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.

EngadgetHD also made me aware of an article in Video Business about the shift in the retail world toward Blu-ray since Warner’s announcement. Trans World Entertainment, Newbury Comics, Video Buyers Group and Hastings Entertainment are beginning to emphasize Blu-ray over HD DVD.

Trans World operates over 800 F.Y.E. retail locations, and they will be giving more room to BD titles than HD DVD titles. Going forward they will be ordering ‘key’ new releases on HD DVD, while continuing to stock most of the released BD titles. Customers will be able to special order HD DVD titles that are not stocked.

Hastings Entertainment is continuing to stock HD DVD, but sees a shift to an emphasis on Blu-ray in their stores.

Newbury Comics plans to cut back on the ‘copy depth’ of HD DVD titles compared to BD. Before the Warner announcement they were ordering about half the copy depth on HD DVD as BD, and that will shift to 1/3 to as little as 1/4. And going forward they may only stock HD DVD at specific retail locations have have show strong HD media sales.

The Video Buyers Group supplies a large number of retail outlets. Due to the market confusion stemming from the format war roughly half of their members, 600-800 stores, have avoided offering either format. With Warner’s announcement and the perceived shift in the market to Blu-ray, VBG is preparing a new BD introduction package to help stores launch a new Blu-ray high-def section.

Major retailers, like Best Buy, are still selling both formats for the time being. But there is likely to be a natural shift toward Blu-ray simply due to more titles being available on the format as Warner, and other studios, stop releasing HD DVD. There will naturally be more titles on BD, which translates to more shelf space.

The last outlets to see a shift will likely be online, like Amazon.com. Since they don’t have the same shelf-space limitations as physical stores, and their unit costs for stocking the formats is much lower, they can continue to offer both formats the longest.

But there is a positive feedback loop forming now. With Warner, New Line, HBO, and other studios dropping HD DVD in the coming months, there will be a shift in available titles to BD. This will naturally create a further shift in media sales toward BD. As retailers shift shelf space to BD this will reinforce that shift in sales. And as the sales shift there is more incentive for retailers to increase their focus on BD, further reinforcing the sales shift. And as the shift increases and HD DVD sales suffer, there will be growing pressure on the studios to release their titles on BD.

As far as I’m concerned, it can’t happen soon enough. I want to see the industry backing one format, moving the technology forward.

Furthermore, despite NBC Universal having a fairly good sized pavilion at CES, Universal confirmed to High-Def Digest that they will not be making any HD DVD title announcements at CES, despite having been expected to do so. The previously couple of years have seen a number of Blu-ray and HD DVD titles announced during CES by the various studios, but this year the HD DVD camp has been silent, while the Blu-ray camp has talked up their future plans. It seems that the hD DVD studios have decided to consider their options before committing to any further announcements.

And the persistent rumors that Paramount and Universal will go neutral, and possibly switch to Blu-ray, just won’t go away. They got more fuel today from Bill Hunt at The Digital Bits:

We remain convinced that both Paramount and Universal are moving towards announcing Blu-ray Disc support soon, and we have real reason for that belief, not the least of which is that our sources in this situation are second to none – a fact which should be readily obvious by now. Announcements could happen tomorrow, they could happen next week, they could happen next month. We’d be surprised if it took longer than a month or two. We’re hearing that Universal may not announce until February at the earliest, as we’re given to understand that their contract period with the HD-DVD camp expires at the end of January.

There is even more at the site. Bill is well connected in the industry and he’s had the scoop on a number of issues in the past, so I wouldn’t write off what he has to say too easily. (Via EngadgetHD.)

And the LA Times is reporting that Warner’s move did trigger an exit clause in Paramount’s exclusivity contract with HD DVD.

Warner Bros.’ decision last week to start making movies exclusively for Blu-ray players, rather than HD DVD, triggered an “out” clause in Paramount Pictures’ contract with the HD DVD camp. An industry source said there was a significant possibility that Paramount would exercise that clause. It plans to decide within a month.

It seems they noticed something that I had made note of myself as well:

That enthusiasm appears to be shared by the show’s attendees, who flocked to the numerous Blu-ray displays on the show floor. The numbers were noticeably thinner at similar HD DVD displays.

The Blu-ray and HD DVD pavilions are neighbors – right across from each other. When I hit them on Tuesday I found the Blu-ray pavilion jam-packed. Just navigating through it was rough because of the people packed in watching all the demos, talking to reps, etc. And when they ran their regular demos, on a sweet 103″ Panasonic flat panel, they were well attended, with pretty much all the seats full and people standing around the edges. It was very lively and the energy level was up, even though it was late in the day and everyone was pretty tired by that point.

Conversely, the HD DVD pavilion felt like a ghost town. It was mostly empty. People just kind of meandered around – wandered in and out. There was nothing exciting to see. Unlike Blu-ray, showing off a slew of upcoming players, demos of upcoming titles, etc, there was nothing new in the HD DVD booth. The players on display were existing units. Frankly, the booth was boring. The energy and excitement level was zero – and it was very noticeable with the noise of the BD booth clearly audible from across the way.

To rub salt in the wound, just by coincidence (I asked) the demo area of the BD booth, with that 103″ screen, pointed right at the HD DVD booth. So the entire show all the demos BD is running on a regular basis are blasting the HD DVD booth. Ouch.

New Line has not only announced that they’re going Blu-ray exclusive, but it is effective immediately. All of their announced future HD DVD releases have been canceled. And their sole existing HD DVD release, Pan’s Labyrinth, will cease manufacturing and once existing stocks are depleted it will no longer be available. Via High-Def Digest.

Digital Playground, an adult film studio which only recently went neutral from being HD DVD exclusive has decided to fully back Blu-ray along with HD DVD on all of their high-def releases“until there is a clear-cut winner” according to a statement made before Warner’s announcement. One has to wonder if, in light of the announcement, they might consider Blu-ray a ‘clear-cut winner’ at this point. CE Pro via EngadgetHD.

And the Times Online out of the UK is reporting that as many as 20 of the studios that are part of the HD DVD Promotion group are looking to have their names removed from the roll.

Pony Canyon, a major Japanese music, animation and film studio and part of the giant Fuji Television media empire, said that although it was currently part of the HD-DVD Promotion Group, the decisions of US studios meant it would “choose Blu-Ray in the end”.

Several other Japanese firms – including content producers and electronics component makers – said that their support of HD DVD was “under review” and that they knew of many others in the same position. Others, who admitted that they had previously been waiting for “clear market momentum”, said that it had now probably arrived.

I think we’ll be seeing more HD DVD studios going neutral, as well as out-right defections by both HD DVD and neutral studios to the Blu camp now, especially if Paramount returns to being neutral – definitely if they go fully Blu. At this point any party who really wants to end the war should throw their weight behind Blu-ray. If studios, retailers, rental chains, etc, shunned HD DVD it would be hastened to its end. Times Online via AnimeOnDVD.

While this is happening, Microsoft seems to be hedging their bets with respect to the Xbox 360. They seem to be softening a bit toward the idea of the Xbox 360 supporting Blu-ray via an add-on drive:

“It should be consumer choice; and if that’s the way they vote, that’s something we’ll have to consider,” Albert Penello, group marketing manager for Xbox hardware, said when asked whether Microsoft would support a Blu-ray DVD accessory in the event that HD DVD failed.

I think they’re setting the stage to hedge their bets in case HD DVD does fail, as is looking likely. They can soften their stance, and then they won’t look as bad if they start supporting Blu-ray. From CNET News.com.

That’s unsurprising, but it is nice to have it confirmed. Now they can get to work on the super-deluxe Lord of the Rings Blu-ray collection, right?

Via EngadgetHD.

“The packaged media business is a $42 billion dollar business worldwide at the retail level, and we [Warner] have the largest market share of anybody,” said Tsujihara. “From our perspective, the most important piece of this whole puzzle is, “How do we get growth back into this category?” That far outweighed anything else.”

This [decision] was one hundred percent around what makes the most sense for the consumer, the retailer and the industry. This was not a bidding war. This was all about what was best, strategically, for us.”

Personally, even if there was a payoff, I don’t have a problem with it. That’s business. I don’t blame the HD DVD camp for buying loyalty either. That’s also business. It happens all the time, very few alliances happen in the business world without some financial compensation being involved.

In related news, Warner says their announcement does not cover New Line, HBO, or BBC titles, and that those studios will make their own decisions, likely soon.