“Blue-Ray Tech.” Responds Strongly to Paramount/HD DVD Deal

Posted by Dave Cowl on August 24, 2007 
Filed Under: Blu-ray, HD DVD, Replication, Studios

Independent Blu-ray factory Blue-Ray Technologies spoke out strongly about the reported $150 million in incentives Toshiba and the HD DVD cadre gave to Paramount and DreamWorks Animation to shun Blu-ray discs according to Erick Hansen of BRT calls it an act of desperation by HD DVD, which is in grave danger of losing the Hi-def format wars, as indicated by retailer and consumer preference.

Perhaps of more interest is the New York Times article that they reference that states that Paramount and DreamWorks Animation together will receive about $150 million in financial incentives for their commitment to HD DVD, according to two Viacom executives with knowledge of the deal but who asked not to be identified.

So while Kevin Collins may not have cut the check, it is not just bloggers like Bill Hunt reporting that financial incentives to the tune of $150 million were made.

Related posts:

  1. Paramount Jumps Over The Hedge To HD DVD Exclusivity
  2. Viacom Earnings Report Confirms Paramount Payout from Toshiba
  3. Paramount’s HD DVD Decision Decried by Analysts
  4. Microsoft’s Kevin Collins Responds to Paramount Payoff Rumors
  5. Paramount to Discontinue HD DVD after March 4th


16 Responses to ““Blue-Ray Tech.” Responds Strongly to Paramount/HD DVD Deal”

  1. sir colin of hunt on August 26th, 2007 4:48 am

    Dave, you’re kinda missing the point here. Incentives story broke way before Mr. Hunt opened his gob. Those stories did not name Microsoft in any way; actually no source of payment was mentioned specifically. Mr. Hunt made his rant about Microsoft, and MS specifically, paying the money – and it’s that accusation which Mr. Collins is responding to. In fact, as far as I know, only Bill Hunt has named Microsoft as responsible for the $150M.

  2. Dave Cowl on August 26th, 2007 10:36 am

    I see your point. Where do other people think it came from?

  3. Tyler Pruitt on August 26th, 2007 2:01 pm

    If I had to guess, I think it would have came from Toshiba.

  4. Dave Cowl on August 26th, 2007 5:16 pm

    I think most people consider that Toshiba doesn\’t have that kind of money where Microsoft is more likely to. Of course, it doesn\’t really matter where the money came from, it damages any belief that the companies behind HD DVD can win on the merits of the format alone. Interestingly enough I read somewhere that accepting the money was pushed down from Viacom, due to Paramount & SKG not doing as well as expected financially and this was seen as one way to make the bean counters happier. Interesting to say the least but still very much in the realm of rumour.

  5. sir colin of hunt on August 27th, 2007 1:56 am

    “it damages any belief that the companies behind HD DVD can win on the merits of the format alone”

    I believe the merits of either format have never had anything to do with studio support. The one and only consideration studios have is money. There’s no doubt in my mind that each exclusive studio was lured in with ‘incentives’ and promises of lucrative future sales. It’s also why I can’t understand the amount of noise raised by the Paramount deal; it was just another business deal.

    Source of the money, then. My money (heh) is on Toshiba. The company’s absolutely loaded, wealthier than Sony and making a healthy profit (unlike Sony).

    I thought also amusing that a disc replication factory would deem it necessary to issue such a press release. It’s almost like Bridgestone complaining about how badly GM is doing.

  6. Ralph on August 27th, 2007 3:03 am

    Itís of no consequence. An offer was made and Paramount accepted it. Last ditch effort, Microsoft involvement thatís all meaningless.

    The fact of the matter is that if a TRUE winner of these so called Hi-Def wars is to be declared then ALL movies would have to be released on ALL formats, the consumer would make the decision and then you can declare victors.

    This segregation of the market was artificial and unnecessary.

    Also, the bulk of Blu-Ray customers are PS3 owners, gamers that thought they would be getting a next-gen console, not an inexpensive Blu-Ray player. I am dying to see what the numbers will be when, triple A titles are released for PS3 and gamers have to make a decision between a $60 dollar game and a couple of Blu-Ray’s

  7. Dave Cowl on August 27th, 2007 8:47 am

    I think that Fox and Disney has technical reasons to go Blu-ray – Region Coding and BD+ being two – and Disney perhaps for the greater capacity. This is apparent in that they make use of these features extensively, where Warner and Paramount never used Region Coding for either format for example (though Paramount was starting to make use of the capacity near the end).

    Toshiba is the only alternate source of the funding… though I was not aware that they were cash rich, especially after all the cheap HD DVD players that one might assume are not making any money at best at these price levels. I don’t doubt that the notebook side of Toshiba is doing fine.

    I agree that the press release is odd in itself.

  8. Segarsj on August 27th, 2007 10:37 am

    @Dave Cowl

    I definitely agree that Disney, Fox and Sony are huge fans of “unbreakable” copy protection. BD+ is rumored to be indestructible, and that it will remain so for “10 years.” I’m not quite sure where I heard that last part, but it has been said in the past.

    Regardless, we all know that copy protection is far from unbreakable, and that even the best protection schemes are prone to attacks. History is proof of this. I highly doubt that the BDA has stumbled upon the holy grail of the anti-piracy world. Therefore, BD+ is more or less a mirage of sorts that has managed to entice Fox and Disney to join Blu-ray in hopes of one day being rewarded for their support through the implementation of the airtight copy protection that BD+ promises.

    When AACS was cracked Fox/MGM dropped off the map for months, awaiting the finalization of BD+ and further assurances that this would not happen again, so what will happen when the mighty BD+ is circumvented/disabled and their new releases turn up on some torrent site? If history is any indication they will pull their release slate once more and wait for something better, but really, how long can they continue to do this?

    The main point here is that they have and will be missing out on potential sales by choosing to wait for this fabled BD+ or it’s inevitable successor.

    Copy protection is a novel idea, nothing more. The studios feel they need the extra security, but the reality of the situation is that more people legally purchase their media than those that steal it. The people who want to steal media will always find a way. Period.

    With that being said, do you think that these studios will wake up one day and give up the fight and decide to release indiscriminately, perhaps even choosing to take both the red pill and blue pill at once, or will we never see an end to this piracy madness?

  9. Dave Cowl on August 27th, 2007 11:24 am

    I am not sure that there is anything after BD+ – I guess they will have to choose between releasing with the best they have … or not releasing anything.

    Region coding is also important and so far has been used by Sony, Lionsgate, Disney and Fox (Fox iirc region coded even their catalogue titles, the others mix and match). It was not used by Paramount and Warner on BD.

    Though I imagine that HD DVD might consider region code if it meant that they could get support from those studios. But that is all conjecture…

  10. Segarsj on August 27th, 2007 11:52 am

    HD DVD is gaining a lot of traction in Europe due to the fact that it doesn’t support region encoding, so I can’t imagine they would start implementing region encoding in an attempt to coax Fox and Disney to go neutral.

    Not only that but I’m digging it as well because it allows me to import some of my favorites (Terminator 2, The Prestige, Pan’s Labyrinth and the Fantastic Four films) from a variety of countries across the world.

    I know there are a lot of HD DVD owners that import, but clearly not enough. I wonder if this is due to a lack of consumer knowledge or interest. I’ve done my best to educate HD DVD owners about their players potential, but I’m only one person and as such I’ve had little effect. Personally, I only see it as a plus for HD DVD owners as there is little incentive to make the costly switch to Blu-ray. If I can pick up the select films I want overseas (albeit for a slightly higher price) that are Blu-ray exclusive in the states this option is much cheaper than investing in a new, and potentially obsolete, Blu-ray player that doesn’t even have the latest specifications/features.

    Here is some International Release information for anyone that’s interested:

    Rise of the Silver Surfer has been announced on HD DVD with a december release:

    The Fantastic Four is available now:

  11. Dave Cowl on August 27th, 2007 12:57 pm

    I guess it depends on how many discs you choose to import. If it is more than 100 it is cheaper to get a BD player and buy the discs here.

    Due to the Region Code only being used for new titles for the most part, the same is mostly true for BD importing. Japan will become key also since there is no HD DVD market to speak of there and it is the same region as the USA. Though right now you can get Universal titles that BVHE has overseas rights for on BD from Aus or the UK with little effort.

  12. Ralph on August 28th, 2007 6:48 am

    An argument on “protection” is useless. There is NO.

    I will repeat that again in a single line.

    THERE IS NO PROTECTION SCHEME that cannot be defeated.

    We all know that. SONY knows that, the studios know that.

    The only REAL way to tell a clear victor in this mess is to release all the movies in all the current hi-def formats, and then when there is a clear victor you can work in making it bulletproof – which again we all know will last for about a week.

    Fact is, SONY created this mess and on another board I read/post in an article was circulated stating the fact that SONY is in a state of schizophrenia. They are having a real identity crisis and do not know to whom to peddle their wares.

    The movie crowd, the GPS crowd, the casual gamer crowd, the TiVo crowd, the hardcore gamer crowd.

    They donít even have a sound strategy to phase out PS2 (which would be suicide at this point) and push the new tech, which sells lukewarm at best.

    This is an artificial format war, it didnít have to be.

    So if Paramount wants to make a few dollars in this calamity, then let them – somebody needs to get paid.

    Toshiba (and their backers) offered the pay-out and Paramount took it. Now what?

    In fact I hope Toshiba extendes offers to ALL the studios so that we can get into the business of movie collecting again.

    If SONY and its backers feel that they hold the golden chalice then extend pay-outs to all the studios, you know what they say: “Money talks and BS walks”.

  13. Dave Cowl on August 28th, 2007 10:06 am

    Actually Blu-ray has been backed by far more than Sony for quite some time. Even before it became a movie format, Panasonic and Sharp had recorders in the Japanese market and Panasonic is a major player with BD50 for example (the Panasonic recorder in Japan was the first to do BD50 recording, and their PC drive (and OEMs) are as far as I know still the only ones that can record BD50 discs). I am sure you are aware of the handful of different CE manufacturers who make BD players.

    It amuses me that people see Blu-ray disc equating to Sony.

    If you want to look at a format that is only backed by one CE company, you should consider HD DVD. We are over a year in and you can still only buy HD DVD players from Toshiba.

    Don’t you think that buying loyalty is a little anti-consumer? How would you feel if Warner dropped HD DVD because someone paid them to?

  14. Ralph on August 28th, 2007 7:35 pm

    Iíd feel fine Dave.
    You know why? Cause these kinds of deals are happening all the time. Even now while we write here.

    My argument is that all of this is unnecessary.
    Only the hardcore, like you, like me and most if not all the bloggers on this site are running around planting flags and analyzing, when in fact NONE of the movie studios have anything to lose.

    Hardware is being sold, movies are being sold.

    My point is, that regardless of who is backing whatever format, they should release in all the formats.

    The customer will dictate, by sells what they want.

    Canít declare a proper winner until that happens. This is logic. If this was applied in any other argument it would make sense.

    Do you remember when DVD was introduced? The thing sold itself. I wish I was working in the Wiz (at the time a large chain) or some other department store, cause if it was on commission id be a millionaire.

    You canít give away Blu-Rays and HD’s – people are weary.

    Only the early adaptors like us have any say so far, because most people are playing the fence.

  15. Dave Cowl on August 28th, 2007 8:40 pm

    I understand your perspectives and agree with some and not with others.

    I think it is unnecessary. There was a time where Toshiba got with the BDA and tried to work out a compromise. That is where it should have stopped.

    This is my take on things – I might be wrong, but this is what I think about the situation and the various studio positions…

    On the technology – I liked BD on paper more than HD DVD on paper for two reasons – one was capacity / bitrate and the was that it was new. The HD DVD idea was to piggy back HD onto DVD where Blu-ray was starting something new altogether, with a planned path for increasing capacity. HD DVD offered short term savings for players and disc replication and as a result of this short sighted approach, capacity and bandwidth are compromised be design. In lossy codec space, bigger is better and more is more – it simply is.

    Otherwise, they are basically the same thing – so why take sides?

    Well, it is costly to make both formats for each movie – and while some of the assets can be shared, much has to be recreated. So, which side to choose?

    Sony Pictures – well, that is a no brainer and perhaps Sony is the only studio that will never drop BD no matter what (just like they continue to release UMD movies). The are also probably the least likely to ever release HD DVDs.

    The others are more interesting. Fox I think wanted more control of the format and better copy protection. I have read that it was Fox that required BD+, not Sony – so they have a lot invested in this. When you say the studios have nothing to lose by releasing on both formats, I think that Fox will disagree, particularly when you see titles like Heroes on bit torrent before release date.

    Disney I think likes the region coding and capacity. They ditched their own supported HDi in order to go BD, so they must have had good reasons.

    Universal – I have no idea why Universal was so behind HD DVD – perhaps the replication costs savings that to so generously keep every penny of.

    Paramount – they were doing so well with using the full capacity of BD and even adding lossless audio on the ill-fated Blades of Glory BD. Oh well…

    And Warner gets to release on both and be happy. Good for them.

    The PS3 thing may also have been key in the studio decisions. Whether that worked out as they had hoped I have no idea.

    Personally I don’t see any technical reason not to release on Blu-ray though I do see technical reasons that a studio might not want to release on HD DVD. I can see that there may be financial reasons for a studio to not release on Blu-ray.

    It would be nice if we could move on and just collect movies – and that is one reason why I think that the Paramount decision is bad for HD Media – it can only serve to draw out the whole ordeal a whole lot longer.

  16. Ralph on August 31st, 2007 12:21 am

    Dave, spoken like a true enthusiast.
    Letís hope this whole thing blows over quickly and let the best stand, because I just want to get back to my collection. Like we all want to.

Feel free to leave a comment...If you have not commented before, your comment will be held for moderation.
and oh, if you want an Avatar to show with your comment, go get a gravatar!