Warner Swayed By $500 Million From The BDA

Posted by Tyler Pruitt on January 4, 2008 
Filed Under: Blu-ray, Format War, HD DVD, Studios


According to a trusted source that was close to the negotiations, Warner and FOX were working on a deal to go Exclusive to HD DVD as recent as last week. Our source tells us that Warner was only willing to go to HD DVD if FOX would go with them. Their thinking was if they just went to HD DVD by themselves, it would not end the format war. Early this week FOX was paid an undisclosed amount to remain exclusive to Blu-ray. With the FOX deal falling through, Warner had no choice but to accept the BDA’s $500 Million offer to go Blu-ray exclusive. We do wonder if FOX was just playing the HD DVD side, while having no intentions of ever switching.

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43 Responses to “Warner Swayed By $500 Million From The BDA”

  1. Dave Cowl on January 4th, 2008 6:03 pm

    Hmmm… should we be skeptical? After all, many people didn’t believe that Viacom was bought for HD DVD even with reports from traditional press… The Fox story is interesting. I have heard from other sources that the number was $480M. Still a shitload of money… I have actually been aware of these rumblings since the Sept/Oct time frame (though sworn to secrecy – not that anyone would have believed me) – this one has been in the works for a long time…

  2. DS2 on January 4th, 2008 6:16 pm

    Wow, that’s an amazing story, so i wouldn’t be surprised to learn it was true.
    500 million, huh?  Well, good to know all that Blu-side pissing and moaning about Paramount taking 150 mil was justified and that the Blu was able to win on merit alone.  Oh, wait–it didn’t.
    I don’t think I’m prepared for the flood of hypocrisy.

  3. Jimbo on January 4th, 2008 6:19 pm

    that’s the dumbest post I’ve seen in all these discussions.  Do you think BDA would offer 500M if HDA was offer 100m?  The HDA offer must have been close or higher than 500M to be competitive with the BDA offer.  There isn’t a good guy or bad guy in all this.  It’s all about money and future revenue.  What did you expect?  Both sides to take the "high" road and not offer any money?  BOTH sides were tying to buy off Warner.  And of course it would have been more than the 150M that Paramount got.  Warner was the last studio left.

  4. Dave Cowl on January 4th, 2008 6:29 pm

    And the denials… see above. In the reality, $500M would have been a good investment if it does in fact end the competition…

  5. James Bond on January 4th, 2008 6:46 pm

    Very nice.. further lackluster reporting without a smidge of proof to back it up. It must feel great to spread crap like this. People want to hear this so you give it to them…

  6. Arron Clements on January 4th, 2008 7:38 pm

    I think your sources are talking out of their a-holes and it doesn’t matter now does it? It’s over.

  7. DS2 on January 4th, 2008 7:40 pm

    So, given your assessment that it’s all about money and future revenue, then how is criticizing the Paramount deal perfectly okay?  That’s what the Blu supporters were doing when that deal went down.
    The point is business is business, and I gather you know that.  Good guy, bad guy, or no, Sony ponied up the cash this time, regardless of any other offers on the table, and the cash is what made the deal.(if the story is true in the face of the denials)  That’s all I’m saying.

  8. Tyler Pruitt on January 4th, 2008 8:55 pm

    My source is has has never given me false info, and would have no reason to lie. 

  9. Jesse Ruderman on January 4th, 2008 9:02 pm

    When I load this page using Safari 3 on Mac, I get an alert:


  10. Tyler Pruitt on January 4th, 2008 9:13 pm

    Jesse, the WYSIWYG editor plugin for comments has a bug with safari 3, they’re working on a fix.  It sucks, I know.

  11. Devils Advocate on January 4th, 2008 9:24 pm

    I agree with Tyler.  I myself have heard that there was indeed a $500 million payoff.   Guess what?  I dont care.   If this is what it took to end the format war THEN SO BE IT. 

  12. dobyblue on January 4th, 2008 9:57 pm

    Sorry but Fox were never talking about HD DVD. They’ve known how this would play out for a long time.
    Your rumour is FUD, plain and simple, and so is your source.

  13. hd nOOb on January 4th, 2008 10:07 pm

    I think they were bamboozaled. Does any one notice that the format we are now supposed to support has alot or very arrogant nasty ppl.

  14. hd nOOb on January 4th, 2008 10:09 pm

    One more thing. If true how come MS didn’t step in?

  15. mntwister on January 5th, 2008 12:07 am

    More rumuors more rumuors. Gets very tiring. Anyone can make things up like this. It could be true and if it is, so what? Paramount played the same game, that’s business these days.

  16. mntwister on January 5th, 2008 12:08 am

    More rumuors more rumuors. Gets very tiring. Anyone can make things up like this. It could be true and if it is, so what? Paramount played the same game, that’s business these days. One person makes a claim and the news spreads to all the web sites. It’s happened many times before and was many times not true.

  17. PJ on January 5th, 2008 12:26 am

    I think the writer of this article is just bitter that his format HD-DVD will be obsulete. Warner bRos has all ready confirmed no money was exchanged unlike the HD-DVD paying $150 million to go HD-DVD exclusive.
    Here is the link for proof

  18. PJ on January 5th, 2008 12:27 am

    Warner: No Payoff for Move to Blu-ray
    Warner Home Entertainment President Kevin Tsujihara says the studio took no pay-offs to exclusively back Blu-ray.
    In a post-announcement conference call, Tsujihara flatly denied rumors that studio had accepted anywhere from 250M to $500M in exchange for dropping its HD DVD format support.
    According to the exec, Warner’s sole motivation in dropping its HD DVD format support was to ensure growth of the "category" and the long-term health of the industry.
    "The packaged media business is a $42 billion dollar business worldwide at the retail level, and we [Warner] have the largest market share of anybody," said Tsujihara. "From our perspective, the most important piece of this whole puzzle is, "How do we get growth back into this category?" That far outweighed anything else."
    This [decision] was one hundred percent around what makes the most sense for the consumer, the retailer and the industry. This was not a bidding war. This was all about what was best, strategically, for us."
    Stay tuned for more news from the Tsujihara conference call shortly…

  19. Stormkeep on January 5th, 2008 12:57 am

    What a load of hogwash.  This is nothing but internet rumor with no reliable evidence that is spreading on the net.  Warner is publicallyl traded, if this is true, it would be available with PROOF to the public, and would be in newspapers and industry magazines, not just plastered all over the net where any  hack can claim to have "inside information."

  20. Jessie James on January 5th, 2008 3:57 am

    This is the most blatent form of crap I have ever seen.  Lol a PAYOFF huh?  Just like HD-DVD was right?  Yeah.. sure.  You HD-DVD fanbois keep telling yourself.  Pretty soon you all will be reduced to a circle jerk because your so skeered.
    Give it a rest with the shitty news reporting.  That’s the problem with the internet – any idiot can make a story/post.  Too bad none of it’s real.
    Good job on ruining your rep dude. :)

  21. Mike on January 5th, 2008 4:30 am

    Good thing Warner got a lot of money.  It certainly more than makes up for the money they will lose from people like me who will now never purchase another Warner DVD, HD DVD or Blu-Ray again.  

  22. Rich on January 5th, 2008 4:44 am

    WB went to BR thanks to M$ who wanted exclusive rights to digital dowloads for HD members

  23. Winkerz on January 5th, 2008 4:58 am

    If this is true and it does end the format wars in favour of BR, I really hope consumers switch to HDDVD anyway and show Sony the support they deserve – i.e. naff all! I hate Sony, I hate their business strategies, I hate the way they like to control their own proprietry formats. If BR becomes the format of choice, I really hope it comes back and shafts the consumers up the wrong-un.Apart from storage space, HD-DVD is the better format for the consumer, it’s cheaper to produce, is easer to create backup copies of the media you own and has better interactive support for movies. The only real thing BR is suitable for is PC storage, and I wouldn’t trust Sony with that either, they’d probably infect your computer with a rootkit virus like they did before :(

  24. Aurvant on January 5th, 2008 8:19 am

    I’m glad that everyone takes this story as "truth" considering that there is no actual -report- to comment on. Also, the lack of any mentioned source despite *gasp* an "inside source close to negotiations" also sounds suspicious.Why not ask the question: "Since when were they in negotiations, or WHY were they in negotiations but nobody picked up on that information until the day AFTER Warner went BR exclusive?"This article is technically a hit piece to try and steal the thunder away from Blu-Ray after they effectively just ended the format war. How about revealing your "source" or else your post is nothing but inflammatory heresay. 

  25. Bill on January 5th, 2008 8:27 am

    Who cares?  How is that any different than HD-DVD paying off Paramount?  The $$$ amounts matter little, especially since Warner is much larger–a bribe is a bribe.
    The important thing is that the format war end soon so that consumers can shop with confidence and not have to worry about another Betamax or Laser Disc, etc.
    I finally feel it’s safe to go blu now.  I applaud Warner for taking a stance rather than allowing consumers to be confused and torn between two formats with one side eventually failing.

  26. Mark on January 5th, 2008 12:47 pm

    Anyone that thinks there is money behind this, is basically either stupid, or a HD DVD fanboy.

    Warner went Blu exclusive to end the format war, based on Xmas sales, global sales of Blu-ray players, and historical Blu-ray performance.

    Seems anyone idiot can start a rumor on a blog these days.

    Here is mine:

    “According to my trusted source that was close to the negotiations, HD DVD camp offered 150million for Warner to go HD DVD, Warner told them to take a hike, they are not dirty like Paramount.”

  27. Tyler Pruitt on January 5th, 2008 1:37 pm

    PJ, So you trust every word that an executive says as gospel? I just wanted people to get the real details of how things went down.

  28. Merrick97 on January 5th, 2008 3:11 pm

    Tyler, you do have some truths, but based on conversations I have had with members well connected to both camps,  this is what I believe went down based on connecting the dots.  I am just connecting the dots here.This is MY interpretation and opinion. I believe that Fox NEVER had any intention of EVER joining the HD-DVD camp.  What really happened is that Warner Brothers was approached by the HD-DVD camp with an offer to go HD-DVD exclusive, but they said no, UNLESS they could get another bluray exclusive studio to go not neutral, but exclusive.  In otherwords, they would go HD-DVD exclusive ONLY if could have been a game changer and bringing Fox with them would have made it so. So Warner apparently went to ask Fox and said they would listen, because it did have a chance to end the war.  However, Fox made the demand to Warner if they didnt go HD-DVD exclusive then Warner would go bluray exclusive.  So, Fox backed out and Warner went bluray exclusive. Incentives were involved, but the lets not leave out the fact that Toshiba was also offering huge incentives as well.Not only that, but the way I see it the HD-DVD has no right to complain about any payoffs or incentives being offered.  HD-DVD camp lost their own game.       

  29. Maxim on January 5th, 2008 3:53 pm

    I am an HD DVD player owner and I am mad and pissed off. On the birght side:
    – I can still watch HD DVDs for as long as Netflix will carry them- the upconversion of SD DVDs to 1080p on my Toshiba HD A35 is amazing quality- I paid half for HD A35 of what PS3 or other stand-along player costs
    I think Microsoft could bribe another studio to go HD DVD explusive easily. Question is: will they?
    Toshiba is the one who has the most to lose.
    Get prepared for Amazon and other retailers to sell off HD DVD players and disks for next to nothing.

  30. Nick on January 5th, 2008 4:14 pm

    For all you guys wondering, this probably wont end the format war, it just increased blu-rays incredibility to other studios. Just as soon as Warner went blu, New Line studio went blu. but there are other studios that are still out there.
    After that, HD DVD ended out canceling there press conference at CES. $500 mil is a still alot of money, and HD DVD was only offering $100 mil, that would jus be dumb to fork over that much, which must mean that HD DVD had to offer something close to BDA’s price.
    And why didnt Microsoft step in? becuz they themselves dont back HD DVD. in an interveiw with one of thier reps, it was said that he doesnt support HD DVD, he only keeps it so that that there main competitor, Sony, doesnt get all the money from the HD profit.
    i hope this cleared some stuff up for you guys, any other questions?

  31. Tyler Pruitt on January 5th, 2008 4:39 pm

    I have heard Toshiba’s final offer was $300 million.

  32. Merrick97 on January 5th, 2008 5:39 pm

    Tyler, Toshiba did indeed offer $400 million.  Ask DV

  33. John Seymore on January 5th, 2008 10:53 pm

    "Just as soon as Warner went blu, New Line studio went blu." New Line is owned by Warner, so not really much of a shock there.Here’s the thing about HD-DVD versus Blu-ray: 99% of Blu-ray fans are kids who got a PS3 for Christmas, and then they loyally went forth to evangelize the format (deny it all you want, but I guarantee it is true for every foaming BR fanboy). Every HD-DVD owner is someone who actually made a *choice* for a specific video format.Pretty much by definition, the only "fanboy" can be a BR fanboy.Warner was paid off, which is obvious to anyone and everyone. Quit the nonsensical "they weren’t…but even if they weren’t so was paramount!" Pick a position and stick with it.For those of us who don’t want to use a shitty game system as our movie player, this sucks. Consumers are getting fucked because Sony used their game system to trojan horse a DRM-overloaded, still fuzzy format on the world. Cheer all you want, but this is a loss for every consumer.     

  34. Steffen on January 6th, 2008 3:51 am

    I cannot see that being cash offers! Must be something like reductions in royalties or format license fees, etc.

  35. AX on January 6th, 2008 2:51 pm

    Is it just me, or did the timing of this announcement really blow?  If Warner wanted to portray a company of some intergrity then they should have waited until after CES to make their announcement.  As an avid HD DVD supporter, I find their In Movie Experience to be amazing.  Anyway, I don’t like how they just left Toshiba and the rest of the HD DVD camp out in the cold and made their announcement when everyone was heading to and setting up for CES.  I guess they didn’t want the HD DVD camp to make a response or be prepared to handle this announcement but why would it even matter to Warner?  Now I understand how this company would want to merger with AOL.

  36. AX on January 6th, 2008 6:55 pm

    Hmmm….  I wonder if Warner will still release HD DVDs overseas like other companies that are exclusively BD in the states.  If so, this could be an option for getting some movies (such as the last two Harry Potter films) on HD DVD.  I know it’s not ideal, but it would help lessen the blow. 

  37. Merrick97 on January 6th, 2008 9:02 pm

    Im all for Warner doing anything they can to lessen the blow, because I know how pissed I was at Paramount when they discontinued everything. But oh well.  Paramount will be back soon. 

  38. Carl Simon on January 7th, 2008 11:45 am

    John Seymore, you have obviously never heard about
    they are probably the biggest HD-DVD Fanboys lol..
    99% are kids who got a ps3 for christmas….WOW!!! that made me laugh..

  39. Nick on January 8th, 2008 7:03 pm

    i agree with carl, john  do you hav any idea wat your talking about? if 99% of blu ray "fanboys" conformed to BR when they got a ps3 for christmas, then where is all the sales from BRD players that are still kicking HD DVD’s a** in this competition, get your facts strait, then come here and throw your dumb nonsense at us

  40. Philip Alexander on January 12th, 2008 12:18 pm

    Like a lot of people I expected Warner to continue to stay format neutral. At this point I don’t think they needed to choose sides, so I believe some money changed hands to make them go Blu.

    In any case, I think Blu Ray is going to become another niche market segment for AV fans and thats it. DVD is so well established and the costs for DVD films and equipment is so cheap that Blu Ray hasn’t a chance. Upscaling DVD players do a good job and these are so cheap that consumers won’t bother with Blu Ray.

    DVD global sales are gradually falling, and HD is seen as a way to counter that, but with higher costs I can’t see this happening. People should be wary and stick with a good upscaling DVD player.

  41. Pumi on January 15th, 2008 6:32 pm

    I love how when HD-DVD is accused of making payouts, it is the gospel truth according to BD fanbois but god forbid the story reflects the same behavior from the BD camp. Now this sort of news is Blasphemy, or crap journalism, or any idiot with a blog can do this. GIVE ME A FUCKING BREAK. Both sides are guilty of paying off the studios. You’d be terribly naieve to think that Sony paid absolutely nobody. With their track record of non adopted formats, it would make sense that they would make extra sure that they suceeded this time around.


  42. JP on January 22nd, 2008 7:19 am

    I feel sorry for all of you Blu Ray fans, because unless you own a PS3, you’ll now need to go buy a new player just to be compatible with the new BD 2.0 format!

    HD DVD already has all of the features that Sony is adding to the new BD 2.0 (PIP, online features, and on-board memory).

    Sony in a rush to win the game, shipped out a stripped down version of what was to come, thus screwing all of you early adopters to BD!

    The sad thing is, that unless you own, or plan to own a PS3, you won’t even be able to buy a new BD player until the fall of ’08 – anything you currently own, or can currently find in the stores will be essentially obsolete in a few months…yet they still all cost more than HD DVD players.

    Sony might have the push right now with the studios, but I think this is enough to piss off it’s current customers who’ve spent $500 plus on a player, and will now have to replace it in less than a year. This might just swing past Sony supporters over to the HD DVD side.

    I own an HD DVD player and was also planning to buy a BD player. I’m really nuetral in this war – I just want the most movies available, which requires me to have both units at this time, but now I have to wait for a year before I can even buy a new updated BD 2.0 player, then how long until the next update that requires me to buy yet another?

    No, I don’t want a PS3, not as part of my entertainment system – to buy a gaming console just to watch movies is a bit much.

    Oh yeah, if you think that this is the only format war, Google “Super High Definition” and you’ll find that they are already working on SHD to replace HD – ushering in new SHD T.V.’s and SHD compatible disc players. Then all of our HD t.v.s and dvd player (whether BD or HD DVD) will go the way of SD t.v’s and dvd’s.

    No format or technology is ever safe from upgrades or obsolescence so there really is nothing to fight about here. Instead, you should direct your hurt feelings towards those that hurt you (your pocketbook) like Sony for releasing a primitive product too early, later adding upgrades causing your BD players to be nothing more than paper weights, thus screwing those of you who faithfully purchased one thinking that you were getting your money’s worth.

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