Viacom Earnings Report Confirms Paramount Payout from Toshiba

Posted by Dave Cowl on May 5, 2008 
Filed Under: Format War, HD DVD, Paramount, Studios

I know for many this is not interesting news since the format war is over and done (if so feel free to skip to the next post), but for some who believed that HD DVD won Paramount exclusivity on the merits of the format and others that seek proof of their belief that Toshiba paid a large sum for exclusive HD DVD support from Paramount, we have some potentially interesting information.

In a report from Variety about earnings for Viacom we read of a one time payment from Toshiba. The article refers to a “22% bump in home entertainment revenue on one-time items including a $29 million payout from Toshiba for Paramounts exclusive backing of the HD-DVD.” The article goes on to say that “Viacom said homevid revenue would have been down slightly if the payout wasnt included due to lower catalog sales.”

It is now 100% clear that Viacom took money from Toshiba to drop Blu-ray Disc.

The question that perhaps remains is whether Warner also accepted a payout to do the opposite. Perhaps financial reports from Warner in the future will reveal that also.

Related posts:

  1. “Blue-Ray Tech.” Responds Strongly to Paramount/HD DVD Deal
  2. How HD DVD Almost Won The Format War
  3. Paramount Jumps Over The Hedge To HD DVD Exclusivity
  4. Paramount’s HD DVD Decision Decried by Analysts
  5. Blu-ray Market Share Falls Further Week Ending May 4th


11 Responses to “Viacom Earnings Report Confirms Paramount Payout from Toshiba”

  1. webdev511 on May 5th, 2008 6:09 pm

    That’s a far cry from the $150m rumored by the NY Times story.

    I wonder when we’ll see how much Warner going exclusive and the others got for staying Blu the end of last year?

  2. Kevin Murphy on May 5th, 2008 6:10 pm

    It also shows that the numbers being thrown around of hundreds of millions of dollars were wildly inflated. I suspect that there were in-kind and joint marketing deals (as was said) that accounted for most of the numbers. The $29 million probably covered the writedown of the cancelled blu-ray title development.

  3. Felix on May 5th, 2008 6:47 pm

    not surprised of the payoff. boo toshiba

  4. Mi on May 5th, 2008 8:01 pm

    And there’s the fact that they only got that one payment since HDVD died before the rest of the money came due…

  5. Dave Cowl on May 5th, 2008 8:47 pm

    I believe Mi is correct to a point.

    The NYT said $50M for Paramount and $100M for DreamWorks Animation if I recall correctly…

    It would seem that $29M is within the scope of that number if the full term of the agreement was never met time-wise (which it clearly wasn’t since Bee Movie was supposed to be a part of it and then was not).

  6. Ryan on May 6th, 2008 4:48 pm

    It’s all payouts. No one would just sign a contract for exclusivity without any money involved directly. You wouldn’t just sign up for a cell phone carrier or tv service without getting some kind of offer, would you?

  7. Belard on May 7th, 2008 1:58 am

    The Paramount/HD-DVD pay-off was VERY public. geez. In a sense, Paramount STILL lost money with the buy-off because they didn’t sell as many titles with blu-Ray and have hurt the HiDef market before the USA hit our current recession.

    WB/Sony have both stated that THERE IS NO PAYOFF. And from a guy on the street, even I see there is no REASON for a pay-off. HD-DVD was dying ever so slowly… Paramount slowed the bleeding, but wasn’t going to save the patient.

    Look at the movie release schedule on JAN 1st 2008… Paramount/Dreamworks & Universal (P-U) had only a few exclusive titles come out… they had very little on the table. WB had the MOST HD-DVD titles scheduled and they were NOT exclusive to HD-DVD. P-U were already doing little to help HD-DVD. WB was the doctor that said “we gotta pull the plug, she’s suffered so much”…

    A few HD-DVD fanatics came up with the $150 figure, it spread among them and became “urban legend”.

    As stated many times before… both WB & Sony say no pay-off. And their public earnings report will show if its true or not. For them to LIE about that will get them in HOT TROUBLE. They can BS with phrases like “we will continue to support this dead format because we love it so well” all day… but not make up stuff about money.

    PS: this site may need to know that Blu-Ray appears to be coming to Xbox360 soon, perhaps built-in.

  8. Dave Cowl on May 7th, 2008 9:47 am

    I think the $150M was mentioned in the NYT article … IIRC… I am not really in any mood to go back and look it up :D

    I was at the press conference when Warner was asked if they took money – iirc the response was ambiguous – something like ‘the _main_ reason was the marketplace’. So maybe there was a payout but the marketplace was a much bigger reason.

    In any case I imagine that the truth will out some day.

  9. SunToucher on May 7th, 2008 9:34 pm

    No doubt everyone has a theory. I’m wondering if it really matters who paid off whom and with how much. I didn’t care then and I still don’t care now.

  10. SunToucher on May 7th, 2008 9:35 pm

    I concur Dave, eventually whatever happened will come out.

  11. Blue_On_Blue on June 17th, 2008 7:40 am

    @ Belard -

    Do you actually take the words from Sony and Warner to be the whole truth?

    They are not under any legal obligations to say anything truthfully regarding any pay offs but they are under legal obligations, as corporations, to account and publish their earnings.
    We can only wait and see that their earnings were at the end of the year — so it would be interesting to see Sony’s and Warner’s earnings. If in the same quarter it shows Sony having a $200 million expense and Warner’s a $200 million gain, then our suspicions will be dead on the money (no pun intended)!

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