Consumers are fully adjusted to watching DVDs and some are now becoming more comfortable purchasing the next-generation Blu-ray HD format, which has led to two bookstore chains tackling home media differently.
Borders is cutting back DVD shelf space to focus more on Blu-ray, though Barnes & Noble continues to expand both their DVD and Blu-ray sections.
"Barnes & Noble has been outperforming Borders overall," said Wedbush Morgan Securities analyst Edward Woo. "Barnes & Noble is doing a much better job than everyone else."
I rarely see a lot of shoppers in Borders who go to the DVD and music section and actually purchase something after browsing. Every time I go there I find nothing but a rather lackluster selection of movies at a price that doesn't make any sense at all. I think if the company offers better-priced Blu-ray movie titles -- especially since emphasis will be taken from DVD -- then Borders can have some success.
However, I've gone to plenty of Barnes & Noble stores and see people browsing the movies, as the prices are much more appealing, and the selection is usually better. I've never actually purchased any movies or digital content from Barnes & Noble, but applaud the company for at least making me consider it.
Both companies are having a difficult time with business, however, with the physical media format in general, as music and movies continue to go digital. After a recent Borders first quarter financial conference call, the company said DVD sales fell 22 percent when compared to the same time last year. Barnes & Noble posted a $2.7 million loss for the first quarter, though the results were better than expected.
I'm very curious to see how both companies handle the slumping economy and an evolving movie business that has proven to be rather unfriendly to them. Will Borders be able to rack up better sales numbers when leaving behind DVD and focusing more on Blu-ray? Can Barnes & Noble keep its lead over Borders?
