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HD DVD launch is no smooth ride for US retailers

With only weeks to go before the first HD DVD players and movies are due to hit stores, US retailers are finding information about the launch sketchy and, when it is provided, often contradictory.

As a result, even some stores recruited by format-backer Toshiba to participate in the kick-off are finding it difficult to put together a coherent merchandising strategy for the new high-definition format. “We’re getting different stories,” said one entertainment spokesman. “We had two vendors within two hours tell us two different things about the availability of [high-def products]. We do sell some hardware, and we’re trying to get hold of some of the players.

Although the initial rollout is planned to target electronics retailers more than entertainment specialty retailers, even some hardware outlets are finding information scarce. They believe customers will be more confident about buying a player once they’ve seen the software available for it and think studios should be bundling players with free HD DVD software, similar to how studios launched the standard DVD format.

Toshiba kicked off a 50-city retail demonstration and promotional tour for HD DVD on 21 February. The first 10 markets on the tour are New York, Boston, Chicago, Washington, Miami, San Francisco, Seattle, Los Angeles, Dallas and Atlanta.

Although the demonstrations have been well-reviewed by many home theatre enthusiast websites, the only content available to demonstrate the new players at the events has been a promotional disc put together by Toshiba featuring clips of Warner Home Video’s Dukes of Hazzard and Universal Studios Home Entertainment’s King Kong.

The first batch of Warner titles are scheduled to street on 28 March, the same day the players officially go on sale. Plans call for the limited number of discs available at the launch to be allocated primarily to retail outlets stocking the hardware, but two weeks into the road show, retailers were yet to be told how many discs to expect, when they might arrive and what the suggested list prices will be. Store managers believe the absence of complementary software is undermining the promotional hype.

Following several Toshiba events, some retailers have pre-orders for HD DVD players, but are unable to take pre-orders for the software because details have yet to be provided by Warner. As of last week, Wal-Mart, through its website, was one of the few retailers taking pre-orders for Warner HD DVDs, despite Warner’s plans to restrict the software to hardware outlets - doesn’t appear to be taking pre-orders for Toshiba’s HD DVD players. The majority of posted titles, including Warner’s initial March 28 wave Batman Begins, Twister, Lethal Weapon, Constantine, Million Dollar Baby, among others, are listed at $29.98 but is selling each at $25.48.

Hardware retailers are blaming the studios more than Toshiba for the lack of coordination as Toshiba is definitely supporting the events with people and marketing help. Entertainment specialty retailers acknowledge they are not a priority for HD DVD. But stores are nevertheless upset by the lack of information from studio reps. Several retailers are planning to conservatively stock first high-def titles once they become available and seem measured about consumer reaction.

Story filed 12.03.06

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