Some rumors never die, and this one we heard even before the
official Warner press release was issued. Now that the format war is officially over, newspapers and magazines everywhere
are looking back on the events preceding Toshiba's announcement. While no one really knows why each studio made its decision,
The Globe and Mail cites "analysts" who think the payoff was a factor. Well,
we asked Warner point blank about the payoff rumor and Kevin Tsujihara, president, Warner Bros. Home Entertainment Group said that it "was not a bidding war" and that it really came down to
Q4 sales. This answer leaves us with the impression that while some money probably changed hands, the real reason why Warner went Blu was because during all of 2007 the
Blu-ray versions of Warner's titles always outsold the HD DVD. The bottom line is that regardless of any single payoff, since Warner owns most of the home media market, it had the most to lose if it waited too long to chose a format. [Disclosure: Engadget's parent company's parent company is Time Warner, which also owns Warner Bros.]
Reader Comments (Page 1 of 1)
TJ @ Feb 23rd 2008 1:25PM
Does it even really matter? Paramount got a payoff for its HD DVD exclusivity.
Joseph Lark @ Feb 23rd 2008 1:36PM
What really happened is this.. http://www.nytimes.com/paidcontent/PCORG_317734.html?ref=technology
Toshiba was starting to push for lower HD-DVD prices. This new HDM disk war was lost then. Warner Bros. and all the studios were not going to let lower prices happen so soon. The new HDM disks are a potential new cash cow for them and they are banking on everyone wanting to switch over all their movies from DVD to the newest HDM disk, whatever it is. By keeping the disk price so high that allows for greater profit taking. Start lowering the disk prices so soon...less profit from all the early adopters whom are usually not price sensitive.
mugatu @ Feb 23rd 2008 2:25PM
How is it that Toshiba had control over the prices of movies? Toshiba shouldn't have had anything to do with the price of a movie, the studios should have controlled that. Oh, unless you mean Toshiba's bribes to the movie studios let them control the movie prices too. Hmmm. Yes, then Toshiba also controlled that didn't they?
Seems like Toshiba was spending a lot more time behind the scenes than Sony ever was.
Joseph Lark @ Feb 23rd 2008 3:00PM
Toshiba could pressure the prices lower by lowering its royalty cost. When HD-DVD prices would go lower Blu-Ray would have to match to save some face. Therefore either the Blu-ray association royalty or the movie companies profit would shrink. This was a dangerous first step in a price war where the consumer would benefit, but the movie studios would lose out on profit... follow the money as the saying goes.
Just like when everybody switched from VHS to DVD, the movie companies stand to make billions as everybody re-buys their movie collections. Since this new HDM disk is such higher quality it deserves a premium price. This premium price is pure profit for the studios... don't mess with that profit.
Galley @ Feb 23rd 2008 3:43PM
Potential profits in a new format can be in the billions. Profits in a format war that goes on for years is near zero.
massive_98 @ Feb 23rd 2008 1:40PM
Before someone screams 500 million dollar payoff lets think about this logically.-If there was a payoff, it would not have been that high. At least the BRD fanboys picked a reasonable amount when Paramount went HD DVD exclusive.-If there was a payoff it would not have been funded entirely by Sony. Blu-ray isn't just Sony. Clear?
Ron @ Feb 23rd 2008 1:51PM
Who cares at this point? Can we get some VHS vs Betamax stories up also?
DEEZNUTZ @ Feb 23rd 2008 1:54PM
Yawn... if there was a payoff, they certainly got their $$$ worth... it ended the war in one swift check!
JDS @ Feb 23rd 2008 3:12PM
Yeah right..because the NY Times always prints the truth...John McCain story recently...amongst a scandalous amount of stories proven to be false, totally made up, never confirmed etc....they had a certain journalist that liked to invent the news....
Warner's releases their new BDs & HD DVDs at $19.99 so what lower HD DVD prices are you talking about?
IF there was a payoff then why is Warner's still releasing HD DVDs through May 2008? And willing to restock titles based on demand?
Doesn't sound like a payoff?
When Paramount got paid off they halted Blu-Ray ASAP not 6 months later...and they ALLEGEDLY destroyed existing copies of Blu-Ray titles...Blades of Glory etc....
Just get over it already, enough with all the conspiracy theories.
Joseph Lark @ Feb 23rd 2008 3:26PM
Did I say the HD-DVD prices were lowered...No I didn't. Look at the date of the article. If a decision was being made to lower the prices then it probably would have been announced at CES. Guess what happened right before the announcement...HD-DVD's world crumbled. Warner had seen enough and knew what side it wanted to be on... the side that would make it more profit.
As for Warner still selling HD-DVD's. Warner will gladly keep on selling HD-DVD as long as they can profit from it. What company wouldn't do that.
JDS @ Feb 23rd 2008 3:14PM
Yeah right..because the NY Times always prints the truth...John McCain story recently...amongst a scandalous amount of stories proven to be false, totally made up, never confirmed etc....they had a certain journalist that liked to invent the news....
Warner's releases their new BDs & HD DVDs at $19.99 so what lower HD DVD prices are you talking about?
IF there was a payoff then why is Warner's still releasing HD DVDs through May 2008? And willing to restock titles based on demand?
Doesn't sound like a payoff?
When Paramount got paid off they halted Blu-Ray ASAP not 6 months later...and they ALLEGEDLY destroyed existing copies of Blu-Ray titles...Blades of Glory etc....
Just get over it already, enough with all the conspiracy theories.
mrsitter @ Feb 23rd 2008 5:35PM
Blu-ray is not owned by Sony people. Sony is just a member among the board of directors (19 members) which is the highest on the BDA one can go. Do people realize how big some of these other BDA companies are...like Disney and Samsung. Samsung takes in 3 times the revenue Sony doe!.
dukefan @ Feb 23rd 2008 6:48PM
i still don't doubt it, sony is one of the richest companies in the world. they would do anything to win, i wouldnt blame them for it if they did pay warner off. atleast some one finally came out and put a finish to the war.
Mr. E @ Feb 23rd 2008 8:00PM
Warner Brothers had already public stated that they wanted to end the format war to stop consumer confusion and hesitance to buy in. If that's the case, it would have made NO SENSE for them to go HD DVD exclusive, because it would have made the studio split almost even and perpetuated the format war, perhaps indefinitely. Hence, Blu-ray was the obvious way to go to end the war, so there was no need for any sort of "bribe" to get them to go Blu-ray exclusive.
Logic people, use it!
Zixxer @ Feb 23rd 2008 8:22PM
thank you. logic indeed
Jove @ Feb 23rd 2008 8:44PM
hey hey hey i got a rumor: americans didnt land on the moon and it was all filmed in a studio... you gonna post that one here too, engadget ????
rg23 @ Feb 24th 2008 11:01AM
These things don't matter anymore. The war is over. BD needs a plan to have blu-ray in the mass market (and have the spec finalized) before another leap in the technology arrives. I'm sure 1080p will not be the standard 5 years from now.
Zixxer @ Feb 24th 2008 11:21AM
A large group of electronic manufacturers get together and develop a product known as Blu-ray disc. they spend four years developing this revolutionary technology. along the way, toshiba decides it doesnt want to lose all the money they make off of owning the right to dvd, so they quickly throw together an inferior blue laser disc known as HD-DVD. they even rush to the market hoping to capture the hearts of some anxious early adopters. thankfully, in the end, the superior format wins. how can a company be so greedy?
Zixxer @ Feb 24th 2008 11:24AM
rg23: standard def (480i/p) was the standard for 60 years. now you think high def (1080i/p) is going to last 5 years??? do some research before you post.
rg23 @ Feb 24th 2008 2:25PM
Did your 720p last 60 years? Technology way different 60 years ago (even 10 years ago) compared to now.
Zixxer @ Feb 24th 2008 3:21PM
wow, you still didnt do your research. 1080 lines of resolution is/was the standard for hd from the beginning. 720 was just thrown in there as a cheap option. 1080 tv lines is here to stay for atleast 30 years.
rg23 @ Feb 24th 2008 7:59PM
30 years!? What are you a blu-ray salesman?
It does not matter if International Telecommunication Union planned 1080 lines from the beginning. 720p, temporary or enhanced whatever you want to call it, was still used by electronics companies until 1080p was finalized. Just because ITU's plan took over 20 years until it became a reality it does not mean it will take another 30 years for the next bigger thing to come out. Actually it is already out but it is still expensive for consumers.
Zixxer @ Feb 24th 2008 8:09PM
February 19, 2009 the fcc is mandating that all signals go digital in an effort to force broadcasters to use hdtv's 1080 tv lines. So you are suggesting that in 5 years we will upgrading this standard again!?! how naive are you?
rg23 @ Feb 24th 2008 8:37PM
720p or 1080i is what being used by TV stations but yet your HDTVs, blu-ray or HD DVD uses 1080p. Yes, how naive of me that blu-ray has better specs than what is being used by TV stations. This post is nothing about all of these stuff so, have a good night and hope your opinions don't give you nightmares.
Zixxer @ Feb 24th 2008 8:45PM
obviously when hdtv was introduced they knew that 1080p would eventually be a part of hdtv. enjoy your imaginary 2160p super hdtv with your 1080p broadcasting for the next 30 years.
Zixxer @ Feb 24th 2008 11:25AM
Warner chose Blu-ray cause it consistently outsold hd-dvd for over a year.
Zixxer @ Feb 24th 2008 8:11PM
and also, by the way, 720 lines of resolution are going no where. 720 is a part of the whole hdtv/1080 idea. there's no need for 1080 lines of res in a 20 inch or smaller tv.
Ryan @ Feb 25th 2008 12:07PM
Anyone that believes sales played anything more than a small factor in Warner's decision is kidding themselves.
In the end, Warner needed a unified format and the quickest way to end the war was to go Blu-ray.