Format war a dead heat at Netflix
by Steven Kim 
posted Aug 28th 2007 at 11:31AM
Retailers are on the front lines in the HD DVD vs. Blu-ray format war, and Netflix is seeing an even match between the two camps so far. According to Netflix CEO Reed Hastings, the total number of HD media rentals there suggest this is more of a "skirmish" than a "war", with the customer demand for the formats amounting to about one percent of total rentals. We don't doubt that the total percentage of HD media is small, but we're a little skeptical about it being an even split between Blu-ray and HD DVD.
Reader Comments (Page 1 of 1)
Calvin @ Aug 28th 2007 11:41AM
Ok I will bite:
What makes you skeptical that it is an even split between blu-ray and Hd dvd
Steven Kim @ Aug 28th 2007 11:59AM
Calvin -- the reason I raise an eyebrow is NOT that everyone here at EHD is sworn to a Blu-ray fanboy oath. Seriously guys, there's big money at stake for all players involved, so skepticism is in order all the way around.
Rather, in light of sales numbers showing Blu-ray sales outpacing HD DVD, it seems a little odd that Netflix does not see a corresponding trend. Are Netflix customers a vastly different kind of customer than HD media buyers in the marketplace?
haveacoke1886 @ Aug 28th 2007 11:50AM
Sure you are skeptical, you are bias toward Blu-ray, and the slightest good news toward HD DVD you become skeptical.
andyg8180 @ Aug 28th 2007 11:59AM
Why are you skeptikal?? I always have at least 1 HD-DVD come in at every batch... I've rented nearly the entire HD collection and i make sure if a new movie comes out, it only hits my queue in HD-DVD format...
Who cares if Blu-Ray outsold HDDVD... If netflix is unbiased and tells you its a dead split... why be skeptical... Netflix never chose sides, thats why they rent both...
Good article gets screwed up with blu-ray fanboy cry baby antics... Why didnt you just keep it simple and take their word for it?
Angelo @ Aug 28th 2007 11:56AM
All this tells me is, only 1% of netflix users queue HD films, that percentage and number is so small, it can be easy for the numbers to be split or close to being split. I'll consider this news/important when netflix says < 40% of our rentals are HD.
Kenzo @ Aug 28th 2007 12:12PM
EngadgetHD wasn't skeptical when Blockbuster spewed unverified propaganda that claimed BD out-rented HD 3-to-1 in stores. Keep in mind, these were Blockbuster stores that weren't updating their HDDVD library. There have been many documented cases of Blockbuster stores having only the early release HDDVD movies, while stocking brand new BD's.
Here comes Netflix that rents online; Free from the issues of having a better selection of movies on either BD or HD; Free from the effect of gamers coming into stores to pick up PS3 games and just picking up BD movies for the heck of it.
So Netflix comes in with data that "SHOULD" be a lot more reliable than Blockbuster's in-store date. And Engadget is "Skeptical". Seriously guys...seriously.
shawnmos @ Sep 3rd 2007 2:39AM
yeah, pretty much. I stepped into one of the Blockbusters that was doing a test run of both HD DVD and Blu-ray and they had virtually no HD DVDs, but had a ton of Blu-rays. Of course I didn't rent any HD DVD movies because there was nothing to rent. Had they actually had a good HD DVD selection I definitely would have rented a couple of HD DVDs.
jake @ Aug 28th 2007 12:15PM
here is an anology for those people hanging on the fence.
VHS : DVD
HD-DVD : Blu-ray
hope this helpz
eddie @ Aug 28th 2007 5:45PM
Me:jake
HDDVD User:BluRay Fanboy
William Buckley @ Aug 28th 2007 12:17PM
I am a bit skeptical too. HD may actually have a slight lead over BR. When I add HD titles to my queue Netflix oftentimes saves them as Blu Ray, so I manually have to go back in and change them to back to HD. I realize that it has something to do with the fact that I own players in both formats, but I prefer the movie experience with HD much better for some reason.
Cam @ Aug 28th 2007 12:31PM
@jake
more like -
VHS : BetaMax
HD DVD : Blu-ray
Big Sam @ Aug 28th 2007 12:32PM
I rent both formats from Netflix, but I have rented far more HD-DVD than I have BluRay.
@William Buckley - I also noticed it will default to BluRay for new movies even though I specified that I prefer HD-DVD.
Patrick @ Aug 28th 2007 12:34PM
1% of rentals is pretty damn good, considering HD titles make up less than 1% of stuff available from Netflix.
@Steven
I agree with the others, your Blu-ray bias shows. Don't HD DVD titles often have better extras? And perhaps the Blu-ray owners (read: PS3 owners) are balancing their time with gaming, as opposed to HD DVD owners, who bought their machine for watching movies, whether rented or bought.
Steven Kim @ Aug 28th 2007 1:06PM
@Patrick:
I agree with you on the extra features. I'm not sure whether it's the tools for interactive and extra content for Blu-ray vs HD DVD, but that's point for the HD DVD format.
WallyB @ Aug 28th 2007 12:34PM
@jake:
Nice propoganda, dude. Here's one for you:
1080p24=1080p24
Save your crap for Blurayfanboy.com. This is a site full of people who actually know something about HD formats.
Puh-leeze.
Xyzzy @ Aug 28th 2007 12:37PM
Why is it that any positive HD DVD news is "desperation" or "skeptical" here, but any positive BD news is "OMG!!! S0ny is teh r0xorz!!!! !!! !!!"
It's getting old. Actually, it was old about 4 months ago.
I really liked this post I saw on AVS Forums. Puts BD in perspective. The short of it is: "In 2006, Fox says 'BD wins in Q4 '06." In Q1 '07, he says, "BD has almost won the format war!" In Q3 '07, he says, "The consumers vote with their wallets... We don't know when the war will end." :D Selective quoting? Probably, but no worse than the Sony spin around here.
------------------------------
July 29, 06 - Mike Dunn (FOX): "First of all, the format war is really only going on in the press. Come the late fourth quarter, starting in November, Blu-ray is going to be showing huge numbers. The early adopter is going Blu-ray, and I think it will be readily apparent to that crucial second tier of consumers that Blu-ray is the obvious choice."
Bold words from a spokesman of a studio that wouldn't even release a single disc for several months.
Jan 12, 07 - Mike Dunn (FOX) - "The format war's in its final phase." Sony revealed at CES that it met its goal of shipping 1 million Playstation 3 consoles to North America in 2006. The company said a survey showed that 80 percent of buyers said they will purchase Blu-ray DVDs to play on their machines.
This was the Electronics Show that featured a barrage of Blu-Ray title announcements (most of which would later be canceled), and the distribution of newsletters claiming "The format war is over -- Blu-Ray wins!" Apparently, Paramount missed the memo. As did the 80% of PS3 owners who were supposed to be buying BD movies...
June 18th, 07 - The question asked is when will the format war end, said Mike Dunn, president of 20th Century Fox Home Entertainment. The answer is when the consumers say its over. The consumer votes with their dollar.
I'm confused now, as I thought a year earlier it was already over. Then I thought this fact was reaffirmed at CES. Am I missing something, Mr. Dunn(ce)?
Posted by Bob Black on AVS Forums:
http://www.avsforum.com/avs-vb/showthread.php?t=897157&page=2
Patrick @ Aug 28th 2007 12:41PM
Ignore Jake...he's a moron.
Jeff N. @ Aug 28th 2007 1:03PM
I thought Blu-ray would win. I now no longer think they will. When Blu-ray had all the studios but Universal they could of flooded the market with Blu-ray titles but it's funny how HD-DVD was right there with them. Now Paramount is only going to release HD-DVD's, they have the 2 top studios, Universal & Paramount and both are very active in releasing High Def discs (Unlike Fox). I am still on the fence to what I will buy. But I was going to buy a Blu-ray player in late November. Now I'm not going to. I will likely either buy a Hybrid player or an HD-DVD player. When I can't say.
And I own a Sony SXRD Hi-Def TV. So I don't hate Sony like so many people do on here.
Kevin Murphy @ Aug 28th 2007 12:53PM
Steve--
Let's say you have HD DVD and you are moderately concerned that Blu will win the war. Wouldn't it make sense to tilt a bit more toward renting disks instead of buying them, so that if Blu did indeed win, you have less invested in discs? Blu-ray owners on the other hand would be a bit more confident and tend to buy more discs.
One of the reasons I've thought Blockbuster management to be a pack of fools, but then they've been a pack of fools for a while.
Steven Kim @ Aug 28th 2007 1:14PM
@Kevin:
Interesting analysis. Even though it's predicated on buyers being a less-than-sure of HD DVD's long term prospects, it could explain discrepancies between the purchase and rental markets.
Tom @ Aug 28th 2007 12:59PM
It would be nice if more data was provided.
Are they counting rentals? Customers who have enabled HD formats in their queue?
How to they count customers who have enabled both formats?
What would be interesting to see from them is number of HDDVD customers/Blu-ray customers/both format customers.
Sales data is good, but it becomes difficult to determine actual number of HDM households due to both multi-player households and the PS3 (which some are HDM watchers and some are not).
A count of their customers by HDM format enabled would probably be a good proxy for the market as a whole at this point.
I doubt we'll see that though because Blockbuster probably wants that information as much as we do.
And while skeptical may be a strong word that seems to have the fanboys up in arms, it is a valid question. Why if sales are consistently 2:1 are rentals 1:1? Netflix may know that too, and it would be nice if they shared. Perhaps people are buying less and less movies these days relying on rentals instead?
I know I purchase less now than I did during the DVD generation. I noticed after collecting hundreds of DVDs that I didn't watch most of them more than once. As such, I now only purchase my absolute favorites.
nigel @ Aug 30th 2007 7:29AM
It's because the early adapters are the ones with the money to purchase, and that has been predominantly BD, because they were under the illusion that blu ray was better quality because it's got a sony label.....WRONG
However, the dirty herd has arrived and they are going to rent HD DVD by the truckload and purchase discs and hardware by the truckload when things are cheap enough, and that wont be long...long live the dirty herd
joe @ Aug 28th 2007 1:04PM
Why is this even a question?
There are less than 1000 titles between HD dvd AND Bluray. I perfer bluray but I'm willing to queue up DVD to get them in less than a year.
Netflix does not have enough copies of HD movies and there are not enough HD movies. So yes it is more than possible for BR to out sell 2:1 because and be even on netflix.
You have a very slim possibility of getting whet you want to see on either format. So 1% seems about right.
Chaz @ Aug 29th 2007 12:11PM
lol more bias reporting... keep it comin'!
Universal+Paramount = HD-DVD ftw
Kevin Murphy @ Aug 28th 2007 1:44PM
@Steven
Another similar point might be that if HD DVD buyers DO buy their players on the basis of price, they might tend to be a bit less well-heeled. This might make them less willing to pay $25-35 for a disc, and rent instead. Especially since there is no premium to rent HD.
Blu-ray owners, willing to plunk down $500 (at a bare minimum) for a player, might be able to buy more movies and have less inclination to rent.
Cyque @ Aug 28th 2007 1:50PM
If you queue a new release on Netflix in HD DVD you are setting yourself up for a long wait. Toshiba HD DVD player is collecting dust because I can't get HD DVDs from Netflix before I get tired of waiting and order the HD movie from Comcast HD On Demand. Perhapse the statistics are skewed by their stocking policies.
JeffDM @ Aug 28th 2007 1:55PM
I can see only 1% of the rentals being HD, I think that's about what the sales are too. The split ratio within that doesn't matter to me.
HD is still a niche, regardless of what people say. Even on OTA TV, the stuff that's in HD is mainly primetime. Outside of that is still ruled by SD. Even for satellite and cable, SD channels outnumber HD by a fair margin, though in these cases, not a 99:1 ratio, more like maybe a 6:1 ratio. HD optical may have stumbling blocks of players still being too expensive, and there's still the question of how many people are avoiding HD optical because there's two formats, even a $100 player might not mean much if that means you are still missing out on 40% of the titles on HD disc because it's in the other format.
JeffDM @ Aug 28th 2007 2:00PM
Joe; your Netflix HD renting experience is not like mine. The only title with a wait was 300 with a "very long wait" notice. I bought 300 for a Rifftrax party and I'll sell it soon anyway. A couple titles did come from other states, but that was only a two day wait, vs. the usual next day. I've been exclusively renting HD titles from Netflix since I resubscribed two three months ago.
joe @ Aug 28th 2007 2:48PM
JeffDM- I do not doubt this. Most of what I want to watch wasn't released in the last 2 years. Pretty much if you want it and it wasn't a recent Blockbuster it isn't available in HD.
The bulk of what I want to watch just isn't on HD content. At the rate that this format war is going I doubt I'll ever be able to watch most of it in HD.
Kumar @ Aug 28th 2007 7:33PM
....I've had 300 in Q since 2 months before it came to hd dvd.
Netflix results are way skewed by lack of availability.
I'd be interested to see rental numbers of people who prefer HD dvd or blu ray, and their rental of titles that are exclusive to the other format (or not on hd/bd yet).
That would be what studios want to see when decided whose content to provide on what format.
LJKelley @ Aug 28th 2007 2:40PM
Have you ever considered since the HD DVD format is cheaper that the consumers of HD DVD are more money aware and thus more likely to rent online from Netflix then buy a film they may only watch once?
Renting makes sense and Blockbuster screwed themselves as I had an account with them but switched to Netflix since I use HD DVD. I have rented quite a few HD DVD titles to watch that I would never consider buying for $20-40.
JeffDM @ Aug 28th 2007 10:59PM
Joe; I misread your comment, I thought you were talking about a long renting backlog, not waiting for the movie to be released in the first place.
Big Sam @ Aug 28th 2007 2:46PM
The only reason I rejoined Netflix was to get HD movies (initially HD-DVD only, now both). But I have noticed lately that many of the HD movies that have been released within the last few months always have a Very Long Wait (for both hi-def formats). I've gotten movies that were 5 spots down in my queue.
Nfinity @ Aug 28th 2007 3:08PM
Seriously, is there ANYONE on Engadget that is remotely objective. Jesus.
There's no reason for you to be skeptical, there's very logical explanation, actually more then one as to why the numbers look like this.
First, HD DVD person bought their player for movies, Blu-Ray person most likely didn't. This is why we've been saying all along that attachment rate MATTERS.
Second, there is much more quality movies on HD DVD than on Blu-Ray. If you have a crap load of movies that suck on Blu-Ray of course people will rent more on HD DVD, especially the ones who have both Blu-Ray and HD DVD in their homes. For example, let's say Spiderman 1 and 2 comes out on Blu-Ray. Most likely people wouldn't rent as they already saw the movie numerous times, however they will most likely buy it. Plain logic.
You say we should be skeptical of these numbers and I say we should be skeptical of 2:1 SALES numbers we've been served so far. You see it goes both ways. If rentals are equal, is it than possible that the sale numbers are not that accurate or not calculate everywhere properly?
With Paramount going HD DVD exclusive I would say that my skepticism is more valid than yours. After all Netflix has absolutely no reason to lie as they rent both, unlike Blockbuster or other heavily endoursed BDA retailers and companies.
I have one advice for you Engadget people. Start being objective and follow through this war in a proper manner and not with Blu-Ray slant as you have from the beginning and you might avoid embarrasment when HD DVD goes for the throat and finally kills off Blu-Ray. We all know how this war will be finished, HD DVD goes mainstream and Blu-Ray becomes UMD part 2 for games on PS3, it's not even a question IF, but WHEN.
@Xyzzy
Are you registered on AVS Forums? If you are not join us, there's a hit list created by Blu-tools from Blu-Ray.com that would love to kill us for destroying their Blu fairytale and opening people's eyes. You'll most likely end up on it as many of us :)
AlanS17 @ Aug 28th 2007 4:10PM
I've got both a blu-ray player and an HD DVD player. I don't own a single disc for either format, though. I strictly rent.
In my Netflix account, I have both HD formats enabled. But for those titles that overlap formats, I always choose HD DVD first.
The reason has nothing to do with image quality (they're the same to me). It has nothing to do with extras (I never watch them anyways).
My reason is very simple. My blu-ray player is a PS3 with a bluetooth remote and my Toshiba HD DVD player uses a standard IR remote. I've been able to reprogram my Logitech Harmony remote to control the HD DVD player, but not the PS3. So the reason I rent HD DVD over blu-ray is basically because I'm a bum. :-)
I'm just glad to know I can grab any HD movie available regardless of the format. It's nice considering Netflix doesn't charge any more for HD movies than they do for SD movies.
Ryan P @ Aug 28th 2007 4:32PM
Maybe Netflix only ships 1% in HD because they never have the damn movies I want available. I have 5 very long waits!
JJ @ Aug 28th 2007 4:43PM
I just kinda find it funny that people who are obviously biased one way or another are calling out for engadget to be UNBiased.
although i wonder about the tone of hte report too.
I dont see HDDVD or bluray going anywhere anytime soon.
@Nfinity
N, i'm going to have to disagree with your HDDVD going for the throat... same as i have to disagree with blu ray winning as well. Personally i dont see any format as having the upper hand right now and that basically the two are in a dead heat to me and apparently sales wise both are the same.
If anything this war will go on until ANOTHER better format comes along as this seems like a stop gap technology until something better comes along.
But as i said before i dont see either one of the formats having the upperhand over the other... even with all the good news surrounding HDDVD recently. I just dont think thats enough to give them an edge personally.
zik @ Aug 28th 2007 4:47PM
It is not all all surprising that the rental numbers are just about equal. Blu-Ray players outnumber HDDVD players by 5-1 yet Blu-Ray movies only have a 2-1 sales margin. That means that the average HDDVD owner purchases way more movies than the average Blu-Ray owner. It is reasonable to assume that the average HDDVD owner will also rent more movies than the average Blu-Ray owner. Now if we were to also assume that people rent several movies to every one they buy you can see how the HDDVD numbers can indeed equal Blu-Ray numbers when it comes to rentals.
The movie sales rate is very misleading unless you are willing to look into the numbers and so some analysis. From the time I saw that Blu-Ray had a 5-1 lead in players but only a 2-1 lead in movie sales I knew that Blu-Ray was in trouble. Their PS3 strategy just isn't working because PS3 owners aren't buying/renting movies. They are playing games. Unless Sony has another plan, I'm afraid it could be curtains for Blu-Ray, because they'll have to sell too many PS3's to fend off the HDDVD onslaught this holiday.
Ryan @ Aug 29th 2007 2:22PM
Historically Blu-ray has WAY outrented HD-DVD. But that shouldn't be surprising since every PS3 is also a Blu-Ray player. Now that HD-DVD players are $239 vs. $350 for Blu-Ray players, it's anyone's guess who will emerge as the winner.
JJ @ Aug 28th 2007 5:17PM
actually zik HDDVD standalone players outnumber blu ray players 3 to 1 i believe, since those numbers dont count PS3's.
Granted a majority of blu ray purchasers probably use a PS3, its foolish to count EVERY PS3 as a blu ray buyer (Especially because some 60% of all next gen console owners (PS3/360etc) are unaware their systems are capable of HD output...apparently, i dont have the link to the recent article but i'm sure you can find it somewhere on this blog).
Right now there's way too many variables to get the right bead on anything very well. Depending on how you look at it Blu ray is winning, then if you flip it HDDVD is winning and vice versa.
When the fact of the matter is, NEITHER are winning. Even with HDDVD being out longer and the players being cheaper, it hasn't won. Even with all the studio backing and higher software sales of blu ray... blu ray hasn't won.
So its really a back and forth and neither is really ahead of the other depending on what information you're looking at.
JeffDM @ Aug 28th 2007 11:11PM
JJ; that looks to be an even-handed look at it. The Blu-Ray group claims all the PS3s are Blu-Ray players, which is true, but over half of them won't be used that way, so they shouldn't _all_ be counted that way, but they shouldn't _all_ be dismissed like the HD-DVD group tries to do.
I really hope this whole mess gets settled somehow this holiday season or soon after. It's just getting irritating.
JeffDM @ Aug 28th 2007 11:24PM
OK, I'm looking at my queue, and I have 24 items, all of then are high-def titles, and only three had "short wait". I don't have any "very long wait" titles.
Lianne @ Aug 31st 2007 11:09AM
I can attest to HD DVD player owners not wanting to buy the movies. I can get HD movies on Netflix, which I already pay for, so why should I buy them? I'm not really a proponent of any mode over the other. In fact, the only reason I got an HD DVD player was because I was getting a 360 already and I had a $40 off coupon for the player. I have an HD TV and I figured, why not, this will make movies look awesome. And I still got it for way cheaper than getting a PS3. I think that's a bit of evidence to the idea that the average consumer isn't going to take the plunge into high def. formats yet. I don't think the average consumer really cares about differences in storage space or extras very much either. I think the general line of thinking is, well, they're pretty similar, so why would I go for the more expensive one?
I would like to see a little more detail about the Netflix rentals, thought I don't see why it's unbelievable at all that rentals are even.
Also, I've had no problem getting HD movies, aside from the Matrix. That's been on "very long wait" at the very top of my list for over a week now.