The new BD/DVD chart only compares the top 20 titles by unit volume for each format, but BD has 6% of the market to DVD’s 94%. That may not sound like much, but it is pretty good for a fledgling format just coming off the end of a format war that slowed adoption. As more and more major releases hit Blu-ray day-and-date, especially once Universal, Paramount, and DreamWorks Animation start their BD releases, that percentage should rise steadily – give or take a bit each week for variation.

This issue has a lot of BD coverage – the entire front page is BD-related articles. New releases are seeing an increasing percentage of sales on BD. No Country for Old Men saw 9.8% of sales on BD (the rest on DVD), while Hitman saw 12.6% of sales on BD. That compares to levels of 2-3% for most titles during the format war. With the spike in BD growth, one of the articles examines the issues replicators are facing in adopting to BD demand. The up-front investment in a BD production line runs from $1.5 to $1.7 million for a 25GB line to nearly $2.7 million for a 50GB line. Yields of usable discs is now up to around 75%, from only about half early on. But this isn’t dissimilar to what happened with DVD early on, and over time yields will increase and costs will decrease.

New research from Strategy Analytics predicts that Blu-ray will be in 30 million homes by the end of the year, and 132 million by 2012.

My answers below.

I thought I was pretty savvy, but I don’t think I’d ever heard of format’s 1-6. I did know about Betamax, LaserDisc, CED, and DIVX. And I still own a couple of LaserDisc players and several LaserDiscs. It was a decent format for its day, but flipping & swapping discs mid-movie was a huge down-side. Even with an auto-flip player, which I have, you’d still often have to swap discs mid-movie. And they’re big, of course. I was not reluctant to switch to DVD, that’s for sure.

As for the switch to DVD, I was always vehemently opposed to DIVX – as many of my then co-workers could attest to, given my lunchtime rants on the subject. Such a stupid idea. I can’t decide which DVD-related idea is worse – DIVX or the ‘disposable’ DVDs that were supposed to self-destruct after a couple of days via a dye layer that would turn opaque once exposed to the air. Surprise – they bombed in test marketing.

Makes me wonder how many failed audio media formats I’ve never heard of. Jokes about 8-track aside, there’s DAT, DCC (Digital Compact Cassette), and, arguably, MiniDisc. MD is iffy as it found a niche as a recordable format, and it was fairly successful in Japan with pre-recorded music. Hmm, I suppose SACD and DVD Audio have pretty much been failures too. Reel-to-reel, LP (vinyl of all stripes really), compact cassette, and CD have all been successful. Hmm, were wax cylinders a big success in their day?

Via CNET News.com.

Paramount Home Entertainment quietly came onboard via a statement sent exclusively to The Hollywood Reporter on Wednesday: “We are pleased that the industry is moving to a single high-definition format, as we believe it is in the best interest of the consumer,” the statement reads. “As we look to (begin) releasing our titles on Blu-ray, we will monitor consumer adoption and determine our release plans accordingly.”

Via EngadgetHD.

Peter Faricy, vice president of movies and music at Amazon.com commented, “The high-definition landscape is rapidly changing, and consumers are looking for guidance on how to make the best high-definition buying decisions. Our customers have clearly voiced their support for the Blu-ray format. Blu-ray titles have increased from just over half of our high-definition sales to over three-quarters of our high-definition sales since early January. In order to best serve our customers, Amazon is recommending Blu-ray as the preferred digital format and will continue to carry the ‘Earth’s Largest Selection’ of Blu-ray products.”

Great to see Amazon stepping up as a leader in the market and taking a stand by making Blu-ray their ‘preferred digital format’. You know, as opposed to, say, HD DVD.

I mean, I love Amazon and all, but they could’ve just said “Me too!”

“While Universal values the close partnership we have shared with Toshiba, it is time to turn our focus to releasing new and catalog titles on Blu-ray,” said Craig Kornblau, president of Universal Studios Home Entertainment.

“The path for widespread adoption of the next-generation platform has finally become clear. Universal will continue its aggressive efforts to broaden awareness for high-def’s unparalleled offerings in interactivity and connectivity, at an increasingly affordable price. The emergence of a single, high-definition format is cause for consumers, as well as the entire entertainment industry, to celebrate.”

I’m actually a bit surprised. Not that Universal is supporting Blu-ray, that was obviously coming, but that they made the announcement before Paramount – who still hasn’t done so, from what I can tell. Since Paramount, and DreamWorks Animation, were formerly format neutral, releasing both Blu-ray and HD DVD, I kind of expected them to be the first to jump on the news. Paramount probably still has warehouses full of Blades of Glory Blu-ray discs, and other titles they’d already pressed for release on BD before their sudden shift to HD DVD exclusivity. They could start by give those discs a new street date. I’m sure they’ll announce their plans soon.

Via Blu-ray.com.

Toshiba Corporation today announced that it has undertaken a thorough review of its overall strategy for HD DVD and has decided it will no longer develop, manufacture and market HD DVD players and recorders. This decision has been made following recent major changes in the market. Toshiba will continue, however, to provide full product support and after-sales service for all owners of Toshiba HD DVD products.

Toshiba will cease all production of HD DVD by the end of March:

Toshiba will begin to reduce shipments of HD DVD players and recorders to retail channels, aiming for cessation of these businesses by the end of March 2008. Toshiba also plans to end volume production of HD DVD disk drives for such applications as PCs and games in the same timeframe, yet will continue to make efforts to meet customer requirements. The company will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand.

I’m thrilled to see the end of this war, doubly so to see Blu-ray finally carry the day. I’ve been calling the war for Blu-ray since before either product shipped, and I was sorry to see a war develop in the first place. Now that the war is over and we’ll have one format going forward I look forward to more Blu-ray title releases and player advancements. There are definitely a few Universal & Paramount titles I look forward to picking up on Blu-ray.

I’m also hopeful that Toshiba will join the BDA and devote their product development expertise toward producing top-notch Blu-ray players. Toshiba’s HD DVD players were decent hardware, and it gives hope that they’ll be able to produce some nice BD decks. I do think they’ll join the BDA, since the alternative is to sit out the next-generation disc market completely. And while Toshiba may have a healthy DVD business, I can’t see them yield the high-def market to the competition without any response. They’re statement seems to indicate they plan to remain a player:

“We carefully assessed the long-term impact of continuing the so-called ‘next-generation format war’ and concluded that a swift decision will best help the market develop,” said Atsutoshi Nishida, President and CEO of Toshiba Corporation. “While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Of course, there are still some unanswered questions. Will those who invested in HD DVD players recently get any compensation? (I’d guess no.) How many HD DVD owners will return their players before the return window closes? Will we see a Blu-ray drive for the Xbox 360? Would Microsoft consider bundling Blu-ray into a new model of the 360 now that there is one format, to compete more directly with the PS3? (That’s probably a stretch – but I think a BD add-on drive will happen.)

Press release picked up via EngadgetHD.

EDIT. Engadget Japan is at the Toshiba press conference. From the Q&A session:

Q: Any plans to adopt Blu-ray?
A: No plans at all, not at this moment.

Q: Are there no plans for next gen optical disc at all?
A: We don’t have any plans to announce at this time.

Of course, keep in mind that just yesterday Toshiba was stating that no final decision had been made to exit the HD DVD market. So not having any plans at this moment likely means just that – they haven’t decided exactly what they will do going forward and won’t have anything to announce until they’ve had time to formulate those plans.

Interesting to see their figures for HD DVD players sold – since it is quite a bit short of the ‘one million’ figure that the HD DVD camp oft repeated previously:

Q: How many HD DVD players and recorders, exactly, did you sell?
A: 600,000 players in the US — 300,000 of which were Xbox 360 HD DVD drives. 100,000 units were sold in Europe. And about 10,000 players and 20,000 recorders in Japan. So about 730,000 units worldwide.

EDIT 2: I see that, sometime today, Engadget edited their post and it now reads:

Q: How many HD DVD players and recorders, exactly, did you sell?
A: 600,000 players in the US and 300,000 Xbox 360 HD DVD drives. 100,000 units were sold in Europe. And about 10,000 players and 20,000 recorders in Japan. So about 1,030,000 units worldwide.

It looks like they updated it to list the 300,000 Xbox 360 drives *in addition to* the 600,000 standalone players, and not as part of that 600,000. Which puts the total just over the one million mark.

NHK reports that Toshiba plans to stop producing HD DVD players and recorders at its plant in Aomori Prefecture, northern Japan. And, of course, all future development of the format will cease. There is an extraordinary meeting of Toshiba’s board of directors early this week, and the exit plan is expected to be decided at that meeting. Toshiba will suffer a loss of tens of billions of yen, hundreds of millions of dollars, related to the termination of their HD DVD business.

Via EngadgetHD.

While Best Buy announced they would officially promote Blu-ray just this past week, de facto they seem to have been promoting it as far back as at least January. In the study, not one Best Buy rep recommended HD DVD. Reps were also quick to mention the format war, and were already declaring Blu-ray the winner:

“Without even being asked about the battle for DVD supremacy, half the salespeople told our shoppers that there was a battle going on and Blu-ray either was already the winner (or would become the dominant player in the end),” [Denove] said.

“About a third of all salespeople said our shoppers should choose Blu-ray because of the strength of the companies behind Blu-ray,” Denove said.

The only advantage mentioned for HD DVD in the 200 visits was pricing, and not one sales person suggested that HD DVD might win the format war. Combo players didn’t fair well either, only 7% of sales people even suggested combo players as an option. It seems that sales people were personally so convinced that Blu-ray would win that they didn’t feel the need to suggest combo players, or HD DVD.

Via EngadgetHD.

Enough about my family and on to the Wal-Mart plans… by June Wal-Mart will only be carrying BluRay movies and hardware machines, and of course standard def movies, DVD players, and up convert players. Not sure of the short term pricing plans, but history tells us that as more people move to a new technology prices typically go down.

Wal*Mart also issued an official statement:

Bentonville, Ark., Feb. 15, 2008 – Wal-Mart Stores, U.S. today announces that its 4,000 Wal-Mart and Sam’s Club stores will move forward this year with one hi-definition movie and hardware format: Blu-ray. The change will take place quickly over the next several months whereby the retailer will phase out HD DVD offerings and reorganize shelf space. By June, Wal-Mart stores, Sam’s Clubs, www.walmart.com and www.samsclub.com will offer only Blu-ray movies and hardware machines, as well as standard definition movies and DVD players, and up converts.

“We’ve listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases,” said Gary Severson, senior vice president, Home Entertainment, Wal-Mart, U.S. “With the customers best interest in all we do, we wanted to share our decision and timeline with them as soon as possible, knowing it will help simplify their purchase decision, increase selection, and increase adoption long term. We anticipate enhancing our selection with continued great values in hi-definition Blu-ray products, so our customers can further enhance their entertainment experience at home.”

Wal-Mart will continue to sell through remaining HD DVD product, but in less than 30 days customers will see a more predominant move toward Blu-ray in stores, clubs and online. As the nation’s largest retailer, Wal-Mart thoughtfully reviewed all areas and impact in making its decision, and is excited to move forward with one format and share its future plans with customers.

With Wal*Mart dropping HD DVD completely, and Best Buy focusing on Blu-ray, you have the top two retailers of consumer electronics and media both pushing Blu-ray. And Netflix, the top online rental company, is also dropping HD DVD. How many more hits can HD DVD take before they just lay down?

Picked up from CNET News.com.

Officially, no decision has been made, insists Jodi Sally, vp of marketing for Toshiba America Consumer Products. “Based on its technological advancements, we continue to believe HD DVD is the best format for consumers, given the value and consistent quality inherent in our player offerings,” she said.

But she hinted that something’s in the air. “Given the market developments in the past month,” she said, “Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players.”

They also report that, for the week ending 2/10, BD took 81% of disc sales to HD DVD’s 19%. That would be a large backslide for HD DVD from the previous week’s 74:26 split, almost back to the 1/27 82:18 split. And this with heavy discounting on HD DVD players, a Super Bowl ad that reportedly cost Toshiba $2.7 million, and a number of concurrent promotions on both players and media. They also caught a few Blu studio converts that I’d missed:

Blu-ray support among independents is rising. ADV Films, Tai Seng Entertainment, Topics Entertainment and National Geographic have all confirmed they are going Blu-ray exclusive, while more than one indie that was releasing titles just on HD DVD, including Surround Records and Opus Arte, will now offer Blu-ray as well.

This is still firmly in the rumor category, but it really seems inevitable. Toshiba cannot continue to bleed red ink on every HD DVD player they sell. Their deep price cuts were also deep cuts to the corporate wrist. A desperate cry for attention – but one that doesn’t appear to have worked. The only upside could be clearing out stock from their warehouses so they aren’t stuck with too many units when they finally announce that HD DVD is dead.

Picked up from High-Def Digest.

We have long held the belief that HD DVD is the best format for consumers based on quality and value, and with more than 1 million HD DVD players on the market, it’s unfortunate to see Netflix make the decision to only stock Blu-ray titles going forward. While the Best Buy announcement says they will recommend Blu-ray, at least they will continue to carry HD DVD and offer consumers a choice at retail.

Is it just me, or does that ‘at least’ postfix sounds desperate and pitiful? HD DVD needs to go on Jerry Springer. “Sure, he left me for another woman and told everyone he loves her more. But he said I can still cook for him and do his laundry! At least I can still be part of his life!” HD DVD needs some friends to sit them down and get them to move on. Someone stage an intervention.

In another blow, Scandinavian retailer Hi-Fi Klubben announced that going forward they will no longer sell HD DVD. They’re putting their existing HD DVD stock on clearance to get rid of it and will be focusing exclusively on Blu-ray going forward. Hi-Fi Klubben via Blu-ray.com.

And Michael Bay is at it again, talking up Blu-ray and slamming HD DVD. Home Media Magazine reports:

“Blu-ray’s better, and I told everyone,” Bay said at the Visual Effects Society’s sixth annual award show, where he presented the award for animated character in a motion picture. “I was very vocal about it. I knew HD [DVD] was not going to make it.”

With HD DVD being edged out of competition by sheer volume of product moving to Blu-ray, Bay is all but gloating.

“Am I thrilled? It really wasn’t my fight, but remember what I said in the press? I was kind of saying HD [DVD]’s going to lose,” he said. “No one believed me.”

Bay has always been fairly vocal about his preference for Blu-ray over HD DVD, he has to be loving the recent developments. Via Blu-ray.com.

The leaked NPD data broke down the sales by brand:

• Sony (32 percent unit share, 33 percent dollar share)
• Toshiba (28 percent unit share, 14 percent dollar share)
• Samsung (13 percent unit share, 23 percent dollar share)
• Sharp (17 percent unit share, 14 percent dollar share)
• Panasonic (8 percent unit share, 12 percent dollar share)
• LG (1 percent unit share, 3 percent dollar share)

That’s not a good sign for Toshiba, when Sony alone is selling more players than they are – despite the price cuts.

And, in the rumor category, it Home Cinema Choice is reporting that UK high street retailer Currys may be dropping HD DVD. HCC claims an internal source told them it is posted on the Currys’s intranet and is ’100% certain’. But they’ve also updated to say that, since the news leaked a ‘certain manufacturer of HD DVD’ (which must be Toshiba, really) is lobbying Currys to keep stocking the format.

So, first up, Netflix announced via a press release that they’re going Blu-ray exclusive.

“The prolonged period of competition between two formats has prevented clear communication to the consumer regarding the richness of the high-def experience versus standard definition,” said Ted Sarandos, chief content officer for Netflix. “We’re now at the point where the industry can pursue the migration to a single format, bring clarity to the consumer and accelerate the adoption of high-def. Going forward, we expect that all of the studios will publish in the Blu-ray format and that the price points of high-def DVD players will come down significantly. These factors could well lead to another decade of disc-based movie watching as the consumer’s preferred means.”

They will stop adding new HD DVD titles to their catalog, and they will be phasing out existing HD DVD titles by the end of the year. In a comment at Zatz Not Funny user lorenzp posted a link to the email he received from Netflix:

We’re Going Blu-ray

Dear Phil,

You’re receiving this email because you have asked to receive high-definition movies in the HD DVD format. As you may have heard, most of the major movie studios have recently decided to release their high-definition movies exclusively in the Blu-ray format. In order to provide the best selection of high-definition titles for our members, we have decided to go exclusively with Blu-ray as well.

While we will continue to make our current selection of HD DVD titles available to you for the next several months, we will not be adding additional HD DVD titles or reordering replacements.

Toward the end of February, HD DVDs in your Saved Queue will automatically be changed to standard definition DVDs. Then toward the end of this year, all HD DVDs in your Queue will be changed to standard definition DVDs. Don’t worry, we will contact you before this happens.

You can click to change your format preferences.

We’re osrry for any inconvenience. If you have any questions of need further assistance, please call us at 1 (888) 638-3549.

-The Netflix Team

Ironically, this seems to leave Blockbuster Online as the best option for HD DVD renters. Ironic, since last June Blockbuster went Blu-ray exclusive in their physical stores and, at the time, a lot of HD DVD fans said things like “Who cares, we’ll use Netflix!” Apparently not for much longer. Oops.

While HD DVD was still reeling from the Netflix announcement, Best Buy kicked them while they were down. While Best Buy isn’t (yet) dropping HD DVD, they will “focus on Blu-ray products“. Best Buy’s press release offers some details:

Best Buy Co., Inc. (NYSE: BBY) is taking a step forward in addressing consumer confusion about high-definition formats. Beginning in early March, the leading consumer electronics retailer will prominently showcase Blu-ray hardware and software products in its Best Buy retail and online channels in the United States.

“Consumers have told us that they want us to help lead the way. We’ve listened to our customers, and we are responding. Best Buy will recommend Blu-ray as the preferred format,” said Brian Dunn, Best Buy’s president and chief operating officer. “Our decision to shine a spotlight on Blu-ray Disc players and other Blu-ray products is a strong signal to our customers that we believe Blu-ray is the right format choice for them.”

Dunn continued, “Best Buy has always believed that the customer will benefit from a widely-accepted single format that would offer advantages such as product compatibility and expanded content choices. Because we believe that Blu-ray is fast emerging as that single format, we have decided to focus on Blu-ray products.”

“With the explosion of HDTVs, customers are hungry for quality, high definition content. We believe our move to feature Blu-ray should help consumers feel confident in their hi-def content choices,” said Mike Vitelli, Best Buy’s senior vice president, Home Solutions. “Best Buy is excited by the next generation of digital products and we know our customers are too. We are excited about helping customers find the right mix of products and services to make the next generation of high definition entertainment technology come alive for them. We believe that Blu-ray is the right solution for consumers.”

Best Buy currently carries a wide array of Blu-ray hardware and software products. The company noted that it will continue to carry an assortment of HD-DVD products for customers who desire to purchase these products.

As I’ve said before, this is a feedback loop. As HD DVD players and media become harder to obtain, and Blu-ray players and media get more promotion, the market will continue to shift toward Blu-ray. And the shift in the market will lead more vendors to back Blu-ray as the favor format. And it starts all over again.

Over the next few months this shift is going to accelerate – Best Buy starts promoting Blu-ray in March and Warner stops selling HD DVD at the end of May. And HD DVD will be harder and harder to rent from Netflix as worn out discs are not replaced, and new titles are not added.

Netflix and Best Buy are clearly sending a message to the HD DVD camp to cut it out and end the war.

We’ll see how they fare once Warner stops releasing HD DVDs at the end of May, not to mention their big 85th Anniversary push on DVD and Blu-ray.

Also, Stefan Baustert, chief execturive of Germany’s Singulus Technologies AG, which produces Blu-ray pressing systems, stated that the“chance has significantly increased that we will deliver more than the previously planned 15 Blu-ray machines in 2008″. He also said that it was probably that Singulus could reach a worldwide market share for Blu-ray machines of roughly two-thirds. So it sounds like we’ll be seeing a notable increase in production capacity for Blu-ray discs over the course of 2008, and that Warner’s announcement has sparked further growth in the market. Via Forbes.com