Paramount and Dreamworks Go HD-DVD Exclusive

[Woochifer]

Hmmm. Well thats good news for me. At least I know my 360 will be playing new movies for longer....

Still I hope this thing gets resolved soon enough.

On a side note, Wooch have you seen that all NEW 360's will be coming with the HDMI out. Not just the Elite line. Perhaps it should have been that way from the beginning, but now it appears that all players will have it on deck.

Yup, it's a case of "about freakin' time!"

Seems that if Microsoft wants to make things more interesting, they should just integrate the HD-DVD drive into the 360 ASAP. Again, it's something they should have done a long time ago, but at this point it seems to cost them less by bribing neutral studios into dropping Blu-ray (reportedly $150 million for Paramount and Dreamworks).

[Groundbeef]

Yup, it's a case of "about freakin' time!"

Seems that if Microsoft wants to make things more interesting, they should just integrate the HD-DVD drive into the 360 ASAP. Again, it's something they should have done a long time ago, but at this point it seems to cost them less by bribing neutral studios into dropping Blu-ray (reportedly $150 million for Paramount and Dreamworks).

Although I would agree that it would prop up HD-DVD more if they were to incorporate it, it would cut into the pricing advantage that the 360 is enjoying over the PS3. And although PS3/Sony has been trying to get people to belive that every PS3 has converted every user into a major Blu-Ray buyer, its not the case. I'll look up sources, but it may be as higher than 30% dont even realize the PS3 plays movies. With MS, if a consumer is buying the HD Drive, its to PLAY MOVIES. So, MS may be able to show that X players are being sold, translating directly into movie sales.

As far as "bribery" thats a bit of a loaded term. If they are out spending Sony, then shame on Sony. Seems to me that they have been caught flat footed AGAIN, and MS has just once again pulled a bit of thunder away from Sony. This has been been SOP for the past few months as Sony has lost exclusive after exclusive in the gaming realm.

They have gotten (Sony) to comfortable and appear to be riding on the good fortunes they have had in the past. Its just not working for them now. Money talks, and BS walks as the saying goes.

[Woochifer]

Although I would agree that it would prop up HD-DVD more if they were to incorporate it, it would cut into the pricing advantage that the 360 is enjoying over the PS3. And although PS3/Sony has been trying to get people to belive that every PS3 has converted every user into a major Blu-Ray buyer, its not the case. I'll look up sources, but it may be as higher than 30% dont even realize the PS3 plays movies. With MS, if a consumer is buying the HD Drive, its to PLAY MOVIES. So, MS may be able to show that X players are being sold, translating directly into movie sales.

It would cut into the 360's price advantage only if Microsoft chooses to pass the unit cost increases along to consumers, which is why I presumed that it's cheaper to pay the studios to drop Blu-ray than to add HD-DVD support to the 360 (and also a lot cheaper than the costs that MS had to write off to fix the 360's motherboard problems).

Frankly I don't see anyone saying that "every PS3 has converted every user into a Blu-ray buyer" so I don't know where you've been reading that. But, no one looking at the market objectively denies that the PS3 has given Blu-ray a decided advantage in the installed user base.

As far as "bribery" thats a bit of a loaded term. If they are out spending Sony, then shame on Sony. Seems to me that they have been caught flat footed AGAIN, and MS has just once again pulled a bit of thunder away from Sony. This has been been SOP for the past few months as Sony has lost exclusive after exclusive in the gaming realm.

As a purely self-serving business maneuver, this was brilliant on Microsoft's part. It completely blindsided the industry, which had been anticipating Universal eventually going neutral and effectively ending this format war. With Paramount (and its distribution of Dreamworks) going HD-DVD exclusive, Microsoft has basically bought time to ramp up its HD downloading model by stifling growth in the HD optical disc market. It's great for Microsoft (and maybe Toshiba), but it benefits nobody else since HD-DVD owners were already getting releases from Paramount anyway.

Bribery is a loaded term, but I think it's appropriate in this case because HD-DVD's major studio support is now entirely paid off by outside interests. Universal has been getting paid by Toshiba, Warner has a direct financial stake as a DVD and TotalHD patent holder, and now Paramount and Dreamworks are getting upwards of $150 million from Microsoft. Unless someone has information to the contrary, I haven't read anything about Sony or any of the other Blu-ray partners doing any kind of payment or in-kind considerations in exchange for studio support.

The market structure since Warner and Paramount originally went neutral in late-2005 had been setup with Blu-ray holding most of the advantages, and the sales lead that Blu-ray built up should not have been a surprise to anyone. Up to this point, Blu-ray has been outmaneuvering HD-DVD for the past 9 months, so I don't know where you get this idea that "Sony" (Blu-ray is more than just Sony) got "caught flat footed AGAIN" (how can Blu-ray get caught flat footed "again" if they have consistently outsold, outreleased, and outpartnered HD-DVD since then?). This is really the first bit of good news for HD-DVD since that time, but no denying that it's a huge coup that could very well end any chance of Blu-ray winning the format war outright.

Now, with this change in the studio support, the HD optical disc market is dangerously close to playing out the original scenario envisioned in early-2005 with the studio support evenly split, and many analysts predicting a HD quagmire with market confusion, limited consumer uptake, and both formats eventually failing as other technologies come to market. The market still can eventually go to the dual format model that Warner envisions, but going dual format includes higher costs for hardware and discs, which again impedes adoption of HD optical discs.

[Robert-The-Rambler]

As an owner of 4 HD-DVD players I'm smiling at this news giving some hope that my investment is not a waste. I was getting a bit nervous.

[PeruvianSkies]

As an owner of 4 HD-DVD players I'm smiling at this news giving some hope that my investment is not a waste. I was getting a bit nervous.

And why exactly (besides exaggeration) do you have 4 HD-DVD players???

[Robert-The-Rambler]

And why exactly (besides exaggeration) do you have 4 HD-DVD players???

I like to have HD movies wherever I might have my fanny placed and HD-DVD in bed is a wonderful thing with a nice little sound system and a 720p TV.

[PeruvianSkies]

I like to have HD movies wherever I might have my fanny placed and HD-DVD in bed is a wonderful thing with a nice little sound system and a 720p TV.

So what are the 4 rooms that you have it set up in and do you have them all connected to TV's or just the one?

[Rich-n-Texas]

And why exactly (besides exaggeration) do you have 4 HD-DVD players???

I wouldn't put it past him PS. Remember this:
Pictures of my Home Theater with 8 Behringer EP2500s

[PeruvianSkies]

I wouldn't put it past him PS. Remember this:
Pictures of my Home Theater with 8 Behringer EP2500s

How could I forget the 8X8 room with 4,000 watts of sheer noise.

[pixelthis]

As an owner of 4 HD-DVD players I'm smiling at this news giving some hope that my investment is not a waste. I was getting a bit nervous.

STAY nervous.
The logic (or lack of) of buying FOUR players from a format not yet established aside,
the fundamentals of the market stay the same.
This just means that toshiba will regain a little more investment before their "format"
tanks.
About all it means short term is a lower price for BLU players, long term it means almost nothing

[PeruvianSkies]

STAY nervous.
The logic (or lack of) of buying FOUR players from a format not yet established aside,
the fundamentals of the market stay the same.
This just means that toshiba will regain a little more investment before their "format"
tanks.
About all it means short term is a lower price for BLU players, long term it means almost nothing

Ya just don't quit do ya???

[pixelthis]

Ya just don't quit do ya???

NOPE, and you just dont listen do ya?
Both of these "formats" are the "old" way of thinking, that in order to buy media
you have to get "physical", but the new way of thinking is why buy when what you want
is available on a server somewhere on the planet, available at a moments notice.
We just dont have the petrochemicals to make billions of shiny discs every year just so people can watch movies, downloading is already price competitive with rentals,
with the price of gas going higher downloading looks more attractive all of the time
If the two warring factions had any sense they would team up against their common
enemy, but after three and a half decades of following the electronics industry I have yet
to see anything aproaching "common sense"

[pixelthis]

Of course the end of it all will be downloading as the primary form of "rental",
with whatever format that "survives" (if you want to call it that) the bastion of movie collectors. People are already being trained to download media with ipods, etc,
and they are already downloading movies with gameboxes and cable and the net.
I have always said that this is a THREE player war, with the third "player"
downloading, and that downloading will win.
But for a format that movie collectors will want to archive, they will go for quality
like they did for laser, and hence blu ray will "win".
But only as a format for collectors,
Downloading will win as the "format" of choice for rental, its already my format
of choice

[PeruvianSkies]

Of course the end of it all will be downloading as the primary form of "rental",
with whatever format that "survives" (if you want to call it that) the bastion of movie collectors. People are already being trained to download media with ipods, etc,
and they are already downloading movies with gameboxes and cable and the net.
I have always said that this is a THREE player war, with the third "player"
downloading, and that downloading will win.
But for a format that movie collectors will want to archive, they will go for quality
like they did for laser, and hence blu ray will "win".
But only as a format for collectors,
Downloading will win as the "format" of choice for rental, its already my format
of choice

You are indeed a true 21st Century Nostradamus!

[Groundbeef]

It would cut into the 360's price advantage only if Microsoft chooses to pass the unit cost increases along to consumers, which is why I presumed that it's cheaper to pay the studios to drop Blu-ray than to add HD-DVD support to the 360 (and also a lot cheaper than the costs that MS had to write off to fix the 360's motherboard problems). .

Well, it also goes back to the MS talking points. The 360 is a gaming machine. Those that want the ability to play HD-DVD need to pay for it. Plus if HD-DVD dies, MS is not on the hook for a player that supports a dead format only. As stated before MS has stated if HD-DVD ever dies, they are not against a blu-ray addon.

Frankly I don't see anyone saying that "every PS3 has converted every user into a Blu-ray buyer" so I don't know where you've been reading that. But, no one looking at the market objectively denies that the PS3 has given Blu-ray a decided advantage in the installed user base. .

There is the line I was looking for. "PS3 has given Blu-ray a decided advantage in the installed user base." Yes, in absolute terms, PS3 has expanded the base for players. But the base has not translated directly into movie sales. There are plenty of PS3 users who are either unaware that the PS3 is either HD, or offers HD movie playback.

But, for every HD-DVD addon purchase, you can bet that people are buying HD-DVD's as there is no other purpose for buying it.

Up to this point, Blu-ray has been outmaneuvering HD-DVD for the past 9 months, so I don't know where you get this idea that "Sony" (Blu-ray is more than just Sony) got "caught flat footed AGAIN" (how can Blu-ray get caught flat footed "again" if they have consistently outsold, outreleased, and outpartnered HD-DVD since then?). This is really the first bit of good news for HD-DVD since that time, but no denying that it's a huge coup that could very well end any chance of Blu-ray winning the format war outright..

I was simply pointing out that in this round of fighting, MS has been more nimble, and free with the purse strings. Buying out Paramount is simply another example where MS has either gained an exclusive, or bought into a previously "exclusive" that Sony has had for its own. Sony has lost many more exclusives on the gaming side than MS has in the battle for HD gaming. I guess its not so much a slam on Blu-Ray, other than it appears that Sony seemed to be trying to wrap up the fight, and MS pulled the plans out from under them.

It seems like Sony has everything to lose, and MS can only go up.

[Woochifer]

I was simply pointing out that in this round of fighting, MS has been more nimble, and free with the purse strings. Buying out Paramount is simply another example where MS has either gained an exclusive, or bought into a previously "exclusive" that Sony has had for its own. Sony has lost many more exclusives on the gaming side than MS has in the battle for HD gaming. I guess its not so much a slam on Blu-Ray, other than it appears that Sony seemed to be trying to wrap up the fight, and MS pulled the plans out from under them.

It seems like Sony has everything to lose, and MS can only go up.

Again, you're singling out Sony, when Blu-ray is more than just Sony. Also, Paramount was not an "exclusive" rather they were the only truly neutral major studio (Warner is purportedly neutral, but they've got financial stakes and patents in the DVD, HD-DVD, and TotalHD formats).

The anti-consumer aspect of this action is that Paramount is taking away an option that consumers previously had, and cancelling disc releases that they had previously announced. It's very different than Universal or any of the other "exclusive" studios going neutral, because that would entail expanding market options and have more market-driven justification. At this point, Paramount's move is not market-driven at all, since it entails them purposely taking a payout in order to reduce their product sales. (This happens in other industries as well, and hardly ever to the benefit of consumers)

Like I said, brilliant and very self-serving move on MS' part. Despite the market shift, Blu-ray still has the upper hand, and will likely maintain a market share lead, but they no longer have a sense of inevitability. A lot of things have yet to play out, and everything's setting up for a very interesting holiday season.

[Groundbeef]

Again, you're singling out Sony, when Blu-ray is more than just Sony. Also, Paramount was not an "exclusive" rather they were the only truly neutral major studio (Warner is purportedly neutral, but they've got financial stakes and patents in the DVD, HD-DVD, and TotalHD formats).

Like I said, brilliant and very self-serving move on MS' part. Despite the market shift, Blu-ray still has the upper hand, and will likely maintain a market share lead, but they no longer have a sense of inevitability. A lot of things have yet to play out, and everything's setting up for a very interesting holiday season.

Well, on this board there are those that seperate the Blu-Ray/ Sony segments apart. Travel on over to some of the more gamer oriented sites and they are all wetting themselves either from frustration (Sony) or joy (MS). Like it or not, PS3/Sony has tied themselves together pretty tight with the whole game/HD Blu-Ray movie player theme. So naturally the (Sony) Blu-Ray crowd is none to happy to have gotten the news.
The sense of inevitablity that Sony has had for years is no longer around. That was the point I was making.

And yes, this holiday is going to be brutal. I predict at least one more price cut from both Sony, and MS if things dont pick up. Considering that Sony's 'Price Cut' is simply inventory reduction (after the 60 gig units are out, 80 gig are still $599, and no more 20 gig), they may have to reduce prices still.

[Woochifer]

Well, on this board there are those that seperate the Blu-Ray/ Sony segments apart. Travel on over to some of the more gamer oriented sites and they are all wetting themselves either from frustration (Sony) or joy (MS). Like it or not, PS3/Sony has tied themselves together pretty tight with the whole game/HD Blu-Ray movie player theme. So naturally the (Sony) Blu-Ray crowd is none to happy to have gotten the news.
The sense of inevitablity that Sony has had for years is no longer around. That was the point I was making.

It's not just the "Blu-ray crowd" that's frustrated. As kex pointed out, it's also consumers (like myself) who've been waiting for the dust to settle so that we can put our money on one format and get on with things. All that was left for that to happen was Universal going neutral. But, this decision by Paramount puts the wet blanket on a lot of potential purchases.

From the beginning, I've said that I did not care which format won so long as one format did win, and win decisively, and win quickly. The longer that any format war drags on, the greater the possibility that we wind up stuck with choosing between lower resolution DVDs and HD downloads that are compromised in other ways (time/play restrictions, 720p, low res audio, etc.). And the possibility of both formats failing increases the longer that the format war continues to drag down the market.

And yes, this holiday is going to be brutal. I predict at least one more price cut from both Sony, and MS if things dont pick up. Considering that Sony's 'Price Cut' is simply inventory reduction (after the 60 gig units are out, 80 gig are still $599, and no more 20 gig), they may have to reduce prices still.

I doubt that the PS3 prices will tumble below $400, but I can easily see the Blu-ray player prices going below $300 (some analysts have already projected this). As I pointed out to GM, the player prices could wind up equalizing somewhat because this Paramount deal has bought HD-DVD some extra time, and Toshiba no longer has the desperate incentive to slash hardware prices below cost to prop up their market share. In the meantime, Blu-ray player makers now have extra incentive to reduce hardware prices. Blu-ray already had things on tap for the holiday season to try and deliver a knockout punch on HD-DVD. Obviously, the knockout won't happen, but the Blu-ray Association is reportedly going to augment their holiday marketing campaign. Just yesterday, Fox responded by announcing a large release slate through the end of the year (after not announcing any new Blu-ray titles since March), and Disney is reportedly teaming up with Panasonic to launch their widely-anticipated Platinum series Blu-ray titles.