Warner Bros goes Blu-Ray Exclusive

[Bouncing Zabaglione Bros.]

Well that's fair enough, though it does presume that those who Sony were trying to persuade were concerned about a potential customer base of <~10M on a timescale or a year or two. I wonder if this kind of flies in the face of the arguments that you yourself have been making in various threads about this really being about HD v. DVD and about that being a long game, not a short game. The studios want to re-sell us stuff we already own, they need this battle over ASAP. Your own argument I think, and one I'd tend to agree with.

If the real battle is for the [strike]hearts[/strike] wallets of 100+ million DVD customers over 1-2 decades, does a few million PS3s and their owners' whims over the next year or two (before standalone players of whatever flavour become throw-away price) really matter?

It's all marketing though isn't it, and Sony probably used it to convince the other studios that the Sony route was the one to take in order to end the stalemate quickly (and a pile of cash). The numbers arn't big, but they are bigger than HDDVD can point at, and then you get into the fluff off what's been bought as a dedicated player and what's been bought as a dedicated gaming machine. Sony was basically making the best of the numbers they had.

Sure, when talking DVD vs HD, HD formats are currently a drop in the ocean, but what Sony were addressing was HDDVD vs Blu-Ray. Once that bridge is crossed, they can get on with tackling DVD, and I've no doubt that Sony tried to leverage the BR in PS3 during their studio negations - that's what they put it in the PS3 for after all ie to leverage PS3 console sales into BR player sales.

There's a lot of people in this thread that do not appear to be making a clear distinction between BR winning over HDDVD, and the winner of that fight (presumably BR now), going forwards to fight DVD in the long term.

The next-gen hi-def battle between HDDVD and Blu-Ray is only a precursor to the "new hi-def" vs "entrenched DVD" battle. Of course that's a fixed fight, as both contenders are controlled by the same hardware and media companies on both sides.

 

[Ty]

Maybe it's worth extending that line of thought even further and maybe concluding that PS3 didn't play as significant factor in this "victory" as it's been cracked up to be in other threads here and doubtless other places. Ie. maybe most PS3 owners bought their PS3 to play games, not because it was a cheapo BR player.

Hmm, I think it was still significant but not in the sense that 1 PS3 = 1 BR movie buyer but rather 1 PS owner = 1 future BR movie buyer = 1 not-likely-gonna-buy-HD DVD movies.

If the real battle is for the [strike]hearts[/strike] wallets of 100+ million DVD customers over 1-2 decades, does a few million PS3s and their owners' whims over the next year or two (before standalone players of whatever flavour become throw-away price) really matter?

I mentioned in a different thread that the PS3 was NOT directly important the BR's long term success. However, if the PS3 is successful in tipping the balance in BR's favor for the short term, it just might be that this is all that is needed in the format war - and indeed, the war was over in the short term.

I think a lot of the thinking is that if a PS3 owner was going to go hi-def, they would go BR because they've already got it in their PS3s. PS3 owners are potential BR owners. They are much less likely to be potential HDDVD owners.

Sony can point at those numbers to the media companies and say "look at all those potential BR customers - we've already got the players in their living rooms connected to their TVs".

Precisely, which is why I stated, "a sort of large potential pool of future BR movie buyers."

 

[Deleted member 7537]

Huge fall since warner's announcement

 

[Arwin]

It's a shame for a lot of folks that they came to that conclusion this late.

True, although of course also helpful for others. Basically they payed to make the eventual standard mature faster and become better. Profile 1.1 and 2.0 / BD-J probably wouldn't have arrived as quickly as they have now, for instance, and standalone players sub $300 (an online friend of mine bought a Samsung for $299, against my recommendation of getting a PS3 by the way ) already at this stage.

 

[patsu]

Financial Times is now saying that Paramount will drop HD DVD also after Warner Brothers: http://www.ft.com/cms/s/0/dc409afa-bd75-11dc-b7e6-0000779fd2ac.html?nclick_check=1

 

[wco81]

Kind of a strange clause if true.

Why would Paramount hinge a strategic business decision on what a rival studio would do?

 

[Brad Grenz]

So they don't get stuck holding the bag, of course!

 

[StefanS]

Financial Times is now saying that Paramount will drop HD DVD also after Warner Brothers: http://www.ft.com/cms/s/0/dc409afa-bd75-11dc-b7e6-0000779fd2ac.html?nclick_check=1

That seems strange. AFAIK Paramount signed an exclusivity agreement with HD-DVD last summer. Any word on when that will end? Or are they seriously thinking about breaking that / ending it prematurely?

 

[inefficient]

That seems strange. AFAIK Paramount signed an exclusivity agreement with HD-DVD last summer. Any word on when that will end? Or are they seriously thinking about breaking that / ending it prematurely?

As per the article:

"Paramount, which is owned by Viacom, is understood to have a clause in its contract with the HD DVD camp that would allow it to switch sides in the event of Warner Bros backing Blu-ray"

 

[Titanio]

Paramount/Toshiba/Sony's response:

``Paramount's current plan is to continue to support the HD DVD format,'' Brenda Ciccone, a spokeswoman for Paramount, said in an e-mail today.

Keisuke Ohmori, a spokesman for Tokyo-based Toshiba, said the report is speculative.

Masayo Endo, a spokeswoman for Sony, declined to comment on the report.

http://www.bloomberg.com/apps/news?pid=20601101&sid=aQMGgh2LV_bU&refer=japan

Seems like rather..careful..responses on the part of Paramount and Toshiba.

 

[inefficient]

Paramout does not have to drop support of HD-DVD. They just hopefully have a way out of the "exclusivity" part of the contract. Even if they go back to selling on both formats it would be the killing blow to an already mortally wounded platform.

So the quote "Paramount's current plan is to continue to support the HD DVD format'' could remain true. Even if tomorrow they announce new titles for the BR platform and cancel the exclusivity.

 

[Geo]

It doesn't strike me as odd that Paramount would be able to relatively easily get out of their HD DVD agreement. It's probably just a notice clause of some duration (i.e. 60 days notice or somesuch). My understanding at the time was what they got was ongoing subsidies for mastering and promotional costs, rather than just a lump sum "hookers and blow" check. If they aren't going to do HD DVD anymore, than obviously they require neither. . .and presumably will have never received the bulk of the subsidy payments contemplated as the expenses were never incurred.

Edit: And if they did add such a clause, the most likely reaction from the other side would have been to insist on some degree (from partial to total) of refunds on previous subsidies paid under the agreement depending on how early it is ended.

 

[Mintmaster]

``Paramount's current plan is to continue to support the HD DVD format,'' Brenda Ciccone, a spokeswoman for Paramount, said in an e-mail today.

Anyone remember this from less than a month ago?

“We have made no decision to change our present policy which is to produce in both HD DVD and Blu-ray,” said Jim Noonan, Warner Bros. senior vice president and general manager

Even if Paramount is bound by an exclusivity contract, nulling it would probably be beneficial to both Toshiba and Paramount, including the money going to Paramount. Toshiba made that deal primarily to prevent a Warner defection, but now that it happened, there's no point in sinking more money into the format.

Given the slow adoption of HD formats, Paramount may actually make more money by keeping the contract. It's unlikely that BluRay + DVD profit would exceed DVD profit by $150M in 18 months, particularly when the absence of a BR option would boost DVD sales.

 

[Mintmaster]

Anecdotes and conjecture don't make a rock solid argument. One can easily come back and say "we had 5 VCRs in our house 20 years ago" and that's the end of that.

Why is it so hard for you to accept his conjecture?

10 years ago there was no such thing as portable VCR players. You didn't have laptops with VCRs. You didn't have cars with VCRs in them out of the factory. VCRs didn't cost $20.

quest55720 is one of the few people who really saw the importance of combo/twin discs, and he's absolutely right. Unless BR hardware reaches near price parity with that of DVD and replaces the secondary media devices outside the living room, it won't replace DVD without a combo disc. Twin disc sets for a small price premium won't happen, because they'll tank studio profits due to reselling by end users.

Many years back portable DVD players were $1500 and notebooks were $2000+. Now they're $70 and $300, and everybody can afford them (particularly movie buyers). In a couple years when BR disc sales start being more than insignificant, DVD will have cemented its position even more with these secondary players.

 

[patsu]

Hmmm... I tend to believe more and more secondary player will be portable digital player instead of DVD player (e.g., Video iPods, PSPs, portable WMPs). They don't need sophisticated network infrastructure. Who has the portable DVD player monthly sales number and install base number ?

I would explore the Blu-ray + converted movies for digital player package right away to tap on the digital player growth. Movie conversion and hunting for pirated movies is a tedious task, sometimes not rewarding.

As for combo disc/twin discs, I think the BDA guys said they will do twin discs if necessary. From their press conference, it sounds like these guys want to use interactivity to hit the mainstream consumers next.

 

[wco81]

As I noted in the other thread (the one about whether this means more PS3 sales), Sony demonstrated copying a lower-res version of a Blu-Ray movie from the PS3 to the PSP.

Hmm, I know there are a lot of minivans with LCD screens in the back but is it that big of a phenomenon?

Yeah I agree with Patsu, the portable media player is the way to go. Maybe something you can dock to the bedroom TV or take on the road with you.

 

[patsu]

Hmm, I know there are a lot of minivans with LCD screens in the back but is it that big of a phenomenon?

Portable digital players these days have TV-out, so we should be covered there.

 

[Titanio]

Times article on more minor players defecting, but also mentions of the Paramount rumours:

http://business.timesonline.co.uk/tol/business/industry_sectors/media/article3153038.ece

Up to 20 companies that the Times knows of that are poised to defect, including some quotes from a couple of different ones.

It [Paramount] offered exclusivity in August on the basis that it could reverse the decision should Warner Bros switch to Blu-Ray.

Pony Canyon, a major Japanese music, animation and film studio and part of the giant Fuji Television media empire, said that although it was currently part of the HD-DVD Promotion Group, the decisions of US studios meant it would “choose Blu-Ray in the end”.

Several other Japanese firms – including content producers and electronics component makers – said that their support of HD DVD was “under review” and that they knew of many others in the same position. Others, who admitted that they had previously been waiting for “clear market momentum”, said that it had now probably arrived.

Also, Bill Hunt of TheDigitalBits:

Well... we've had SOME confirmation this morning of the details of the Financial Times story from last night. While the studio isn't yet commenting, reliable industry sources are telling us that Paramount is indeed preparing to end their HD-DVD support and announce a return to the Blu-ray fold. Details are currently being finalized, and an announcement is expected as soon as they're complete. Paramount's first new Blu-rays will almost certainly include many of those titles that were cancelled last year, but that were already packaged and ready for shipping, so you could see them in stores very quickly once the studio announces.

Meanwhile, sources are telling us that Universal has also been talking with the BDA, and is looking to follow Paramount and Warner's lead as soon as possible.

Talk out of CES is that the major retailers have been piling the pressure on Paramount and Universal to make the switch sooner rather than later, so they can reconfigure their stores.

 

[SPM]

As for combo disc/twin discs, I think the BDA guys said they will do twin discs if necessary. From their press conference, it sounds like these guys want to use interactivity to hit the mainstream consumers next.

The problem with twin disks is that people can, and probably will, give away one of the disks and keep the other. Hence movie studios will be reluctant to release movies in that form. Combo DVD/BD disks are going to be the way forward.

 

[Titanio]

Maybe console news, but Microsoft, being asked about the possibility of a 360 Blu-ray addon again, from Reuters:

Microsoft's Xbox could consider Blu-ray support

"It should be consumer choice; and if that's the way they vote, that's something we'll have to consider," Albert Penello, group marketing manager for Xbox hardware said when asked whether Microsoft would support a Blu-ray DVD accessory in the event that HD-DVD failed.

You can't say it's not a bummer, not a setback, but I've seen this battle declared over so many times," Penello said of Warner's decision.

"I want consumers to have a voice in this and I think there are a lot of consumers who bought HD-DVD who are going to have a say in how this shakes out."

I know it's basically a reiteration of what they've said before, but it just manages to somehow sound..different now. The conditions they outline seem inevitable if they're not already present.