This analysis from Screen Digest, a media research firm based out of London, points out a few things about Blockbuster’s decision on HD DVD rentals. The analysis is generally consistent with my own blathering on the topic (my comments are in italics):

• Screen Digest’s research indicates that most HD rentals are being made online and not in-store. Blockbuster is still offering HD DVD online and HD DVD owners need not be concerned about being left out of the high-def party.
• Blockbuster can significantly reduce inventory costs in 1,700 outlets, which is a sound business decision. It’s much easier to provide a variety of titles instead of doubling up on movies in both formats (for the movies that come in both formats). Remember, each outlet has physical limitations on what can be displayed on the shelves, whereas the online operation can use warehouses galore.
• The announcement establishes Blockbuster’s relevance in the video rental business and is a good PR move. This was more positive news for them than they’ve had recently.They had announced a price-cutting plan sure to lose short-term money, but win customers away from Netflix; Earlier in May, they had posted bigger than expected first quarter losses.

I’ll be first to admit that this analysis sounds like someone from Toshiba’s HD DVD team wrote it, but I looked up Screen Digest and found they’re an old company whose media research, even on games and music, has been widely quoted by many outlets over the years. Companies like these earn their income from selling their research work, and need to be very objective or else they get written off as biased and unreliable. While it’s expected that the editor at HDDVD.com might be saying great things about HD DVD, it would be totally inappropriate for Screen Digest to come from that same kind of place.

I’m hoping I can keep this promise, but the next couple of posts won’t be about business issues. I’m sure some of you might prefer to hear about new movies or other developments.

The reason I’ve been highlighting the business cases is to demonstrate to all those who count themselves as early adopters of HD DVD, that they need not worry that they bought into a losing prospect. Those who say that one format or the other one has won or lost are not looking at the big picture. It’s way too early for gloom and doom, or even overjoyous headlines of victories. It’s very much like predicting the outcome of a sporting event only a few minutes into the first period. It makes for good banter, but not much more.