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High-definition accounts for less than 1 percent of total movie rentals

Ever since the launch of the PlayStation 3, high-definition movie retail sales have steadily tipped towards Blu-ray Disc’s favor. Throughout 2007, sales of Blu-ray Disc movies typically doubled those of HD DVD.

Although software sales are a good measure of a format’s popularity, not every consumer chooses to purchase a movie he or she wishes to enjoy on any given evening or weekend. Those who don’t see the sense in spending $20 to $30 for a single viewing usually turn to rental options.

For HD DVD hardware owners, rental options became more limited after Blockbuster announced in June 2007 that it would carry only Blu-ray Disc movies in most of its brick and mortar outlets. Besides turning to independent rental shops, fans of the format resorted to online rental services such as Blockbuster By Mail and Netflix.

Early last week, Netflix announced that it would also cease stocking new HD DVD titles and would concentrate on Blu-ray Disc as being the high-definition format of choice. Meanwhile, Blockbuster told customers that it would continue to stock titles new and old on HD formats for its mail rentals.

“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.”

Netflix did not disclose, however, its own customers’ rental preferences between the two competing high-definition formats.

Zip.ca, Canada’s largest online movie rental company, shared with DailyTech its shipment numbers over the last 18 months – with particular focus on high-definition rentals.

Unsurprisingly, HD DVD and Blu-ray Disc rentals combined account for less than 0.87 percent of all shipments by Zip.ca since mid-2006.

4,232,693 standard definition DVDs were shipped to Zip.ca customers over the last 18 months, making the 19,495 HD DVD and 17,611 Blu-ray Disc shipment totals appear virtually insignificant.

Zip.ca’s director of communications Shelagh O’Connor explained that the company has shipped more HD DVD than Blu-ray Disc due to the former format’s stronger start. “HD DVD came out of the gate stronger than Blu-ray,” O’Conner wrote, “but since December (when we shipped almost equal amounts of each) Blu-ray has outshipped HD DVD in the past two months and is gaining momentum.”

The Canadian rental firm’s statistics for 2008, however, show a clear shift towards Blu-ray Disc. In January, Zip.ca customers rented 2,712 Blu-ray Discs and 2,262 HD DVDs. The trend became even more apparent in the first half of February, with 1,684 Blu-ray Discs compared to 1,024 HD DVDs.

Even with the evident change in consumer preference in action, Zip.ca says that it has no plans to follow in Netflix’s footsteps of dropping HD DVD. “It is Zip's mission to provide customers with ALL the titles released in ALL three formats - DVD, Blu-ray, and HD DVD,” Richard Anderson, president and CEO of Zip.ca, told DailyTech. “We will continue to do that so long as there is reasonable demand for each of them.”

“Having said that, we decided at the beginning of this year that Blu-ray is in the process of becoming consumers' preference between the two hi-def formats,” Anderson continued. “We did so based partly on external industry trends and data, fortified by our own own customer data, which has shown HD DVD's early rental lead steadily eroded over the last 12 months, with Blu-ray emerging as our customers' preference in recent months, and with seemingly-strong momentum towards a widening preference.”

While Zip.ca has no intention of leaving its HD DVD customers out in the cold, the company is already bolstering its Blu-ray Disc inventory in expectance of a high-definition format resolution and growth. “As such, we are now aggressively over-investing in Blu-ray inventory – meaning buying more than we need, strictly speaking, right now, in the belief that it will have a long and growing demand,” added Anderson.





"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins



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