sony's stunning victory, however, came months, even years ago. Prof. Drèze said Blu-ray had several things going for it that helped it to build loyalty with consumers and the industry.
Six years ago yesterday - and years before the first Blu-ray disc or player was sold - Sony had lined up most of the other computer and electronics makers, including LG Electronics, Panasonic, Samsung, Apple and Dell.
Sony also owned a major movie studio. So it could push its own technology.
Third, the company sold Blu-ray to rival movie studios with the promise of superior digital copyright protection.
Sony also used its PlayStation video game console, which also works as a Blu-ray player, as a sort of "Trojan horse," Prof. Drèze said.
Sony has already sold 10.5 million of its PS3 consoles, compared with roughly one million HD DVD players. PlayStation buyers, he said, unwittingly embraced Blu-ray and undermined HD DVD.
Ultimately, the technology is superior. Blu-ray can hold up to three times more data (200 gigabytes versus 60) and offers higher resolution.
In the end, it could be a pyrrhic victory for Sony. The age of hard copy discs is already giving way to digital downloads, stored and played from PCs, iPods and other portable devices.
"I don't think the heyday of DVD is going to return," said Mr. Baker, the analyst. "For most consumers, digital downloads are going to be very appealing."
How Sony lost Betamax
1 QUALITY OVER
QUANTITY Despite better picture quality, Sony's original Betamax tapes could record only one hour of video, while rival VHS tapes could store double that.
2 SECRET RECIPE
Sony initially failed to license its Betamax technology to a sufficient number of manufacturers, thinking it could go it alone. This led to a situation where VHS players competed against one another for share, driving down prices and making the format more attractive to consumers.
3 BUYING V. RENTING When both systems arrived in the United States in the mid-1970s, VHS machines were less expensive to rent. When consumers began to purchase rather than rent their video players, they tended to go with VHS machines. 4PORN CONUNDRUM Sony refused to license the Betamax technology to adult film companies, who turned to VHS tapes and ended up creating a multibillion-dollar industry.
How Sony won Blu-ray
1 BIGGER IS BETTER
Sony's Blu-ray discs can store upward of 50 gigabytes of data on a single disc, while HD DVDs hold about 30 gigs.
2 PLAYSTATION 3
By including a Blu-ray drive in its next-generation video game console, Sony was able to drive sales of both the PS3 and its new DVD format.
3 SOLID PARTNERSHIPS Not wanting to duplicate the Betamax mistake, Sony took the initiative to license its Blu-ray technology with as many partners as possible. When Blu-ray was first announced in 2002, Sony had already signed up eight partner companies committed to producing players.
4 CONTENT IS KING
By signing exclusive deals with more studios and content providers than Toshiba, Sony was able to squeeze its competitor to the sidelines. Warner's defection to Blu-ray was the fatal blow.
Matt Hartley
Dead technologies
Media formats we have used, loved and discarded for the next best thing
The cassette tape
A Walkman and roller skates, anyone? Tapes were the original portable format and made music pirates of us all. (Can I tape your Fleetwood Mac Rumors?) But they were hated by record companies. The sound quality tended to go tinny after a few dozen plays, and many tapes wound up melting in a car on a sunny day.
Eight tracks
Developed by plane maker Bill Lear, eight-track tapes were large and couldn't be rewound. And because of their high tape speed, didn't sound great. Nevertheless, they were popular in the 1970s, thanks to the auto industry, which installed thousands of eight-track players. When sales slipped, companies eager to pare formats quickly dropped the eight track. Vinyl
Cumbersome to play and easily damaged, albums faded out in the late 1980s. But album covers managed to become a genuine art form and another way to grab music buyers' attention. Lately, albums have a enjoyed a comeback, thanks to collectors, club DJs and scratching (ask your kids).
Compact discs
CDs are dead? They will be soon. Who needs all those plastic cases and discs when you can fill your hard drive and iPod with thousands of songs? Using a credit card, of course. Downloading music for free is wrong, isn't it?
DVD FORMATS: HOW SONY'S BLU-RAY TRIUMPHED OVER TOSHIBA'S HD
Stringer makes his mark
Sony's CEO led his company to victory in the high-definition sweepstakes by convincing the major studios to come aboard
BARRIE MCKENNA AND MATT HARTLEY
February 20, 2008
WASHINGTON, TORONTO -- Howard Stringer made history in 2005 for being the first non-Japanese executive to take the helm at Sony Corp. But he may be better remembered as the one who won the high-definition war, erasing the stain on the electronics firm's image ever since it lost the videotape war two decades earlier.
Although celebrated yesterday, the victory was sealed last month when Sony swayed Warner Bros. to back Sony's Blu-ray technology and quit producing movies using Toshiba Corp.'s rival HD DVD format.
What remains a mystery is just how big a push Warner needed to pick sides. Analysts say Sony only prevailed following a heated bidding war against Toshiba, with the reward reaching as much as $400-million (U.S.). Neither side has confirmed the size of any bids or payments.
It was supposed to be the technology equivalent of First World War trench warfare: A prolonged battle to the death between Toshiba and Sony for global domination in high-definition DVDs.
In the end, the denouement was more like Germany's swift 1940 end run of the Maginot line.
Less than two years after its first HD DVD player hit the market, Toshiba president Atsutoshi Nishida raised the white flag, declaring yesterday that it would stop making and selling the devices altogether within a month.
Toshiba's unconditional surrender leaves the spoils to Sony, maker of the rival Blu-ray disc player - a technologically superior format that had the backing of virtually all the major movie studies and retailers.
"We simply had no chance to win," Mr. Nishida acknowledged bluntly.
The final straw, he said, was Warner's decision last month to exclusively release movies in Blu-ray. The decision by Warner, with about 20 per cent of the movie market, put a critical mass of the industry in the Blu-ray camp.
With billions of dollars in global sales at stake, experts had predicted the Toshiba-Sony battle would go on for years - not unlike the 1980s battle of videotape formats between VHS (Matsushita) and Betamax (Sony). That war lasted a decade, leaving Sony battered and humiliated.
So how did this epic battle come to such an abrupt end?
The answer lies in part with the bruising Sony experienced with Betamax, which, like Blu-ray, was also the better product on paper.
For more that 20 years, Sony has been "haunted by Betamax" and was fiercely determined not to let history repeat itself, explained Xavier Drèze, a marketing professor at the University of Pennsylvania's Wharton business school.
"Sony was much smarter," Prof. Drèze said. "They understood this time they couldn't do it alone. They understood that they needed strategic partnerships with industry players."
The war was over when Sony managed to line up a critical mass of partners - in Hollywood, Silicon Valley and on Main Street.
The tipping point was Warner Bros. But Sony Pictures, Walt Disney Co. and News Corp.'s Twentieth Century Fox Film Corp. had already done the same - signing exclusive sealed deals with presumably rich royalty arrangements.
"This was heavy hitters in a back room talking about what the royalty structure was going to be and how much money they were willing to put on the table to be exclusive with one camp or the other. That was the determining factor here," concluded Van Baker, an analyst with market research firm Gartner Inc.
Until last month, Warner had been backing both technologies.
Last Friday, Wal-Mart Stores Inc. announced it would sell only Blu-ray DVDs. Officials said "customer feedback" prompted its decision.
Netflix Inc., Best Buy Co. Inc., Blockbuster Inc. and Target Corp. had earlier done the same.
"Everyone was tired of the format war, the retailers were tired of it, the consumer electronics vendors were tired of it and they just wanted this thing to get settled," Mr. Baker said.
"Consumers and the industry learned the hard way with Beta and VHS that a prolonged format war was disastrous. There was a lot of motivation to get one or the other to win and the only thing that protracted it was the amount of money flying around."
The groundwork for Sony's stunning victory, however, came months, even years ago. Prof. Drèze said Blu-ray had several things going for it that helped it to build loyalty with consumers and the industry.
Six years ago yesterday - and years before the first Blu-ray disc or player was sold - Sony had lined up most of the other computer and electronics makers, including LG Electronics, Panasonic, Samsung, Apple and Dell.
Sony also owned a major movie studio. So it could push its own technology.
Third, the company sold Blu-ray to rival movie studios with the promise of superior digital copyright protection.
Sony also used its PlayStation video game console, which also works as a Blu-ray player, as a sort of "Trojan horse," Prof. Drèze said.
Sony has already sold 10.5 million of its PS3 consoles, compared with roughly one million HD DVD players. PlayStation buyers, he said, unwittingly embraced Blu-ray and undermined HD DVD.
Ultimately, the technology is superior. Blu-ray can hold up to three times more data (200 gigabytes versus 60) and offers higher resolution.
In the end, it could be a pyrrhic victory for Sony. The age of hard copy discs is already giving way to digital downloads, stored and played from PCs, iPods and other portable devices.
"I don't think the heyday of DVD is going to return," said Mr. Baker, the analyst. "For most consumers, digital downloads are going to be very appealing."
How Sony lost Betamax
1 QUALITY OVER
QUANTITY Despite better picture quality, Sony's original Betamax tapes could record only one hour of video, while rival VHS tapes could store double that.
2 SECRET RECIPE
Sony initially failed to license its Betamax technology to a sufficient number of manufacturers, thinking it could go it alone. This led to a situation where VHS players competed against one another for share, driving down prices and making the format more attractive to consumers.
3 BUYING V. RENTING When both systems arrived in the United States in the mid-1970s, VHS machines were less expensive to rent. When consumers began to purchase rather than rent their video players, they tended to go with VHS machines. 4PORN CONUNDRUM Sony refused to license the Betamax technology to adult film companies, who turned to VHS tapes and ended up creating a multibillion-dollar industry.
How Sony won Blu-ray
1 BIGGER IS BETTER
Sony's Blu-ray discs can store upward of 50 gigabytes of data on a single disc, while HD DVDs hold about 30 gigs.
2 PLAYSTATION 3
By including a Blu-ray drive in its next-generation video game console, Sony was able to drive sales of both the PS3 and its new DVD format.
3 SOLID PARTNERSHIPS Not wanting to duplicate the Betamax mistake, Sony took the initiative to license its Blu-ray technology with as many partners as possible. When Blu-ray was first announced in 2002, Sony had already signed up eight partner companies committed to producing players.
4 CONTENT IS KING
By signing exclusive deals with more studios and content providers than Toshiba, Sony was able to squeeze its competitor to the sidelines. Warner's defection to Blu-ray was the fatal blow.
Matt Hartley
Dead technologies
Media formats we have used, loved and discarded for the next best thing
The cassette tape
A Walkman and roller skates, anyone? Tapes were the original portable format and made music pirates of us all. (Can I tape your Fleetwood Mac Rumors?) But they were hated by record companies. The sound quality tended to go tinny after a few dozen plays, and many tapes wound up melting in a car on a sunny day.
Eight tracks
Developed by plane maker Bill Lear, eight-track tapes were large and couldn't be rewound. And because of their high tape speed, didn't sound great. Nevertheless, they were popular in the 1970s, thanks to the auto industry, which installed thousands of eight-track players. When sales slipped, companies eager to pare formats quickly dropped the eight track. Vinyl
Cumbersome to play and easily damaged, albums faded out in the late 1980s. But album covers managed to become a genuine art form and another way to grab music buyers' attention. Lately, albums have a enjoyed a comeback, thanks to collectors, club DJs and scratching (ask your kids).
Compact discs
CDs are dead? They will be soon. Who needs all those plastic cases and discs when you can fill your hard drive and iPod with thousands of songs? Using a credit card, of course. Downloading music for free is wrong, isn't it?
Thursday, February 21, 2008
Wal-Mart dumps HD DVDs to back Blu-ray
http://news.yahoo.com/s/nm/20080215/tc_nm/walmart_dvd_dc
Wal-Mart dumps HD DVDs to back Blu-ray
By Franklin Paul
2-15-8
Wal-Mart Stores Inc (WMT.N) has decided to exclusively sell high-definition DVDs in the Blu-Ray format, dealing what could be a crippling blow to the rival HD DVD technology backed by Toshiba Corp (6502.T).
The move by the world's largest retailer, announced on Friday, caps a disappointing week for HD DVD supporters, who also saw consumer electronics chain Best Buy Co Inc (BBY.N) and online video rental company Netflix Inc (NFLX.O) defect to the Blu-ray camp.
In a statement on its Web site, Wal-Mart said that over the next few months it will phase out sales of HD DVD systems and discs. By June, it will sell only products in the Blu-ray format which was developed by Sony Corp (6758.T).
"We've listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases," said Gary Severson, a Wal-Mart senior vice president.
The move affects 4,000 Wal-Mart and Sam's Club stores in the United States, as well as related online sites. The stores will continue to sell traditional DVD players and movies.
The so-called format war between HD DVD and Blu-ray has been a thorn in the side of retailers, which have had to commit shelf space to devices from both camps even as they field complaints from frustrated and confused customers.
Next-generation DVDs and players, boasting better picture quality and more capacity, were expected to help revive the $24 billion global home DVD market. But Hollywood studios had initially split their alliances between the two camps, meaning only certain films would play on a consumer's DVD machine.
Like the Betamax-VHS battle in the 1980s, having two DVD standards has dampened sales of both and put retailers in a conundrum of having to either choose sides or sell products that have a chance of becoming obsolete very quickly.
The balance of power, however, tipped toward the Sony camp in January after Time Warner Inc's (TWX.N) Warner Bros studio said it would only release high-definition DVDs in Blu-ray format. With that, studios behind some three-quarters of DVDs are backing Blu-ray, although some release in both formats.
Blu-ray also has support from News Corp's (NWSa.N) 20th Century Fox, Walt Disney Co (DIS.N) and Lions Gate Entertainment Corp (LGF.N). Sony's PlayStation 3 game console can also play Blu-ray films.
"So if you bought the HD player like me, I'd retire it to the bedroom, kid's playroom, or give it to your parents to play their John Wayne standard def movies, and make space for a BD player for your awesome Hi Def experience," Wal-Mart's movie and gaming blogger, Susan Chronister, wrote in a posting.
To be sure, Toshiba has secured agreements with studios including NBC Universal's Universal Pictures, Viacom Inc's(VIAb.N) Paramount Pictures and DreamWorks Animation SKG Inc (DWA.N).
Microsoft Corp's (MSFT.O) Xbox 360 also currently works only with HD DVD. However, Microsoft said in January it could consider supporting Blu-ray technology at consumers' behest.
Toshiba could not be reached to comment on Wal-Mart's move.
Earlier on Friday, the Hollywood Reporter quoted unidentified industry sources as saying Toshiba was widely expected to pull the plug on HD DVD in the coming weeks.
Toshiba spokeswoman Junko Furuta said none of what was reported in the magazine had been decided. She declined to comment further, saying: "We cannot comment on speculation."
(Reporting by Franklin Paul; additional reporting by Kiyoshi Takenaka in Tokyo; editing by Phil Berlowitz and Gerald E. McCormick)
Wal-Mart dumps HD DVDs to back Blu-ray
By Franklin Paul
2-15-8
Wal-Mart Stores Inc (WMT.N) has decided to exclusively sell high-definition DVDs in the Blu-Ray format, dealing what could be a crippling blow to the rival HD DVD technology backed by Toshiba Corp (6502.T).
The move by the world's largest retailer, announced on Friday, caps a disappointing week for HD DVD supporters, who also saw consumer electronics chain Best Buy Co Inc (BBY.N) and online video rental company Netflix Inc (NFLX.O) defect to the Blu-ray camp.
In a statement on its Web site, Wal-Mart said that over the next few months it will phase out sales of HD DVD systems and discs. By June, it will sell only products in the Blu-ray format which was developed by Sony Corp (6758.T).
"We've listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases," said Gary Severson, a Wal-Mart senior vice president.
The move affects 4,000 Wal-Mart and Sam's Club stores in the United States, as well as related online sites. The stores will continue to sell traditional DVD players and movies.
The so-called format war between HD DVD and Blu-ray has been a thorn in the side of retailers, which have had to commit shelf space to devices from both camps even as they field complaints from frustrated and confused customers.
Next-generation DVDs and players, boasting better picture quality and more capacity, were expected to help revive the $24 billion global home DVD market. But Hollywood studios had initially split their alliances between the two camps, meaning only certain films would play on a consumer's DVD machine.
Like the Betamax-VHS battle in the 1980s, having two DVD standards has dampened sales of both and put retailers in a conundrum of having to either choose sides or sell products that have a chance of becoming obsolete very quickly.
The balance of power, however, tipped toward the Sony camp in January after Time Warner Inc's (TWX.N) Warner Bros studio said it would only release high-definition DVDs in Blu-ray format. With that, studios behind some three-quarters of DVDs are backing Blu-ray, although some release in both formats.
Blu-ray also has support from News Corp's (NWSa.N) 20th Century Fox, Walt Disney Co (DIS.N) and Lions Gate Entertainment Corp (LGF.N). Sony's PlayStation 3 game console can also play Blu-ray films.
"So if you bought the HD player like me, I'd retire it to the bedroom, kid's playroom, or give it to your parents to play their John Wayne standard def movies, and make space for a BD player for your awesome Hi Def experience," Wal-Mart's movie and gaming blogger, Susan Chronister, wrote in a posting.
To be sure, Toshiba has secured agreements with studios including NBC Universal's Universal Pictures, Viacom Inc's(VIAb.N) Paramount Pictures and DreamWorks Animation SKG Inc (DWA.N).
Microsoft Corp's (MSFT.O) Xbox 360 also currently works only with HD DVD. However, Microsoft said in January it could consider supporting Blu-ray technology at consumers' behest.
Toshiba could not be reached to comment on Wal-Mart's move.
Earlier on Friday, the Hollywood Reporter quoted unidentified industry sources as saying Toshiba was widely expected to pull the plug on HD DVD in the coming weeks.
Toshiba spokeswoman Junko Furuta said none of what was reported in the magazine had been decided. She declined to comment further, saying: "We cannot comment on speculation."
(Reporting by Franklin Paul; additional reporting by Kiyoshi Takenaka in Tokyo; editing by Phil Berlowitz and Gerald E. McCormick)
Sunday, January 13, 2008
Paramount in HD-DVD blow
http://www.ft.com/cms/s/0/ea637496-bd8d-11dc-b7e6-0000779fd2ac.html
Paramount in HD-DVD blow
By Matthew Garrahan and Mariko Sanchanta in Las Vegas
Published: January 8 2008
Paramount is poised to drop its support of HD-DVD following Warner Brothers' recent backing of Sony's Blu-ray technology, in a move that could sound the death knell of HD-DVD and bring the home entertainment format war to a definitive end.
Paramount and DreamWorks Animation, which makes the Shrek films, came out in support of HD-DVD last summer, joining General Electric's Universal Studios as the main backers of the Toshiba format.
However, Paramount, which is owned by Viacom, is understood to have a clause in its contract with the HD-DVD camp that would allow it to switch sides in the event of Warner backing Blu-ray, according to people familiar with the situation.
Paramount is set to have a bumper 2008 with several likely blockbusters, including the latest instalment in the Indiana Jones franchise, slated for release.
Paramount joining the Blu-ray camp would leave HD-DVD likely to suffer the same fate as Sony's now obsolete Betamax video technology, which lost out to VHS in a similar format war in the 1980s.
Warner's decision last week to throw its weight behind Blu-ray saw it join Walt Disney, 20th Century Fox and Metro-Goldwyn-Mayer as backers of the Sony format.
The Warner move gives Blu-ray about 70 per cent of Hollywood's output, although the format's grip on film content will increase further when Paramount comes aboard.
It is unclear whether DreamWorks Animation has the same get-out clause in its contract with the HD-DVD camp. However, Paramount and DreamWorks have a close relationship, with Paramount distributing DreamWorks Animation films.
The two companies also signed their HD-DVD contracts at the same time.
Meanwhile, Universal has declined to comment on its next- generation DVD plans following the Warner move.
Sir Howard Stringer, chief executive of Sony, yesterday held out an olive branch to its rival in the next-generation DVD format wars following Warner's decision to back Blu-ray.
Sir Howard said the company would be "open to dialogue" with the rival high-definition HD-DVD camp to "grow the market". The move came as new figures showed that Blu-ray had opened up a decisive lead over the rival home entertainment format.
Sir Howard said: "We are not going to push people around. We'll talk to anyone . . . we have a lot of work to do to grow the market. We'll be systematic and open to dialogue at all times."
He added that Sony still had "a lot of work" to do to get Blu-ray "widely accepted" among American consumers.
Paramount in HD-DVD blow
By Matthew Garrahan and Mariko Sanchanta in Las Vegas
Published: January 8 2008
Paramount is poised to drop its support of HD-DVD following Warner Brothers' recent backing of Sony's Blu-ray technology, in a move that could sound the death knell of HD-DVD and bring the home entertainment format war to a definitive end.
Paramount and DreamWorks Animation, which makes the Shrek films, came out in support of HD-DVD last summer, joining General Electric's Universal Studios as the main backers of the Toshiba format.
However, Paramount, which is owned by Viacom, is understood to have a clause in its contract with the HD-DVD camp that would allow it to switch sides in the event of Warner backing Blu-ray, according to people familiar with the situation.
Paramount is set to have a bumper 2008 with several likely blockbusters, including the latest instalment in the Indiana Jones franchise, slated for release.
Paramount joining the Blu-ray camp would leave HD-DVD likely to suffer the same fate as Sony's now obsolete Betamax video technology, which lost out to VHS in a similar format war in the 1980s.
Warner's decision last week to throw its weight behind Blu-ray saw it join Walt Disney, 20th Century Fox and Metro-Goldwyn-Mayer as backers of the Sony format.
The Warner move gives Blu-ray about 70 per cent of Hollywood's output, although the format's grip on film content will increase further when Paramount comes aboard.
It is unclear whether DreamWorks Animation has the same get-out clause in its contract with the HD-DVD camp. However, Paramount and DreamWorks have a close relationship, with Paramount distributing DreamWorks Animation films.
The two companies also signed their HD-DVD contracts at the same time.
Meanwhile, Universal has declined to comment on its next- generation DVD plans following the Warner move.
Sir Howard Stringer, chief executive of Sony, yesterday held out an olive branch to its rival in the next-generation DVD format wars following Warner's decision to back Blu-ray.
Sir Howard said the company would be "open to dialogue" with the rival high-definition HD-DVD camp to "grow the market". The move came as new figures showed that Blu-ray had opened up a decisive lead over the rival home entertainment format.
Sir Howard said: "We are not going to push people around. We'll talk to anyone . . . we have a lot of work to do to grow the market. We'll be systematic and open to dialogue at all times."
He added that Sony still had "a lot of work" to do to get Blu-ray "widely accepted" among American consumers.
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