Blu-Ray/HD-DVD (Marketing Perspective)

Doug Miller

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There are threads here, there, and everywhere about the differences between BD/HDDVD on machines, playback quality, and every little nitpicky thing about the formats. One thing that's been neglected has been the marketing angle.

This last week has really felt like a seperator for the formats. HD-DVD took an early lead with an outstanding price point and a good selection of library titles. Blu-Ray always seemed like the outside looking in, I really questioned if Blu-Ray was going to be a market force or not. This last week really answered it. I have seen more marketing focus on Blu-Ray this last week than HD-DVD over the last year.

- 20% off all Blu-Ray titles at Target this week bringing most releases to $23.99 or under.
- I've been in Best Buy, Circuit City and Sears. Every retailer had a brand new Blu-Ray merchandise displayer in their aisles. I did not see a single HD-DVD displayer.
- Promotion and press brought on the PS3 all week, with the "and it even plays Blu-Ray" at every turn.

Please don't call it a "conspiracy" against HD-DVD. To say that retailers would conspire against a format is ludicrous. Oh, Best Buy didn't put out an HD-DVD, but had out the Blu-Ray, it must be a conspiracy. Call it poor marketing by HD-DVD. Blu-Ray sent retailers the in aisle displayers -- Best Buy doesn't pay for that. In a week filled with positive Blu-Ray press, HD-DVD needed to seperate itself in the market. How could they have done that?

What HD-DVD should have done:
- Rebates. Rebates is the current fashion when it comes to retailing. they needed to market their own rebate, or better yet, subsidize rebates through key retailers.
- Align itself with a key retailer. Just because there's not a "conspiracy", doesn't mean there isn't a preference. Is it obvious that Best Buy favors Blu-Ray? Sure, but I'm also fairly sure they're paid to. What's stopping HD-DVD from going to Circuit City or Sears and putting out there that "Circuit City is the official home for HD-DVD"?
- Key product launch. This was the only thing they did half right this week, but it was only half. Xbox's HD-DVD add-on with free King Kong! Awesome, so why wasn't there advertising everywhere for it? Where's their front page in circulars, where's the stocked merchandisers of the add-on with HD-DVDs next to it? And just as important, they needed the A2 to be out NOW, not in December.

This has been a big week for Blu-Ray. I know you're looking at the above and potentially thinking, huh, that doesn't seem like that big of a deal, but I think in the long run this was a big plus for Blu-Ray.

I will close with this, however. Until I see Costco carrying Blu-Ray or HD-DVD, both formats have a long road ahead of them.

Doug
 

ppltd

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For most cases, you are absolutely right. The company's that spend the time with the retailers tend to get the best displays.

With BB, Pioneer had spent the time to set up displays of their new BD player attached to their new 1080p plasma a month and a half before the player was expected to hit the market. That is smart business. The HD camp is dropping the ball on this.
 

Larry Sutliff

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One other problem for HD DVD right now is that the G2 Toshiba players have been delayed. That wouldn't be such a big deal except for the fact that Toshiba has already stopped making the G1 players, meaning that there may not be enough standalone players in the marketplace for the holidays. The 360 add-on will help, but Toshiba really dropped the ball big time. I want HD DVD to do well, but IMHO this is a serious setback.
 

Dan Hinson

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Best Buy and other retailers have been focusing largely on Blu-ray in their print-ads. I am curious, how many of these ads are a result of the manufacturer paying them to do this, versus Best Buy (and others) choosing on its own to heavily tout Blu-ray?
 

AaronSCH

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con·spir·a·cy: A joining or acting together, as if by sinister design: a conspiracy of wind and tide that devastated coastal areas.

The word conspiracy also has a number of meanings that imply illegal actions for subversive purposes. However I think its usage here is quite correct when you consider the words "as if by."

Best Buy and Circuit City have been very sheepish in their promotion of HD DVD product over the last few months. Period. That may be Toshiba's fault but I suspect it has more to do with the fact that there has been quite a bit of arm twisting from Sony leading up to the launch of both Blu-ray and the PS3. Best Buy has as much riding on the success of Blu-ray as the manufacturers that jumped on board. The vast majority of their vendors are in the Blu-ray camp. The Sony/PS2 juggernaut has been a financial cash cow for Best Buy and it's continued success represented by the PS3 means more revenue across the board from continued growth of software sales (both games and movies). As we approach the launch of the PS3 you will see Blu-ray all over the place and HD DVD pushed even farther to the sidelines. Personally, I think any attempt by Toshiba to counter the PS3 advertising blitz would have been lost in the shuffle. They know there are a very limited number of PS3s available for the holidays and are likely waiting for the dust to settle. I am hoping their decision was to pick their battles carefully and it just represents marketing saavy.
 

TravisR

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I completely agree. You could have the greatest product in the world and you'd just be wasting money trying to steal Sony's thunder right now. After the PS3 has been out for a little while and the buzz has died down is when they'll start their own publicity up.
 

Dave W

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I have been personally told on numerous occasions and at numerous retailers that the discrepancy in store space and promotion for Blu Ray over HD-DVD (and Sony specifically) is because they are spending more money on marketing in-store. This is in line with the general sentiment of this thread in that the HD-DVD camp is not spending the money for in store displays that Blu Ray is. The store manager at my local Best Buy told me bluntly (after my complaining about them being constantly out of stock on HD-DVD) that their sales of HD-DVD titles were better than Blu Ray but, his directive from corporate was to push Blu Ray for the PS3 release. Whether any of us feel this is right or wrong, annoying or vindicating - whatever it may be, I believe this to be true and that most stores are betting on Blu Ray because of the Playstation 3. I feel the HD-DVD camp needs to increase their in store marketing to combat this, otherwise consumers looking to move to HD on disc may not even be aware of HD-DVD and think Blu Ray is the only format available. Regardless, I simply don't shop at BB for HD-DVD titles anymore. They are too easy to find (at the same price or an even better buy < natch >) elsewhere and IMO sales will be the determining factor when all is said and done.
 

Doug Miller

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Aaron --

bi‧as  /ˈbaɪəs/ Pronunciation Key - Show Spelled Pronunciation[bahy-uhs] Pronunciation Key - Show IPA Pronunciation noun, adjective, adverb, verb, bi‧ased, bi‧as‧ing or (especially British) bi‧assed, bi‧as‧sing.

2. a particular tendency or inclination, esp. one that prevents unprejudiced consideration of a question; prejudice.



Doug
 

AaronSCH

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LOL ... So? I just happen to like my HD DVD as much as my dictionary...
 

Austan

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There's no con·spir·a·cy!!! You have to pay for that shelf space... It's up the the product manufacturer to promote their products and not the the Retailer... If the Blu-Ray camp has spent the money for the shelf space then the retailer is obligated to give it to them. It's not management that picks which product to display. So there no management agenda to push Blu-Ray. I guess next time I fly coach on an airline I'll complain about the "First Class" conspiracy, Why do they get all the best seats, "best" food and best service??? It must be those pilots telling the crew to favor one group of passengers over the other...

It's called bossiness practice... Every product that is on an end cap pays a premium, Every product that has a display or demo pays a premium. That's the bread and butter for retailers. Take a look at the top right hand corner of this page... I wonder how much that banner costed HTmarket.com? Or is it another conspiracy? Must be a directive from Ronald Epstein forcing his webmaster to push HTmarket.com over Amazon..com...

FYI: The banner changes, it was HTmarket.com when I stared this post...
 

AaronSCH

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Did you actually read the definition of conspiracy or just attach your own meaning to the word? I clearly state that there are a number of factors that motivate a retailer to promote one product over another and what would motivate a store like Best Buy to favor Blu-ray. That space is absolutely not always purchased and is arranged at the discretion of the retailer.
 

PeterTHX

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Well, marketing wise this is what happens when one manufacturer pretty much pushes a propietary format (for all intents and purposes) against the rest of the industry who supports another standard.

Same thing happened to the PSP as a film format.
 

AaronSCH

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I agree Peter, but which manufacturer pushed the proprietary format? I hope you meant Sony because I thought the DVD Forum had agreed that HD DVD would be the standard for the industry.
 

Edwin-S

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Blu-ray can hardly be called a proprietary format, since it is being supported by most major electronic manufacturers. Whether you like it or not it is Toshiba's HD DVD format that is proprietary at this point in time, regardless of any proclamations from the DVD forum: a forum which, as I understand it, was basically dominated by Toshiba and Warner.
 

PeterTHX

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Um, no they didn't. The Forum is a hollow shell of itself (and Toshiba chairs it, naturally). Just ask those who walk into a store and go "do I buy the DVD-Rs? Or the DVD+Rs?" The BDA is composed of most of the major electronics makers and they boycotted the vote on HD DVD.
 

Doug Miller

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Aaron --

Peter is right, HD-DVD is absolutely the proprietary format. Look at the number of software and hardware manufacturers. HD-DVD is on it's own private island. It's a pretty island, filled with beautiful women and bottomless margaritas, but its own island nonetheless.

Austen --

Aaron is right on who owns promotion space/endcaps/etc. Yes, it's not unusual for a manufacturer to purchase a key endcap or merchandise experience, however it is not the norm. I would say that less than 10% of merchandising space is designated for "influenced" merchandise -- it's probably less than 5%, but for the sake of arguement I went higher.

Doug
 

Austan

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Floor space is another means of income for Brick and Mortar. Every location in a store has a price and every last bit of space available is for sale. Manufactures jockey for those prime spots.

I guess Houston really loves Minute Maid, because and entire Baseball Stadium has it plastered all over the place. No one is pushing any product. Retailers sell those spots to the highest bidder. Toshiba is going solo and doesnt have the budget. No money = no end caps... That's as simple as it gets...
 

BrettB

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I saw a commercial for tomorrow's release of Ice Age Meltdown numerous times over the weekend that only mentioned 'on DVD', absolutely no mention of Blu-ray. What the heck are these people thinking?
 

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