Netflix, Citing a Clear Signal From the Industry, Will Carry High-Def DVDs Only in Blu-ray Format

BEVERLY HILLS, Calif., Feb. 11 /PRNewswire-FirstCall/ -- With the industry now having picked a winner in the face-off between the two competing high- definition DVD formats, Netflix, Inc. (NASDAQ: NFLX), the world's largest online movie rental service, today said that it will move toward stocking high-def DVDs exclusively in the Blu-ray format.

Citing the decision by four of the six major movie studios to publish high-def DVD titles only in the Sony-developed Blu-ray format, Netflix said that as of now it will purchase only Blu-ray discs and will phase out by roughly year's end the alternative high-def format, HD DVD, developed by Toshiba.

Since the first high-definition DVDs came on the market in early 2006, Netflix has stocked both formats. But the company said that in recent months the industry has stated its clear preference for Blu-ray and that it now makes sense for the company to initiate the transition to a single format.

"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."

Added Mr. Sarandos: "From the Netflix perspective, focusing on one format will enable us to create the best experience for subscribers who want high- definition to be an important part of how they enjoy our service."

While only a portion of Netflix subscribers have elected to receive high- def DVDs, a majority of those subscribers have chosen Blu-ray over HD DVD. As part of the transition to Blu-ray, the company said it will acquire no new HD DVDs but that its current HD DVD inventory would continue to rent until the discs' natural life cycle takes them out of circulation in the coming months.

When Warner Home Video announced last month that by the end of this year it will release high-def titles exclusively in the Blu-ray format, it joined fellow majors Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment and Buena Vista Home Entertainment in endorsing Blu-ray. Currently, the two remaining majors, Paramount Home Entertainment and Universal Studios Home Entertainment, publish in the HD DVD format.

Netflix currently stocks over 400 Blu-ray titles, having recently added popular releases such as "Across the Universe" (Sony), "Gone Baby Gone" (Buena Vista) and the Academy Award nominated "Michael Clayton" (Warner Bros.). Blu- ray titles scheduled for release in the next month or so include the Academy Award nominated "No Country for Old Men" (Walt Disney), "Walk Hard: The Dewey Cox Story" (Sony) and "Alvin and the Chipmunks" (20th Century Fox).

About Netflix

Netflix, Inc. (NASDAQ: NFLX) is the world's largest online movie rental service, providing more than seven million subscribers access to more than 90,000 DVD titles plus a growing library of more than 7,000 choices that can be watched instantly on their PCs. The company offers nine subscription plans, starting at only $4.99 per month. There are no due dates and no late fees -- ever. All Netflix plans include both DVDs delivered to subscribers' homes and, for no additional fee, movies and TV series that can be started in as little as 30 seconds on subscribers' PCs. DVDs are delivered free to members by first class mail, with a postage-paid return envelope, from over 100 U.S. shipping points. Nearly 95 percent of Netflix subscribers live in areas that can be reached with generally one business day delivery. Netflix offers personalized movie recommendations and has two billion movie ratings. For more information, visit http://www.netflix.com/.

SOURCE: Netflix, Inc.

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.