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Netflix picks Blu-ray, rattles HD DVD

The online movie rental service's choice to go exclusively Blu-ray doesn't bode well for the embattled HD DVD format.

If Warner Bros.' decision to go exclusively with Blu-ray Disc was an industry-rattling earthquake, Monday's news that Netflix would begin to phase out HD DVD rentals is an inevitable aftershock: much smaller impact, potentially damaging, and still leaves everyone feeling unsettled.

By the end of the year Netflix will no longer offer HD DVD movies to customers, opting to exclusively stock Blu-ray Discs in its online rental service. In the company's announcement, Netflix said it made the decision based on Blu-ray's recent momentum--Universal and Paramount are the only remaining major Hollywood studios with agreements to release titles exclusively on HD DVD.

For HD DVD backers like Toshiba, Microsoft, and the studios, Netflix is probably yet another sad loss, but it won't have the demoralizing repercussions the Warner decision did.

But for the average consumer, in reality, not much changes. That's because the overwhelming majority of DVD renters don't rent high-definition discs. In fact, most of Netflix's own customers don't rent high-def discs. But those who did were renting Blu-ray more than HD DVD, hence Netflix's decision.

Sure, Netflix is one less place to rent HD DVD, but finding copies of the beleaguered disc format is not impossible--Blockbuster stores don't offer HD DVDs to rent, but its online rental service still stocks both formats.

In all, the announcement doesn't do much to make the muddled format picture any less murky for consumers right now. High-definition video players and discs are still too pricey for most buyers, and the quality improvement over DVD isn't as apparent to anyone but the hardcore videophile crowd. Plus, standard DVD players that can convert discs to high-def resolution get the job done reasonably well. Until any of that changes, high-definition video will be stuck in neutral no matter which studio or rental service makes an offer of exclusivity.

Update: The HD DVD Promotional Group's response: "We have long held the belief that HD DVD is the best format for consumers based on quality and value, and with more than 1 million HD DVD players on the market, it's unfortunate to see Netflix make the decision to only stock Blu-ray titles going forward."

For further discussion, hear the guys at CNET's The 404 talk about it on Monday's podcast.