Following the money in the format war
by Steven Kim 
posted Aug 31st 2007 at 2:52PM
Everyone knows that the outcome of the Blu-ray / HD DVD format war has huge financial stakes. Reporters, then, take the "Follow the money" approach. At Europe's IFA consumer electronics show in Berlin this week, attempts to do so turned up no solid evidence to clarify things. Onstage execs from Warner Bros., Fox, MGM and Sony all denied that they received payola from the BDA. The response from Stephen Foulser, Disney's European Marketing VP, was only slightly more illuminating -- "no comment." This comes on the heels of reports that Paramount and DreamWorks picked up a $150 million check for their 18-month HD DVD exclusivity. The mystery and intrigue in this format war are fitting for a movie, but which format would it be released on?
Reader Comments (Page 1 of 1)
chuck @ Aug 31st 2007 3:33PM
you seem to overlook the obvious: MASSIVE subsidizing of the only blu-ray capable device, the ps3.
Alex @ Aug 31st 2007 3:34PM
another shill/bias spin by Engadget or just poor reporting?
do you have a source for this article?
From this blog (by someone actually in attendance)Execs stated "no comment" except for Fox, who said: "We were given very good content protection" (smiles).
http://www.dvdtimes.co.uk/content.php?contentid=65741
WiFiSpy @ Aug 31st 2007 3:53PM
"no comment" usually means Yes.
mike @ Aug 31st 2007 4:00PM
I think they should make a movie about the war between VHS and Beta first lol on DVD
Region Free HD @ Aug 31st 2007 4:01PM
Don't forget about Blu-ray Disc replication subsidies for the major studios, or have they run out?
Maybe they just ran out for Paramount....
Vince @ Aug 31st 2007 4:28PM
^^And may they long continue to run out.
domerdel @ Aug 31st 2007 4:25PM
Alex:
This article also surfaced on highdefdigest.com
But the difference in incentives are, that Paramount and Dreamworks aren't the board of directors, while Disney, Sony are (2 of the 4 asked about incentives) are... Warner is neutral, not much to say about that.
MI @ Aug 31st 2007 5:08PM
I don't know what the scandal is, everyone knows that everyone gets 'incentives' to support new formats. the thing here is that Paramount got an incentive, an inordinately large incentive, to NOT support a format they were currently supporting. It's like 7-11 paying Philip Morris to NOT sell cigarettes to the local mom and pop store. It's just a scumbag tactic, plain and simple.
Mike @ Aug 31st 2007 5:52PM
So, Sony paying Disney or subsdsizing Disney production so the don't support HD DVD is scummy? I agree.
Alex @ Aug 31st 2007 5:52PM
@MI, what kind of incentive do you think the other BDA studios got to stay exclusive in the first place? c'mon
Tom @ Aug 31st 2007 6:39PM
@Mike, Alex, and other HD DVD fans
Why is this sooooo hard to comprehend?
To get to a single HDM format (which is everyone's goal right?) we either need all studios to switch to neutral or all the studios to support one format.
Yes, it sucks that, studios started exclusive, including Sony, Universal, Fox, Disney, and Weinstein.
The Paramount deal is different though. They went from exclusive to neutral (what everyone should want) back to exclusive again.
They went the wrong way, and I'm not talking about not going Blu either. Studios should be breaking their exclusivity. Instead we are going backwards by having a neutral studio go exclusive.
Yes, HDDVD fans are happy because it increases the chance HDDVD will prevail, but it drags the format war out longer. So it was good for HDDVD but bad for the ultimate goal of getting a single HDM format.
Though unlikely, if Warner went Blu, that would be just as bad. Yes Blu would benefit, but again the single format goal would suffer.
Now if all studios went either HDDVD or Blu from a payout that would be fine, but a single one going from neutral to exclusive is assinine.
I think the only people truly cheering the Paramount deal are fanboys who certainly don't care about single format adoption unless it is their chosen format.
ian9outof10 @ Sep 5th 2007 11:59AM
You've made some great points in your post. But there is one thing that puts paid to everyone going exclusive. Namely Sony. Who will, obviously NEVER support HD DVD (well, not for 10 years at least, see VHS).
Kevin Murphy @ Aug 31st 2007 10:01PM
You neglect patent-sharing incentives. Not every (indeed few) business deal is just about money. Sony and the BDA are trying to use their copyright portfolio (a legal monopoly) the acquire a send (legal) monopoly in Blu-ray patents.
This is hardly news -- when Sony bought MGM, Tristar and the rest of the Culver Studios back in the 80's, they made it clear that they were NOT going to lose another format war, and were going to use exclusive content to do it. The current war was planned almost 20 years ago.
SimbaDogg @ Aug 31st 2007 10:10PM
@chuck
who the hell is subsidizing the losses on the ps3? sony and only sony, they're the ones the huge losses for the ps3 division of SCE. The only division of sony not to post a profit. Check the papers...
@Tom you make a lot of good points. It would have been best for all the studios out of the gates to be neutral, when we could have seen what format truly sells better. But since that period has come and gone, if all studios went neutral, it may only prolong this struggle.
Alex @ Aug 31st 2007 11:20PM
sorry Tom, not everyone thinks we should have one format, unless it was a hybrid of the two technologies. Neither format by itself is superior overall. That is why so many HD DVD fans are ardent supports, because it has many features that BD doesn't, as well as a finished standard, and can have just as glorious of a movie on the media. BD has a a great physical media but too many other issues to be superior. Due to the greed the only answer that is best for consumers in the long run is dual format players.
Chris @ Aug 31st 2007 11:57PM
This format war is retarded. I just want one format to offer Lucas $1 billion to release all 6 Star Wars movies on their format only by black friday then this stupid war would be over.
Mike @ Sep 1st 2007 5:22AM
Every studio being neutral would be great but middle class america would buy the cheapest player and HD DVD wins...so sony has to start offering incentives to get studios blue ray exclusive and HD DVD fights back...Yes the customer looses.
The quickest way to 1 format is a clear adoption of 1 format...the ps3's didn't give blue ray that. There were articles and studies on how many are used for movies. But HD DVD playes don't have that problem. Their low price allow high volume of purchases..and we all know what they are being bought for.
russ99 @ Sep 11th 2007 4:24PM
Mike:
The cheapest now may not be the cheapest in 1-2 years.
The reason HD DVD has momentum in studio adoption now is that it's cheaper for the companies to make discs. I don't know if you noticed, but that certainly doesn't mean cheaper movies for consumers. Both BD and HD DVD are still $25-30 per film.
The real format winner will be determined when the middle class people have HD TVs and both HD content and players are inexpensive. Neither has happened yet, and probably won't for some time.
I also really like that BD hasn't been locked into a spec. There's so much more developers could do with DVD menus nowadays if the spec wasn't locked down 10-15 years ago. BD's spec-less platform enables additional features to be added in the future, with only a simple firmware update (becoming a standard) installed by the user.
RedPrince @ Sep 4th 2007 10:04AM
There is a third format HD VMD --- I hope it will be the people's choice for HD entertainment. I hope people will keep away from the rotten stench of Toshiba's and Sony's doggy dealing in the dark. They have been lying and manipulating the market every which way they can.
Smee @ Sep 5th 2007 11:05PM
The only problem with the format war ending is, where are we all gonna go, what are we gonna do? Face it, were all trolls and we love a good "stoush", that's why we are here!