Format War, best buy, blu-ray, circuit city, hd dvd

Best Buy Pledges $50 For Each HD DVD Buyer; Trade-Ins, Too

Apparently, the cost of Best Buy declaring Blu-ray the winner is $10 million—at least, that's how much it plans to give away when it issues a $50 gift card to everyone who bought an HD DVD player or HD DVD Xbox drive before February 23. (So, BB sold at least 200,000 HD DVD players in 2006 and 2007?) And it's not even something you have to fight for: If you are in the Reward Zone program, bought it with a Performance Service Plan or just made the transaction on BestBuy.com, the company will send you a card by May 1. If you paid cash at a store, though, you'll have to dig out that receipt. The company, like its competitor Circuit City, is also offering trade-ins for players and discs, regardless of where you bought them, through BB's online trade-in center. Make the jump for extra details.

Best Buy Stands Behind Customers By Awarding More Than $10 Million in Gift Cards to HD-DVD Purchasers
Leading Consumer Electronics Retailer will Send $50 Gift Cards to Customers Who Purchased an HD-DVD Player from Best Buy in the U.S.

MINNEAPOLIS —(Business Wire)— Mar. 19, 2008 With Blu-ray declaring victory over HD-DVD in the high definition movie format war, Best Buy, the nation's largest consumer electronics retailer, is giving $50 gift cards to customers who purchased an HD-DVD player or HD-DVD attachment from its U.S. stores before February 23, 2008. Customers will get a gift card for each player or HD-DVD attachment that they purchased. Through this program, Best Buy will distribute more than $10 million in gift cards to customers across the country.

"The DVD format war has divided our customers in a way we haven't seen since Betamax took on VHS more than 20 years ago," said Brian J. Dunn, president and chief operating officer for Best Buy. "At Best Buy, we understood and shared our customers' frustrations as they were being asked to choose one format or the other. Now that the format war is over, we hope these gift cards will reassure our customers that we will help them make a smooth transition into the right technology for their needs."

Most Best Buy customers won't have to do anything to receive their gift card. As a demonstration of its commitment to its customers, Best Buy will proactively mail cards to all customers that the company can identify as having purchased an HD-DVD player. Members of the Best Buy Reward Zone program, customers who purchased Performance Service Plans (PSPs) or who made their purchase on BestBuy.com should look for their gift cards in the mail by May 1. Other customers who may not be easily identified can call (888) BEST BUY to receive their gift cards with proof of purchase through a credit card or their Best Buy receipt.

"The beauty of this offer is that it doesn't require our customers to give up their HD-DVD player," said Barry Judge, chief marketing officer for Best Buy. "We know that many people who purchased these players have HD-DVD movies that they would like to continue to watch. We're telling our customers they can keep their players to play these movies as well as their older DVDs and use the $50 to treat themselves to anything else in our stores."

HD-DVD players can actually deliver greatly enhanced video performance with standard DVDs by upconverting the video resolution.

Beginning on March 21, customers who do want to get rid of their HD-DVD players can visit Best Buy's Online Trade-In Center at http://www.bestbuytradein.com. Visitors to the site will receive instant estimates of the value of their HD-DVD players and movies. Those who agree with the estimates can then ship their goods to the Trade-In Center free of charge by downloading a prepaid shipping label and will receive an additional gift card as payment for their trade-in. This service is open to HD-DVD owners regardless of where they bought their player.

For more information visit http://www.bestbuy.com/hddvd.

8:43 AM on Wed Mar 19 2008
By Wilson Rothman
7,051 views
28 comments

Comments

tamoko at 09:23 AM on 03/19/08
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I bet those HD DVD players will be being traded in for pennies on the dollar.
Seiven at 09:36 AM on 03/19/08
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hell yeah, I sold mine for a profit and now I get to spend the $50 giftcard on a PS3 game
PeteUALaw at 09:45 AM on 03/19/08
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The HD DVD players wont be in the trade in site until Friday the 21st... looks like we'll just have to plan on getting next to nothing for it though.
xplosivo at 09:49 AM on 03/19/08
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Wonder if this would apply for people that purchased their players during the sale on Best Buy for Business?
mikecoscia at 09:50 AM on 03/19/08
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Nice that you can trade in stuff no matter where you bought it. Got my 360 HD-DVD player from circuit city, bought bought my three movies from best buy...lol. Gonna trade it all in at bestbuytradein.com and use it towards blu-ray movies.
Seiven at 09:59 AM on 03/19/08
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@xplosivo: maybe, the BBFB reward zone is a different plan though
xplosivo at 10:03 AM on 03/19/08
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I actually just spoke to a rep at BBFB and she was totally clueless about the press release (shocker) and didn't seem to think that BBFB would be honoring the gift cards to customers that purchased from them as they "are a separate company from regular Best Buy." She really didn't know any details so I am hoping that things will change in the coming days. Guess time will tell.
scarbrtj at 10:04 AM on 03/19/08
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The cynical side of me asks: "What's in it for Best Buy to part with $10 million?" A tax write off maybe? Show a little loss to get some favorable balance sheet action? What could it be? I am a conspiracist.
weatherman at 10:29 AM on 03/19/08
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@scarbrtj: they're just giving away $50 gift certificates, most of which won't be used and which if they are used would just be applied to overpriced replacement BR players. It's a "win-win" for BB and the consumer on paper, but in reality it's just a marketing campaign by BB.
coolpengwn at 10:32 AM on 03/19/08
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@scarbrtj:

My guess is that $10 million is a small price to pay for Best Buy to placate all the early adopters, like myself. The people who bought HD-DVD from Best Buy probably spend a lot of money there on other things, and I think this is a good way to say "Sorry we kinda sorta screwed ya. Please still buy stuff from us.", even though it is really my fault for being an early adopter in the first place.
Rupan at 10:38 AM on 03/19/08
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This is too funny. I bought my HDDVD from BestBuy late last year. Sold it the day that I heard about it losing the format war. Made all of my money back and now I'm going to get $50 on top of that. I love it.
crap-action-jackson at 10:40 AM on 03/19/08
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Wow. This is a virtually perfect demonstration of how the market acts to prevent "path dependence" or "lock-in" of inferior products. Not only is the superior product being adopted, but the market is actually compensating - after the fact - early adopters that chose wrongly. This completely undermines "lock in", as it is the sunk costs of misguided early adopters that allegedly causes lock in of inferior formats in the first place.
Lizard_King at 10:57 AM on 03/19/08
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Heh, I bought a HD-A2 in November for $98, got my five free discs, sold 3 of them and my old DVD player for well over that amount, and now am getting $50 back, still have the HD-DVD as an upconverter and still have 2 of the HD-DVDs left. Call it a win!
bandit at 11:00 AM on 03/19/08
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@crap-action-jackson: The "market" isn't doing crap. This is a promotional gimmick intended to bring people back into the store to buy more stuff, and to recapture a small bit of lost consumer good-will for those people who were recently advised by the BB salespeople in the store to buy HD-DVD because it was a cheaper player or whatever.
Machete_Bear at 11:01 AM on 03/19/08
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@weatherman: I seriously doubt that someone who spent $200+ on a high-end entertainment device from BB would not use $50 in store credit. This is still a considerable loss for the company, however it does put them in a positive light (God knows they need it) and like you said, encourage consumers to put it towards more expensive devices, such as the victorious blue-ray.
crap-action-jackson at 11:13 AM on 03/19/08
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Bandit: "This is a promotional gimmick intended to bring people back into the store to buy more stuff"

No shit. Does anyone not know that businesses are in it for the money?

It's a gimmick that compensates misguided early adopters, which is my point. Why does the motivation matter?
Kobe_No_Means_No at 11:16 AM on 03/19/08
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$50 gift card probably still doesn't cover the higher original price that their customers had to pay instead of buying from online shops such as Amazon.com
BurstAneurysm at 11:35 AM on 03/19/08
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So the Xbox 360 counts too, right? I gotta find that receipt.
eFish at 11:40 AM on 03/19/08
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I still use mine for regular up converting. Best one I've had...now if they open it up to xVid...
BTS.WRKNG at 01:51 PM on 03/19/08
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1. Give away money to idiots.

2. ????????

3. Profit!
avconsumer at 02:39 PM on 03/19/08
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Ha - SO far behind Circuit City. Fail.
bitgod at 03:23 PM on 03/19/08
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shrug, I bought a spare A30 to sit in the garage. I have too many HD-DVD discs, cheaper to buy a backup player than replacing all the discs with BD version, if/when those discs ever come out.
shimmer at 04:38 PM on 03/19/08
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@bandit:
The "market" isn't doing crap. This is a promotional gimmick intended to bring people back into the store to buy more stuff, and to recapture a small bit of lost consumer good-will for those people who were recently advised by the BB salespeople in the store to buy HD-DVD because it was a cheaper player or whatever.

And?? Based on the information I have, Best Buy is a for-profit corporation. Promotional gimmicks intended to bring people into stores and buy stuff is what they're supposed to do. Some other examples of promotional gimmicks may include:
television advertising
using "cash registers" to calculate and charge people for purchases
sweepstakes
newspaper advertising
opening a retail store
buy this and get that for free promotions
etc.
Best Buy and Circuit City are in no way expected to do things like this...how many people received anything for their BetaMax, MiniDisc, 8-Track, DCC (who remembers that?), CD-i, Divx, blah, blah, blah?
Stop complaining, it's a nice, unnecessary gesture that may in fact generate sales for a retail company.
Bob at 05:23 PM on 03/19/08
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@tamoko:
For anyone interested, I looked into trading in my player with 6 movies. And assuming it's in "excellent" condition, the trade-in value is $54. Here's a screenshot:

[www.techconsumer.com]
genius74 at 05:27 PM on 03/19/08
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I'll use my GC to get some discounted HDDVD movies..

wait a minute..
scarbrtj at 06:58 PM on 03/19/08
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@genius74: sell 'em to me, at a marked-down, discounted discount
Lizard_King at 09:32 PM on 03/19/08
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If the going rate is $54 for a player and 6 movies, I'm hoping to see the units and used movies at REAL discount pricing soon!

I'm happy I have some HD-DVDs and players - I think going into the future, like music is now, Dics are not the format, rather the vehicle for the digital media. I have about 20 HD-DVDs now, and I plan on being able to rip them to my server and use them, in all their HD glory for years to come, whether on the HD-DVD format disc or not. I may wind up burning them to a Blu Ray when blank media comes down in price. Moving forward, digital delivery will be a crucial service, but I prefer physical hard copies, and Im glad I can pay less than a DVD for Blu Ray quality.
iFlingPoo at 02:36 PM on 03/28/08
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@Machete_Bear: Not true. Companies offer store credit or rebates because a large percentage of them NEVER GET USED by the customer. $50 is totally different than $50 gift card. Haven't you read about the amount of money Best Buy alone makes from unused store credit on gift cards?

I totally agree that this is nothing more than marketing. Most people who use the gift card will spend more than $50 in the store. I can't wait to actually USE my store credit. At this point, the player I bought only cost $120 for the 1080p player after pricematching, but it saved me $100 on the TV I bought. I got 7 free movies, sold my DVD player for $25, and now I get $50 for a Nintendo game? Sweet.

Guitar Hero 3 here I come :P