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published:
15-Feb-08
territories:
USA
categories:
General market development
Netflix adds its support to Blu-ray
US online DVD rental giant Netflix has taken the first step towards Blu-ray Disc (BD) exclusivity, announcing it will no longer be purchasing titles on HD DVD. It will continue to rent out HD DVDs it has already acquired but with a view to phasing out the format by end 2008. Netflix cited the decision by four of the six major studios to release hi-def content on BD only as a factor in its move, asserting that it expects all the major studios to support BD. Netflix - which currently stocks over 400 BD titles - also claims that of the small proportion of its subscribers that have moved up to hi-def discs, the majority have chosen BD over HD DVD.
This announcement follows positive results for Netflix, according to its fiscal 2007 year-end report, which showed its subscriber base increasing by 18 per cent to 7.5m and revenue rising by 21 per cent to $1.2bn. It expects to generate revenues in excess of $1.3bn in 2008 and grow its subscriber base to more than 8.4m. Netflix's board of directors subsequently authorised a $100m stock re-purchase programme, enabling the company to buy back common shares during 2008.
Our take...
Netflix's support for BD is another in a growing list of endorsements for the format, following Warner's decision in January 2008 to switch from a format-agnostic position to one of exclusive support for BD. Recognising that BD is in the ascendancy, the rentmailer appears to be seizing the opportunity to help tip the scales in the format war. The rationale behind Netflix's decision lies in the logistics of supporting a single format versus continuing to back both. By backing BD, Netflix will be able to invest what it would have spent purchasing HD DVD units in a deeper BD inventory, enabling it to deliver a better service for its BD subscribers.
A victory for BD - which now seems inevitable - may have further implications for Netflix subscribers, as the company has reportedly stated that it would consider charging a premium for hi-def disc rentals if a clear winner emerged in the format war.
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Analyst, market intelligence & notices
Reports
Articles
DVD manufacturing-on-demand
DVD replication is suited to the on-demand model. Burn times have been reduced and the cost of components has fallen, so it is now a relatively quick and affordable procedure. The development of selfcontained replication units has made it possible for DVDs to be manufactured on-demand, and on-site, in retail stores and warehouses.
published:
23-Apr-08
territories:
Italy, France, Germany, UK, Spain, USA
Marie Bloomfield
Warner changes hi-def landscape
Warner's intention to switch to 'exclusive' support is a coup for Blu-ray Disc and a blow for HD DVD, and might signal the end of the format war
published:
23-Jan-08
territories:
USA - World
Richard Cooper
Bundled discs to drive hi-def sales
As the market for high definition DVD settles down we expect the balance to even out with a modest advantage in favour of Blu-ray
published:
01-Dec-07
territories:
USA - Central and Eastern Europe, Nordic Region, Western Europe
Evi Choursanidi
DVD hardware overtakes the VCR
World DVD installed base outnumbers VCRs for first time
published:
01-Nov-07
territories:
Australia, Austria, Belgium, Brazil, Canada, China, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea. Rep [S], Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Portugal, Russian Federation, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand, UK, USA - Asia-Pacific, South and Central America, Central and Eastern Europe, Europe, International (exc.US/Canada), North America, Western Europe
David Scott
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Western Europe
Hardware Households
