Official statement from the Blu-ray Disc Association re: Paramount-DreamWorks

[Ilya]

Just got this statement directly from the Blu-ray Disc Association:


Blu-ray Disc Association Statement re: Paramount DreamWorks Announcement

"The decision seems oddly timed given Blu-ray's tremendous momentum both
with consumers and with retail. Blu-ray title sales continue to outpace
HD-DVD sales by nearly a 2 to 1 margin, and major retailers have expressed a
strong preference for Blu-ray. Moreover, the price delta between HD DVD and
Blu-ray players has been greatly reduced in the past few months, a trend
that is on its way to eliminating any perceived cost advantage the HD DVD
format has claimed to have. Under these circumstances, we can only imagine
what could have enticed Paramount to walk away from a format that is clearly
selling significantly more software than the HD-DVD format."

Andy Parsons, Chairman, Blu-ray Disc Association US Promotions Committee


Fox and MGM today announced 29 new titles for release by the end of 2007.
About the announcement, Mike Dunn, President Worldwide, Twentieth Century
Fox Home Entertainment, noted, "Given that Blu-ray has consistently outsold
HD DVD all year, and this is the case for any titles released by any studio
in both formats, we believe that the time is right for us to accelerate our
activities and help convert the nearly 60 million high definition households
worldwide into Blu-ray households. By the end of this calendar year there
will be expansive availability of technically vibrant releases featuring
never-before-seen, advanced BD-J interactivity as well as a broad offering
of playback devices at attractive prices that will prove to any doubting
consumers once and for all that Blu-ray is the only way."

Walt Disney Studios Home Entertainment Announces the Disney Blu-ray Title
Wave Coming in 2008, including the First Ever Platinum Blu-ray Release
About the announcement, Bob Chapek, President of Walt Disney Studios Home
Entertainment, noted, "The Platinum titles are the crown jewels of the
Disney Studios and we do not take lightly releasing them on any format. The
proven Blu-ray technology has allowed us to take our films to new heights,
fully utilizing the larger capacity and interactive capabilities for an
incredible all-new consumer experience. The strides that we've made with
this format are just the tip of the iceberg and we are confident that
consumers will be astounded by the level of entertainment that can only be
achieved by using the maximum capacity of the Blu-ray Disc format. All of
these wonderful titles will appeal to the ever growing Blu-ray market and we
are extremely proud to offer these in the most pristine and robust
presentations ever for Disney fans around the globe.


Additional Background Information:

Consider the following milestones:

* Blu-ray titles have consistently outsold HD DVD by a ratio of two
to one since January of this year. Consumer preferences for BD have been
especially clear with day-and-date releases on both formats like The
Departed and 300

* Blu-ray has sold 1.6 million discs so far this calendar year,
whereas HD DVD has sold 795K.

* In June, Blockbuster decided to support only Blu-ray discs at
the vast majority (85%) of its retail stores due to actual consumer rental
patterns that showed a clear preference for BD.

* In July, Target announced their plan to sell only a Blu-ray
set-top player in retail stores, and not sell any HD DVD set top models
through this holiday season.

* Also in July, BJ's Wholesale Club, a significant retailer in the
Northeast region, has decided to sell only Blu-ray products.

* The price delta between HD DVD and Blu-ray players has been
greatly reduced in the past few months, a trend that is on its way to
eliminate any perceived cost advantage the HD DVD format has
claimed to have. Sony also lowered the price of the PS3 console
to $499, resulting in a Sony-claimed 135% increase in sales.

* Major blockbuster titles have been announced by Disney and Sony
Pictures, including Disney/Pixar's Cars, Ratatouille and Finding Nemo,
Pirates 3, Spiderman 1, 2 and 3. These should have a very
significant impact on consumer adoption of Blu-ray.

* It took 10 months for Blu-ray to achieve 1 million disc sales, but
only 3 months to achieve 2 million. Market momentum is clearly
accelerating.

 

[vurbano]

In other words they say virtually nothing about it.

 

[diogen]

With the war escalated to such a level, the next defection (if it happens) can certainly turn out to be the last in defining the winner.
But I suspect both sides will be more accomodating to their studio members...

Diogen.

 

[r.jones1116]

Universal content is Paramount in deciding this format war.

 

[CochiseGuy]

Just got this statement directly from the Blu-ray Disc Association:


Blu-ray Disc Association Statement re: Paramount DreamWorks Announcement

"The decision seems oddly timed given Blu-ray's tremendous momentum both
with consumers and with retail. Blu-ray title sales continue to outpace
HD-DVD sales by nearly a 2 to 1 margin, and major retailers have expressed a
strong preference for Blu-ray. Moreover, the price delta between HD DVD and
Blu-ray players has been greatly reduced in the past few months, a trend
that is on its way to eliminating any perceived cost advantage the HD DVD
format has claimed to have. Under these circumstances, we can only imagine
what could have enticed Paramount to walk away from a format that is clearly
selling significantly more software than the HD-DVD format."

Andy Parsons, Chairman, Blu-ray Disc Association US Promotions Committee
-snip.

So, the majority speculation today is Paramount - one of the many subsidiaries of the mega conglomerate Viacom - was somehow bribed with hundreds of millions of dollars to go HD DVD only, implied by almost every BD mouth piece. I wonder if the opposite is true? Did the BDA over play it's hand?

Here's a link to a Oct. 6 2004 article on the background of the BD / HD DVD development. Ironically, it was posted by "Penton-Man", who posts as a BD "Insider" on blu-ray.com. It's a great read, but let me highlight the relevant parts -

Toshiba looked as if it could win the battle for high-definition DVDs too. After Sony and partners Philips and Matsushita (MC ) began work on Blu-ray, Toshiba in 2003 hired former Warner Bros. video chief Warren Lieberfarb to lobby for studio support. It was a savvy move, since it was Lieberfarb who had won the studios backing for the first DVD standard. By November, 2004, the assault appeared to be working—with Warner, Paramount, Universal, and New Line Cinema seemingly firmly in the Toshiba camp.

MICROSOFT'S CHOICES. With so much at stake, Sony went on its own recruiting campaign. It quickly signed up some of the biggest names in consumer electronics, including Samsung and Sharp. By early 2005, Dell, HP, and Apple (AAPL ) Computer joined the industry standards group. The electronics makers think Blu-ray has the greatest chance to prompt consumers to start opening their checkbooks for new gear.

Microsoft at first stayed out of this tug-of-war. Instead, it focused on selling its software to both sides. The Toshiba camp first agreed to use a piece of Microsoft software, its VC-1 code, that squeezes content onto the disk, then decodes it for viewing. Then, in September, 2004, the Blu-ray backers adopted this chunk of code as well -- in exchange for a public pledge of neutrality from Microsoft. "We wanted them to join us," says an insider who is close to the Blu-ray Disc Assn. "But we compromised on neutrality."

That neutrality has unraveled over the past year, as Microsoft increasingly came to see Blu-ray as a risk to its fortunes. In May, Sony confirmed that it would include Blu-ray in the new PlayStation game console beginning next year. Microsoft's Xbox wouldn't have such capability. Then on June 15, the Blu-ray camp decided against using Microsoft's IHD technology to add interactive features to Blu-ray disks, opting instead to stick with software based on Java technology.

FIGHTING PIRATES. In July, Sony decided to refine the Blu-ray standard in a way that would have far-reaching implications for Microsoft. Sony wanted to win the support of Twentieth Century Fox Film Studios, long Hollywood's leading advocate for tough anti-piracy measures. So Sony agreed to add safeguards developed for Fox by San Francisco's Cryptography Research, which could prevent Blu-ray movies from being ripped to a computer's hard drive.

Fox execs say their decision became a no-brainer, because of the extra protection and because as many as 30 million PlayStations might be sold in the next three years. "They have a Trojan Horse that will play a critical role in igniting the market for this product, and when they do, we intend to be in that market with them," says Michael Dunn, president of Fox Home Entertainment.

The move was a serious blow for Microsoft's Xbox. The company had decided to hold down costs by not including a next-generation DVD player in the game console. Instead, it planned to stream high-definition content from a PC sitting in one room to the console, which would be attached to a television. But Cryptography's safeguards meant studios could block their content from being taken off the DVD. That was the reason for Gates's exchange with Stringer at the conference. Gates wanted Sony to drop such technology, but Stringer wouldn't budge.

Meanwhile, Sony's camp received help winning over one influential studio from an unlikely source. Raider Carl C. Icahn, one of Time Warner's largest shareholders, began pressuring the studio to find ways to boost its stock price earlier this year. Despite Time Warner's long alliance with Toshiba, CEO Richard Parsons asked Jeff Bewkes, chairman of the company's entertainment unit, to reconsider the best way to recharge DVD sales. Bewkes decided that the studio should forget appearances and back Blu-ray if it was the format most likely to win consumers' hearts. "Blu-ray's potential for more capacity started looking better and better," said one Hollywood executive.

CRISIS MODE. Once warner started to waver, Paramount Pictures decided to move first in order to negotiate better terms, according to Hollywood insiders. On Sept. 23 one Blu-ray insider saw preliminary contracts written up by Warner Bros. and Paramount to join the Blu-ray board. "It was all going to happen in a day or two," says the source.

A lot of very good background info in that article, but the key is Paramount moved first on order to negotiate better terms - around Sept. 23 (2005). So, what if instead of Bill Hunt's claim of "suitcases of money from Microsoft", the original "better terms" from the BDA were up, and, confident they were on the verge of 'winning' Sony, er, I mean the BDA played hardball and insisted Paramount pay through the noise to release on Blu-ray?

There's alot we don't - and won't know - about what went on behind today's announcements. But, until Bill Hunt provides photographs of those "suitcases of money" going into Viacom's billion dollar HQ, I'll continue believe there's a lot more going on.

 

[navychop]

It's interesting to read posts by people in this forum that kept proclaiming that studio neutrality is best, who now rejoice so much that there is less neutrality. Could it be that the real agenda is that anything that helps HD DVD is best?

 

[CochiseGuy]

It's interesting to read posts by people in this forum that kept proclaiming that studio neutrality is best, who now rejoice so much that there is less neutrality. Could it be that the real agenda is that anything that helps HD DVD is best?

Yes. But it was only a few weeks ago that "some" BD backers tried to bribe Universal out of neutrality with "generous incentives", and when that didn't work tried to strong arm them with slanted PR - "Universal's Kornblau Wants Format War to Continue".

So, I'm giving myself a day - or two - to gloat over HD DVD finding the cajones to fight back. Then I'll go back to singing Kum Bai Ya and the beauty of neutrality.

 

[BobMurdoch]

I'm with you CochiseGuy..... I've had to watch as the bully tried to use brute force tactics to ram their format through.... Even after they declared victory 6 months ago, they can't grab any more market share..... And I look for the number to move back closer to 50-50 soon.

Most folks who vote for BluRay are doing it because they just want a winner, even if the format isn't as consumer friendly as the other one. Anything that "increases my utility" as the economists say, gets my vote..... the closer we get to equal parity, than the closer we get to more folks embracing the more user friendly technology....

 

[r.jones1116]

I'm with you CochiseGuy..... I've had to watch as the bully tried to use brute force tactics to ram their format through.... Even after they declared victory 6 months ago, they can't grab any more market share..... And I look for the number to move back closer to 50-50 soon.

Most folks who vote for BluRay are doing it because they just want a winner, even if the format isn't as consumer friendly as the other one. Anything that "increases my utility" as the economists say, gets my vote..... the closer we get to equal parity, than the closer we get to more folks embracing the more user friendly technology....

Most folks who vote for BluRay are doing it because of their wives.

Wife to husband: YOU SPENT $600.00 ON THIS %$#@! POS3 AND I CAN'T WATCH TITANIC ON IT!!!!!

 

[1080iBeVuMin]

It's all over. BD has another six months.
My BD rentals go back to BB today and my new Sammy BD player goes into the dumpster.

 

[navychop]

I have no problem with the spreading of cash. Both sides do it. Both sides "creatively" deny it.

But the decision itself, IMHO, is a bad one. This will delay resolution, and may well kill off the media totally, after all. SACD and DVD-A now really do seem to be the best comparison.

"Consumer friendly" is the latest catch phrase for HD DVD. Yeah, for the short term. But in the long run, Blu-ray has greater room to expand, a higher transfer rate, will have similar interactive features. This catch phrase will fade, just as all the claims about Blu-ray's hard coating "not gonna work" faded.

 

[JoeSp]

It was always about the money and ONLY about the money. If someone threw 150 mil at you for only 18 months of exclusive support you would do it too. How can you lose, maybe your selected format wins or if it looses then you have a brand new market for your product already there. This was a no brainer for both studios.

Two Studios to Support HD DVD Over Rival - New York Times

 

[navychop]

Thank you for the link.

 

[BobMurdoch]

When does Sony's, um, the Blu Ray forum's, checks to Disney and FOX stop coming?

And if there AREn'T any checks, would a big check flip them to the "dark side".

 

[1080iBeVuMin]

Both sides can subsidize until they go broke. After that, no more checks. So, ultimately, the market will determine which format will win -- or both, or neither. Subsidy checks are redundant or futile. They merely postpone the inevitable and are pretty bad investments.

Most consumers are interested in one format becoming the clear winner. They don't care which format wins. But, the losing execs are forced by peer pressure to "Do something! Bribe somebody!" Even if they themselves see the writing on the wall. It's not in their play book to cut their losses and move on.