Amazon (Nasdaq: AMZN)
has developed an elegant solution -- albeit a temporary one -- to a
problem that has been nagging electronics goods retailers: what to do
until the high-definition DVD format struggle reaches its conclusion.
For retailers, the unresolved war between Blu-ray and HD DVD formats means they will have to keep two sets of otherwise identical products -- DVDs and players -- on hand for consumers.
An Amazon subsidiary, CustomFlix Labs, has bypassed at least part of this problem by offering an on-demand DVD service that supports not only the two major competing formats but also Windows Media Video High Definition DVD.
Amazon's system will also generate unexpected dividends outside the company, according to Steve Weber, author of The Home Based Bookstore, available on Amazon.
"It will bump up sales for the entire video category," he told TechNewsWorld. "Amazon is amazingly successful in cross-selling and upselling additional related products through their e-mail promotions and during the checkout process."
Also, he added, Amazon's decision to support both HD DVD and Blu-ray through its CustomFlix subsidiary makes it more likely that both standards will get in front of consumers -- who will then have a good chance of determining which standard becomes predominant.
The prospect of retailers picking out the format for the next generation of entertainment products and content is uncomfortably reminiscent of the Beta versus VHS format wars of twenty years ago. There is a distinct possibility that they will eventually be compelled to make the call.
That may not happen right away or at all. Meanwhile, if no conclusive winner to the format wars emerges, it may be that brick-and-mortar stores will also put in place a service similar to Amazon's --- although that is less likely, Goodman thinks.
More to the point, it will not resolve the pressing matter of whether a retailer should stock Blu-ray or HD DVD players.
