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Hollywood tries 'combo' deal to push Blu-ray

Although prices for some Blu-ray players have dropped, customers are hesitating to jump into the next-generation video format. Even people who already own Blu-ray players are still buying movies on DVDs.

One big reason: Blu-ray discs won't play on standard DVD players found in cars, computers and bedrooms.

Now Hollywood - which is banking on the pricier Blu-ray discs to help lift sagging home video sales - is stepping up its efforts to win customers. Studios are packaging Blu-ray discs with regular versions on DVDs, and throwing in so-called "digital copies," which can play on computers and iPods.

Over the past month or so, "Up," "Harry Potter and the Half-Blood Prince" and many other hit movies were released in the US in such combo packs. Universal is releasing its "Bourne" movies on "flipper" discs with Blu-ray on one side and DVD on the other.

Such combos generally cost about $20 (£12.30) - sometimes 50 per cent to 70 per cent less than what it would cost to buy a Blu-ray disc and DVD separately.

Movie studios have been pushing Blu-ray for its crystal-clear sound and images, which can be enjoyed even without the best flat-panel TVs.

Yet DVDs remain more convenient because players and computer drives that read DVD discs are ubiquitous. Two-thirds of the 92 million US households that have a DVD player have more than one.

There are now Blu-ray players in nearly 12 million US homes. But you still need to think hard about where you'd want to play a Blu-ray disc before you buy one.

"Blu-ray is landlocked. It's home-locked," said Michael Vitelli, a vice president at Best Buy.

At a recent industry conference, Vitelli remarked that it shouldn't matter where consumers plan to watch a movie they buy, just as it shouldn't matter where Starbucks customers are going to drink their lattes. But these days, with an array of video formats and devices, it does matter.

The home video market is crucial for studios because that is where they recoup much of the cost of producing movies.

Yet the market has been sagging as people refrain from adding to their already well-stocked home collections and turn to rentals, which are far less profitable for Hollywood. US home video revenue fell 3.2 per cent to $4 billion (£2.4 billion) in the third quarter, even though the number of home movie transactions rose 6.6 per cent, according to The Digital Entertainment Group, an industry organisation.