Retailers see HD format war dragging on

By Nicole Maestri

LAS VEGAS (Reuters) - The high-definition DVD format war has not been won, at least not in the minds of the retailers. Last week, Time Warner Inc's Warner Bros studio said it would exclusively release high-definition DVDs in Blu-ray format instead of Toshiba Corp's competing HD DVD technology.

While the announcement was seen as tipping the balance of power in favour of the Blu-ray format, retailers at the Consumer Electronics Show in Las Vegas this week did not see the announcement as a definitive sign of a clear winner.

"I don't think we're in a position to go out and declare a winner," said Steve Eastman, Target Corp's vice president of consumer electronics, in an interview.

As long as there are two standards competing in public, consumers will stay away, he added.

"Until it settles completely I think we're going to continue to see consumers sitting on the sidelines," Eastman said.

That is bad news for the development of a much-needed multibillion dollar industry. U.S. sales of DVDs, which are crucial to Hollywood studio profits, fell 4.8 percent to $15.7 billion (8.02 billion pounds) in 2007, the first significant drop since the format was introduced, according to preliminary Adams Media calculations.

"It would be our hope that by this Christmas there would be a clearer choice for the customer, instead of battling back and forth" between the formats, said Gary Severson, senior vice president in charge of electronics for Wal-Mart Stores Inc's U.S. stores.

"I don't know if that's going to happen or not."