Paramount to unleash tons of HD DVD *exclusive* titles!

[Brimstone]

Microsoft wouldn't admit to it, if they did it's anti-trust. They know all too well about anti-trust.

No company would admit to it.

Thats absurd. Microsoft is a publicly traded company...and their cash cow is the Operating System business.



The fact is the Blu-Ray group made terrible engineering decisions that are haunting them.


Way too aggressive on how much data they're trying to pack-in on a single layer. This made it harder on the disc yeilds. Also this caused the need for a scratch resistance coating. Also the optics are more costly because the laser beam has to focus with more precision.

Toshiba was willing to work with the Chinese manufactures without hesitation. Hence the HD-DVD standard has a variant for China so in time the electronic guts will be the same for the Chinese home market. This will add a lot of economy of scale.

Then despite Sony wanting HDi, Java was adopted by the Blu-Ray group to appease FOX. Even Apple wanted HDi, and Disney worked with Microsoft to create the standard. Java so far has been a disaster for the Blu-Ray format.




Then the big trojan horse that is the PS3 has been given the cold shoulder by consumers. Microsoft didn't force Sony to include Blu-Ray.



The only people accountable for the poor situation Blu-Ray is in are the members of the Blu-Ray group. Despite having a huge install base thanks to the PS3, sales barely inch past HD-DVD. The movie disc attach ratio for HD-DVD players is incredible in comparision to the base of Blu-Ray players.

 

[ERP]

Microsoft wouldn't admit to it, if they did it's anti-trust. They know all too well about anti-trust.

No company would admit to it.

Assuming it's a shared marketting deal or similar, no company would have a problem admitting to it. It happens all the time, both in movies and in games. We've commonly added platform specific content to games to have the platform owner kick in extra marketting.

 

[avaya]

Payoffs don't necessarily come in the form of cash.



During the period of limited adoption (ie Now) the content delivery companies have very little on the line. Blu-ray sales are anemic and HD-DVD sales are worse. All the content delivery companies can flip flop as they choose when the mood suits them with almost no impact to the bottom line. Until you see sub $100 standalones adoption was always going to be slow regardless of a unified format or not.

Yes I fully understand pay-offs can also be non-cash expenditures. However the Blu-ray exclusives are all business decisions that make logical sense not just in the near term but long term. The CE majors collectively joined together because they wanted to break the Toshiba/Warner monopoly on royalties.

Of course the studios have little on the line in the short term. This is my point. Viacom sacrificed future earnings for what is basically nothing in the near term. $150mn is being bandied about, how much is this to a multi-billion dollar corporation like Viacom? It isn’t a lot of money, by a long shot.

Adoption also comes in stages, spurred on by rising consumer confidence at each stage. Enthusiast to middle class to mainstream. If by the time you get to $100, if you still have 2 formats battling it out, it won’t matter diddly, since mainstream consumers won’t have confidence to purchase in one format and believe that it will still persist or become the standard in the future. The network effect is non-existent.

Before you get to mainstream pricing you have to get fundamental confidence in the medium established. This simply won’t happen in a format war. Moreover the head over heels desperation in a format war to erode margins on hardware faster than internal competition would produce, is totally destructive to the CE industry, which again long term is not a healthy situation.

Brimstone,
It is the BDA's fault for not realising Paramount was selling itself so cheap for exclusivity. It is also the BDA's fault for not realising that when you make an enemy of Microsoft you should prepare to think on their level. Microsoft are simply a top predator corporation, this is the reason for their continued success. The BDA was too naive in their approach.

Toshiba's willingness to partner with the Chinese so quickly is a reaction to PS3 and the other major CE's abandoning them. Nothing more, nothing less. Their decisions are not made in a vacuum.

ERP,
I understand the concept of that, however the money involved here would seem rather excessive for marketing a niche format in the primary stages of its adoption. Moreover if this kind of deal is widely accepted, Microsoft would never admit to paying off a studio for exclusivity since it provides the impression that the format requires financial incentives for studios to stick with it. Which is the truth.

 

[Dave Baumann]

Of course the studios have little on the line in the short term. This is my point. Viacom sacrificed future earnings for what is basically nothing in the near term. $150mn is being bandied about, how much is this to a multi-billion dollar corporation like Viacom? It isn’t a lot of money, by a long shot.

So you are positive that this apparent $150M deal is all thats behind it, despite, as you concede, its actually not a big sum of money?

Could Paramounts take that the HD DVD format being cheaper for them to use in the long run have no grain of truth to it? Having seen both formats and the costs associated with them they are one of the ones who can judge this.

For those of us consuming these products - it's easy to simply believe decisions are made due to just advertising incentives, but when you speak to the technology guys inside these studios - you hear that HD DVD is cheaper, serves the technological needs of the High Definition format, that the programming languages are an extension of the established DVD format - so it is easier for them to work with. This decision is about more than an intial Toshiba advertising incentive - the decision was made at a tech level, an economic level and about a cost delivery level to the public. Paramount made this decision from the tech guys up.

 

[patsu]

It seems that the dust has not settled yet.
http://digitalbits.com/#mytwocents

Java so far has been a disaster for the Blu-Ray format.

In what ways ? I have not seen it in action yet.

 

[willardjuice]

It seems that the dust has not settled yet.
http://digitalbits.com/#mytwocents

Thanks for linking us to a site that is Blu-ray based?

Some biased garbage that I don't care about

I was merely talking about how Sony also has given incentives to other studios to support Blu-ray.

 

[Joe DeFuria]

In what ways ? I have not seen it in action yet.

Exactly.

 

[Brimstone]

Brimstone,
It is the BDA's fault for not realising Paramount was selling itself so cheap for exclusivity. It is also the BDA's fault for not realising that when you make an enemy of Microsoft you should prepare to think on their level. Microsoft are simply a top predator corporation, this is the reason for their continued success. The BDA was too naive in their approach.

Toshiba's willingness to partner with the Chinese so quickly is a reaction to PS3 and the other major CE's abandoning them. Nothing more, nothing less. Their decisions are not made in a vacuum.

BDA too naive? These companies broke from the DVD forum. The association that created one of the most sucessful formats: the DVD. The BDA members wanted the patent royalties for themselves and to leave Toshiba out in the cold.

Oh and lets not forget one of the major BDA members owns it's own movie studios. Sony was strong arming all the way with Blu-Ray by having their movies exclusive to the format.


Toshiba and the DVD forum has made better decisions than BDA.


Microsoft is just one player in all of this. They were pushing their technology to both the DVD forum (Toshiba HD-DVD) and BDA. Both groups saw value in VC-1. Many in BDA wanted HDi over Java, which included Sony, but politics prevented this from happening.


Toshiba has had a great game plan and they've followed thru on its implementation.


The PS3 demographic isn't paying off as a Blu-Ray player. While stand alone HD-DVD units are finding their way to owners that buy a lot of movies.

 

[patsu]

Thanks for linking us to a site that is Blu-ray based?

??? Even if he's Blu-ray biased, he seems to have insider access and will be updating his site soon. Why jump the gun ? You can always judge the follow up material he posts.

The PS3 demographic isn't paying off as a Blu-Ray player. While stand alone HD-DVD units are finding their way to owners that buy a lot of movies.

The same goes for some Blu-ray players, standalone or convergent (Just check AVSforum). Blu-ray has been outselling HD-DVD 2:1 in US and recently 3:1 overseas. The Blu-ray players have got to count for something The recent coup HD-DVD pulled is beautifully executed though.

 

[RobertR1]

It seems that the dust has not settled yet.
http://digitalbits.com/#mytwocents



In what ways ? I have not seen it in action yet.

It's VERY hard to take any article from Bill Hunt seriously.

For those who don't know. Just recently Bill Hunt gathered a group of die hard BR supporters and decided to picket at a Hi Def speaking panel where Universal was present. He literally harassed the President of Universal trying to get them to go neutral.

This guy is a fanatic and an idiot of the worst kind. I could give 2shits about what he posts. He just throws shit at the wall and hopes some of it sticks. The crap that doesn't fall off, he'll use it justify in integrity.

 

[patsu]

That's dramatic.

I would still be interested to hear what he can dig. I don't think the article I quoted is biased in any way. He's just citing that more will pan out over the next few days and weeks (fall outs and such).

 

[Geo]

Of course the studios have little on the line in the short term. This is my point. Viacom sacrificed future earnings for what is basically nothing in the near term. $150mn is being bandied about, how much is this to a multi-billion dollar corporation like Viacom? It isn’t a lot of money, by a long shot.

Remind me again which "future earnings" they've sacrificed? Looks to me like they took the bird in hand. . . and the two birds in the bush ain't going anywhere. . .they can be bagged later. Is it really likely that any significant portion of folks who are hot to have Shrek the Third are going to forgo buying it because its not on Blu-ray? Or are they going to buy it on DVD. . .and then maybe "HD format x" later on anyway?

 

[willardjuice]

Even if he's Blu-ray biased, he seems to have insider access and will be updating his site soon. Why jump the gun ? You can always judge the follow up material he posts.

Oh I didn't jump the gun. I read his posts, had a good laugh, and continued on to surf the web. Perhaps you and I were reading different posts?

But with Blu-ray Disc software since the start of the year outselling HD-DVD by a 2 or 3 to 1 margin, and with Blu-ray hardware sales pulling even with much cheaper HD-DVD hardware in recent weeks, the outcome of this thing was just starting to become clear to a lot of people

Uh what Bill?

 

[patsu]

Oh I didn't jump the gun. I read his posts, had a good laugh, and continued on to surf the web. Perhaps you and I were reading different posts?

I quoted his most recent post.

Uh what Bill?

You can google for his sources. Basically both side claimed hardware sales advantages (depends on what and how you count). Would be interesting to see the Nielson numbers for the subsequent months.

 

[DemoCoder]

A long term war benefits digital distribution the most.
For the studios they'd love DD. All the DRM in the world and no manufacturing costs.

Which is exactly Microsoft's plan. MS doesn't give jackshit about HD-DVD, because they want DD, which means more opportunities to rape^H^H^H^H charge the consumer at each step, and battle Apple and Sony on a playing field where MS has the advantage (non-CE devices leveraging Windows, MS media player, etc), meanwhile, GPLv3 means that people trying to build CE DD devices will have to license Windows, because if future Linux kernels move to GPLv3 with their anti-DRM provisions, proprietary OS CE DD devices will be the only way to go.

Frankly, I think the studios are more fearful of DD than optical, because the challenges of defeating a distribution mechanism which uses a combination of software and hardware is more difficult than a pure-software approach. That's why all of the HD-DVD and BluRay hacks so far have been hacks of software players.

And as a consumer, this bodes ominous signs for the future of your PC. I may not object to heavy DRM inside a standalone player or console, but do you want your desktop PC DRM'ed to the MAX?

 

[RobertR1]

Which is exactly Microsoft's plan. MS doesn't give jackshit about HD-DVD, because they want DD, which means more opportunities to rape^H^H^H^H charge the consumer at each step, and battle Apple and Sony on a playing field where MS has the advantage (non-CE devices leveraging Windows, MS media player, etc), meanwhile, GPLv3 means that people trying to build CE DD devices will have to license Windows, because if future Linux kernels move to GPLv3 with their anti-DRM provisions, proprietary OS CE DD devices will be the only way to go.

Frankly, I think the studios are more fearful of DD than optical, because the challenges of defeating a distribution mechanism which uses a combination of software and hardware is more difficult than a pure-software approach. That's why all of the HD-DVD and BluRay hacks so far have been hacks of software players.

And as a consumer, this bodes ominous signs for the future of your PC. I may not object to heavy DRM inside a standalone player or console, but do you want your desktop PC DRM'ed to the MAX?

DD would be done through STB's......last I checked I have no control over STB's DRM implementation.

I wouldn't be too shocked to see STB's in the future basically be closed system PC's with large drive storage.

 

[willardjuice]

I quoted his most recent post.

And does that change anything? His bias is still well-documented and therefore his posts should be taken with a grain of salt.

You can google for his sources. Basically both side claimed hardware sales advantages (depends on what and how you count). Would be interesting to see the Nielson numbers for the subsequent months.

I did and his source is that one insignificant online store is now selling slightly more Blu-ray players than HD DVD players (that store also sells six types of Blu-ray players vs three types of HD DVD players). Overall at the end of July, HD DVD players outsold Blu-ray players by about 1.5-2:1 depending on which source you use (and of course disregarding PS3 and the Xbox360 add-on).

 

[DemoCoder]

DD would be done through STB's......last I checked I have no control over STB's DRM implementation.

I wouldn't be too shocked to see STB's in the future basically be closed system PC's with large drive storage.

That was precisely my point: Future STB = PC + Vista Embedded + HD in a box = $$$ for Microsoft. Accessing MS Live to download/watch/authenticate service = $$$ for MS. IPTV integration = $$$ for MS. Studios having to encode everything in VC-1 and use HDI = more money for MS tools.

Given that, is it any wonder that Microsoft would send Men-in-Black with suitcases full of sweetheart deals to try and keep the format war going? It's not like they haven't done it before.

 

[RobertR1]

That was precisely my point: Future STB = PC + Vista Embedded + HD in a box = $$$ for Microsoft. Accessing MS Live to download/watch/authenticate service = $$$ for MS. IPTV integration = $$$ for MS. Studios having to encode everything in VC-1 and use HDI = more money for MS tools.

Given that, is it any wonder that Microsoft would send Men-in-Black with suitcases full of sweetheart deals to try and keep the format war going? It's not like they haven't done it before.

So MS shouldn't do what's best for their business? As soon as the market for DD starts opening up, there will be many other players along with MS with their STB's. Don't think for a second that companies like Motorola (dominate the cable STB's) will sit around and let MS take the market. I'd be shocked if they're not already talking to cable/sat companies and doing their own R&D. MS is simply another player to the market albiet a very powerful one.

Personally I can't fault MS so far in the hi def. HDi has certainly brought some cool interactivity to HD DVD and their VC-1 codec has produced fantastic results.

As for them paying Paramount. Amir went on record stating that no money from MS to Paramount and Dreamworks exchanged hands. That is much more official to me than salivating fanboys writing blogs.

Now if Toshiba gave Paramount money or incentives, I can certainly see that.

 

[DemoCoder]

MS simply agreed to provide tools or services, or cross promotion, it's the same. When a politician has his home repaired for free by a lobbyist, instead of being handed $20k in cash to have it done, do we really consider it less of a bribe?

As for what MS should and should not do, MS did "what was best for their business" before, and the result was a dissent decree. MS is not looking to create a competitive DD STB market, they are looking to stack the deck in their favor.

That MS does "what is best for their business" is reason enough to be skeptical of their attempts to *sabotage* next-gen optical. Because, what is best for MS is not always what is best for the consumer or the industry in general.

MS already owns the desktop. I'm not sure I want them to own by living room too.