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Netflix opts for Blu-ray, to phase out HD-DVD

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Globe Wire Services / February 12, 2008

TORONTO - Netflix Inc., the world's largest mail order movie rental company, said it will start offering high-definition DVDs exclusively in Sony Corp.'s Blu-ray format.

Netflix will phase out Toshiba Corp.'s HD-DVD format by the end of the year after a decision by four Hollywood movie studios to opt for the Blu-ray format over Toshiba's for high-definition films and videos, the Los Gatos, Calif., company said yesterday.

The decision may hurt Toshiba further as the industry decides who will win out in the biggest format war since VHS beat out Betamax in the 1980s. Last month, Time Warner Inc.'s Warner Bros. Entertainment unit said it would use Sony's high-definition home video format, which prompted Toshiba to cut prices.

"We're now at the point where the industry can pursue the migration to a single standard," Netflix said. The company said it received "a clear signal from the industry." The majority of Netflix customers who receive high-definition DVDs already opt for Blu-ray over the HD-DVD format.

Netflix said it expects all of the studios will use Blu-ray, and prices for high-definition players will fall, helping to support another decade of disc-based movie viewing at home. Netflix, with more than 7 million subscribers, stocks more than 400 Blu-Ray titles among its 90,000 choices.

Also yesterday Best Buy Co. Inc., the largest US consumer electronics chain, said it will recommend that consumers choose the Blu-ray format.

Best Buy said it believes consumers will benefit from the choice of one high-definition format. "Because we believe that Blu-ray is fast emerging as that single format, we have decided to focus on Blu-ray products," Brian Dunn, Best Buy's president and chief operating officer, said.

Best Buy will prominently feature Blu-ray hardware and software beginning in March, but will also carry an assortment of HD-DVD products for customers who want those, Best Buy said.

The two major studios that continue to use the Toshiba format are Viacom Inc.'s Paramount Pictures and General Electric Co.'s Universal Pictures.

Netflix shares rose 1 cent to $26.89 in Nasdaq Stock Market composite trading.

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