THREE POINTS.
Backers of the competing technologies have been tussling for support from Hollywood to insure that consumers would be able to buy movies from all the studios for whatever technology gets to market first. Thus, Warner, which traditionally has among the heftiest box office market shares, would be key for Sony.
On top of that, Warner, which owns 11 patents to make DVDs, had been a leader in assembling the Hollywood studios that backed Toshiba's HD DVD format. And in the mid-90s, Warner and Toshiba had beaten Sony's efforts to have its technology adopted for the standard definition DVD, with most of the technology based on patents controlled by Toshiba, Warner, and other companies. Sony had some of its patents adopted by the standard definition DVD.
Neither Sony nor Warner would discuss their talks. But those with knowledge of the negotiations say they have focused on three key areas: the cost of producing the DVDs, how Sony would treat Warner's patents, and guarantees that the Blu-ray disk can be manufactured on time. Additionally, the sides are said to be discussing whether Blu-ray licensees, which include computer makers Dell (DELL ) and Hewlett-Packard (HPQ ) and DVD makers Samsung and Pioneer (PIO ), would be able to link to computers based on Microsoft's Windows software.
NOT OVER YET.
At present, Blu-ray uses Java software. Hollywood insiders say that Sony has also been offering studios a cap on the costs of producing its Blu-ray disks and perhaps some break on royalties for its patents. That might enable Warner to get a break on the so-called cross-licensing of its patents -- where the costs for its patents are traded off against the cost of patents it uses that are controlled by members of the Sony consortium.