I don't really see the link between HD-DVD and Blu-ray inventory myself. Certainly Beowulf on HD-DVD will rent more and make more money than half of their current DVD inventory.

But this has gotten me worried enough to move up some of my HD-DVDs in my queue. I've had titles like Sneakers, Pianist, Bone Collector, Sea of Love, etc, sit near the bottom of my queue since I've seen them before on regular DVD. But if the titles are going to disappear, I'd rather see them in high-def now rather than risk not see them in high-def for years before they show up in blu.

Well what about expectation of return-on-investment? If they believe that HDDVD's days are numbered (and maybe have some inside info about future announcements) then they have to consider how much those discs would be rented. Given the higher cost of hidef discs, they probably figured that it was better to have a greater quantity of blu-ray discs than split the quantity between the two formats.

They're not taking the hidef disc format war personally. They're making business decisions based on what is best for them.




Does this signal the end of being surprised by future "Blu-ray only" announcements?

Netflix did not make this decision on their own. What comes to mind, is a group of movie studios doing a teleconference, and the Netflix execs were on the receiving end. The movie studios said, hey, we're not making as much HD DVD quantities now, so your cost is going to go up if you want to have them. We also will not credit you for lost/damaged discs as our stock will be depleted. You have a choice. Pay higher prices from us, or drop HD DVD altogether and get an even better discount on Blu-ray movies.

It sucks, but I've kinda seen this happening. I was expecting this announcement in late summer, though. So, something is reving up. I expect some announcements from movie studios who haven't commented yet within a month.

Actually, if you've participated in the HD Talk forum for the last several months, this is not the case. However, we HD DVD owners do have a rather valid case against particular companies strangling the market, and using questionable tactics to defeat the competition. We aren't anti-Blu-ray. In fact, most of us HD DVD owners are dual-format supporters. We are just extremely not enthusiastic about this whole format "decision" that is taking place.

I don't think that's true. If anything, we've had Blu-ray comments being deleted and Blu-ray supporters banned. And we still have snippy comments from users here still whenever an HD DVD title is released, or if there is even an HD DVD bargain in the bargain forums. If you don't know who or where these comments are, then you haven't been paying attention like your post implies you have.

HD-DVD is the Mike Huckabee of the HD war.

This is nothing but good news for the mass adoption of physical HD media.

For a moment I thought the same. However, we have to remember manufacturers across the world, are changing. Slowly, but changing nonetheless. HD DVD is slowly being phased out. In fact, it wouldn't surprise me if WB and other movie companies speed-up the HD DVD Phase Out.

As I said above (or just recently), Netflix was more than likely informed their stock of HD DVD movies was going to be virtually eliminated. Why? Well, two factors. And this wasn't in the other post I made. 1), you have the manufacturing phase out of HD DVD machines, but 2) the HD DVDs pressed will get much more profit if they are sold on the retail market. Netflix gets a good cut on the cost of the HD DVD media because they buy in bulk. Well, this isn't happening anymore for HD DVD, so Netflix figures, hey, why pay more for a product that is being phased out? Second, the movie studios want all their HD DVD product to go straight to retail.

So, right now, it has nothing to do with HD DVD demand (read that again folks, because your "choice" of HD formats doesn't exist), but more on the supply side.

I'm not sure about Blockbuster still getting HD DVD titles, but if they are, this would be very interesting. However, I suspect they will announce something similar in the following weeks.

This makes sense.

Even without HD-DVD, Blu-ray still has competition from upscaled SDVD. And now that I've dropped Blu-ray from my account, SDVD will be my focus once again.

The problem is we have flip-flopping movie studios who give the HD consumer the wrong impression. And this has been happening a lot just over the last year.

For example, if you have Warner Brothers, who was all but going to stay with two formats, and Paramount and Universal, you'd be knee-high in HD DVDs. And rightfully so. Because the studios said they would. And even when talking with WB support, they still say they will be supporting both formats into 2008. Now, WB comes in the first of the year with a surprise announcement. So, you've stocked up a shitload of HD DVDs because Paramount and Universal said they were exclusive (and WB) and then WB announces it's going Blu-ray. And now Uni and Para are waiting behind the bushes, just waiting to flash oncoming HD DVD owners.

I mean seriously, the confusion was not because of two formats. From what I can tell, the HD consumer was doing just fine. Thank-you very much.

The confusion was because we had these movie studios saying one thing, then doing another, confusing the consumer. And I'm sure we'll see even more of it, even with one format.

And another thing, the HD Industry altogether, is doing the shittiest job of educating the consumer ever. They should be ashamed.

Well, I'll start off by saying that I'm a long time supporter of both formats. I've been renting from Netflix for a little over a year now, and I understand their move. They know HD-DVD is dying, so they send out an email saying that they aren't going to support that format anymore...BRILLIANT!! Now everyone is going to move all of their HD-DVD titles to the top of their queues, so they (Netflix) will really 'get their money's worth from titles that may have been stagnant. Just look through this post, alot of people are saying they just moved older HD titles up so they can see them in HD before they're gone.

My point is, with that kind of email, they get their final boost of cash from the HD format, then they'll probably sell off those titles, making even more money. Had they waited for the true end of HD-DVD, there would've been alot of people that sold their players by that time, or just lost interest in a dying format, thus causing these titles to just collect dust on their shelves.

Look how many of us have dumped DVD's on Ebay because we got a tip that a new DasBoot-Directors-ultimate edition was coming out. We wanted to get top dollar before no one wanted the crappy older version...this is basically what the 'Flix is doing, getting top rental dollar before people lose interest.

I am more curious as to if they will have a big sell near the end - if so, count me in. As for the long wait time on HD DVD's, I haven't personally experienced this. I am a purple renter / buyer, but my experience with Netflix has been great on the HD front.

Still, this is just another nail in the coffin. I doubt there is any kind of secert payoff.

Maybe we should just start keeping all our HD DVDs we get from Netlfix.

No need for profanities..but his reply does fall under the teenage-like antics my earlier post was referring to. No one's soothsaying..it's just ridiculous to leave NF for this decision. They're bringing HD media to the rental market for God's sake. Support them. Perhaps we should run a new poll with all those running to BB now..let's see how many return to Netflix.

I like my HDDVDs but no way in hell does NFs decision to go Blu mean I (or others) should leave NF. It's silly.

Work with me for a second...

If

a)I were using Netflix to primarily rent HD DVD discs

and

b) Netflix stopped carrying HD DVD discs

then would not

c) I stop using Netflix

logically follow?

And if you follow my logic..you'll be back with NF. ;-)

I can't imagine Netflix loses money on HD DVDs. If they really aren't being rented, just buy less of them. I mean if you can stock obscure DVDs as part of your business plan, a few hundred HD DVDs is a drop in the bucket.

Unless they got a payoff to switch, I can't see the business sense. But that's my 2 cents. The good news is that I don't see and HD DVDs in my cue, although I did want to see a Bee Movie. Not enough to buy it, but enough to rent it. I'll have to see what I want to do regarding that title.

My next billing cycle is on the 22nd, I have every intention of cancelling on the 21st.
However, if for some reason I forget to cancel, I've already flagged my account to be downgraded to 1 out at a time.

But that's the issue here. Netflix probably got notified their prices would increase dramatically, even if they bought LESS HD DVDs. So, Netflix just said screw it, and went with the format which would cost them less.

Does it really matter? They charge the same for whatever rental plan, so pushing people to Blu-Ray doesn't make them money.. It just converts a DVD renter to a Blu-Ray renter. Unless they do raise prices for Blu-Ray. Then they actually ahve an incentive to make people upgrade.

But, why do you think they wouldn't just not bring in new titles, but to say specifically that any HD-dvd's in your queue will be down-graded to standard dvd.

Why not keep what HD-dvd they have and just not bring in new stuff?
When stuff gets damaged or lost, just take it out of inventory once it's gone, it's gone.

Fire-selling all the inventory in February - that's the part that doesn't make sense and that's where they are screwing customers.

* edit I just re-read the email and it's the "saved" area that will be downgraded, and the rest of the change won't happen until close to the end of the year - points are still valid though.

Even if they bought 1 HD DVD, that's at least something and it's out there for renting. I have a hard time believeing they couldn't make money on one HD DVD (or the loss would be so minimal to not really bother with). If there's greater demand, then meet that with a greater supply. There's a market there, and it seems difficult to not make money on it when all the operating costs are more or less fixed anyway.

I still find it a great annoyance. If I could watch everything in HDM on Blu-Ray that would be great. But instead, if I want to watch certain upcoming titles I can either choose to:

1) Drop Netflix for something else
2) Buy the damn thing
3) Get the SD version from Netflix
4) Not watch it

Option three just seems lame with high def media out there, and option 4 is similarly lame if it's something I want to check out. So really I'll have to examine options 1 and 2 a little more.

I found another snippet of information.

Reed Hastings, CEO of Netflix, has partnered with LG Electronics, which will debut a device which streams video directly to your TV, second-half of this year.

LG Electronics is supporting which format? It isn't the red format.

If you look at all the "decisions" being made, they certainly aren't apparently being made because the consumer has spoken. They are being made along loyalty lines.

This is the type of behavior many of us HD DVD owners are very disappointed with.

Combine this partnership with Netflix and LG, and the almost guaranteed increase in HD DVD costs, and you have your answer.

Nice work Columbo.

Exactly. I own both but it seems HD never had a fair shake. Seriously, look at the price of the machines, the features, and even combo discs were a decent idea. Hell even the name to the average consumer should have pulled more weight having DVD in the title. To the consumer, HD should have won out.

I see that, but that's like saying they should phase out their documentaries and independent films because they don't rent as well as the blockbusters. From a consumer standpoint, it's kind of annoying when you have less choice. And what's the difference between a copy of an HD DVD title wearing out and a BD title wearing out? Well, if they are having to replace HD DVD titles at a greater rate due to lack of "hard coat" protection, that's a legitimate issue.

I can understand not carrying a title on both HDM formats, but there are plenty of exclusive titles out there, and more to come. I just hope this is a calculated move to put pressure on Universal and Paramount to end the format war as soon as possible.

It just seems to me that this is like a grocery store thinking that getting rid of Dr. Pepper in favor of more Coke or Pepsi would increase overall soda sales.

This is a great analogy. I also agree that a large part of Netflix's market is the obscure.

Fear not, a two-tiered pricing structure may be on the way:




ERIK GRUENWEDEL
Home Media Magazine
February 6, 2008

Netflix Inc. CFO Barry McCarthy said the online rental pioneer would consider raising the price for high-def DVD rentals if a clear winner emerged in the format war between HD DVD and Blu-ray Disc.

Speaking Feb. 6 at an investor conference in San Francisco, McCarthy said cable channels charge premiums for HD content, a strategy Netflix could emulate once a high-def packaged-media winner was established in the market.

'If a winner emerges in that format war and a large percentage of the subscriber base rents HD DVD or Blu-ray … then we will weigh options for increasing the price,' he said. 'First someone needs to emerge as the winner.'

McCarthy said the online DVD rental business has continued to grow despite reports of the decline of packaged media.

He said with 100 million DVD players in U.S. households, consumption of disc entertainment was not going away.

'If you think they are going to stop renting DVDs tomorrow, you really need to lie down until that thought passes and you wake back up,' McCarthy said.

He said online streaming of movie rentals remains largely an incremental business, which he said played into Netflix’s business model aimed at offering both electronic and physical product.

The CFO said for electronic rentals to erode DVD rentals consumers must be able to access content directly to the TV, not the PC, and there must be widespread access to studio content.

McCarthy said implementation of such services require an open operating system and inexpensive hardware, both of which he said do not exist.

He cited Apple TV and Amazon’s Unbox, in addition to a pending Netflix-enabled set-top box from LG Electronics, all of which he said would not achieve consumer adoption as quickly (five years) as DVD players did.

'It is a long time coming before we have critical mass and DVD titles available for online distribution,' he said.

He said the jury was out regarding how big the online DVD rental market can be. The CFO said Netflix would top 8 million subscribers this year and expectations are from 12 million to 20 million subs by 2012.

He said streaming of rental movies, including the company's Watch Now service, remained an experiment.

'The business definitely is in transition,' McCarthy said. 'The important question is: Can we make money at it?'