Paramount drops Blu-ray

[2099net]

Well, it looks as if Michael Bay is throwing a temper tantrum because of Paramount's decision to go HD-DVD exclusive.

http://www.engadget.com/2007/08/21/mich ... -ray-no-t/

Michael Bay responds to Paramount's abandonment of Blu-ray: "No Transformers 2 for me!"

So by now you've heard that Paramount has dropped support for Blu-ray right? Good, so has a notable Hollywood director. Michael Bay -- the man behind "Transformers," "Bad Boys," "Pear Harbor," etc. -- just threw down with Paramount in his personal blog. In a forum post titled "Paramount pisses me off!", he states, "I want people to see my movies in the best formats possible. For them to deny people who have Blu-ray sucks! They were progressive by having two formats. No Transformers 2 for me!" That's right Mike, aim your PS3 right at their coffers!

-------------------------------------------------------------------------------------

Yet he made Pirates of the Caribbean 3 when Disney only supports Blu-Ray? So much for wanting progressive studio support. I think, ultimately, money will win over any "artistic" integrity.

Also Mr Toad are you sure it was Microsoft who paid Paramount? It's just, generally Microsoft has little invested in the HD DVD format - it doesn't own it, have a console with HD DVD built-in. People keep citing Microsoft as a big evil corporation who is manipulating the format, but really, I think Microsoft have bigger fish to fry and worry about.

It interesting the Paramount executive made mention of the fact HD DVD had finalised specs. As most will know the new Blu-Ray 1.1 profile players are going to be available from October 2007, but realistically if any studio wants to take advantage of the 1.1 features, it's going to be a bit of logistical nightmare with so many stand-alone players out there which are uncompatible, and (to date) no word on a PS3 firmware update. And could the new PS3 80Gb models have some hardware changes meaning those will be the only ones capable of 1.1 support? (which would also explain Sony wanting to sell the 60Gb models as quickly as possible?)

I did think the PS3 would be able to do 1.1 easily, but I must confess the lack of any news, even strong rumours on it is worrying - there's what 8 weeks or so to D-Day now? Perhaps one of Paramount's reasons is because it's expecting a huge amount of brownstuff to hit the fan when everyone discovers their current Blu-Ray players don't work 100% with 1.1 discs, and perhaps it's expecting this bad publicity to boost HD DVD sales?

[Luke]

Yet he made Pirates of the Caribbean 3 when Disney only supports Blu-Ray? So much for wanting progressive studio support. I think, ultimately, money will win over any "artistic" integrity.

In all fairness, Bay didn't have anything to do with the Pirates movies. His sugar daddy Bruckheimer passed him over on that ship.

I've got to admit the way this format war talk goes on and on, with so little of the general public committing to either makes me think everyone, especially those sinking so much money into "one side", would do better to just forget next-generation and look at working together for a single next-next-generation format. Then again, that doesn't seem likely with Microsoft wanting downloads and the electronics corporations probably not. And then what percentage of the population is dissatisfied with DVD anyway and sees genuine room for improvement in a way they care about?

Disney in particular is ticking me off with their antics. It boggles my mind how much money they're missing out on by devoting so much effort to Blu-ray and completely neglecting the DVD format for all catalog content. Has any technology ever won over the public by a company scaling back the previous one (i.e. single-disc <i>Cars</i> and <i>Ratatouille</i>) to make the new one look better?

[2099net]

Here's one view on the matter from http://www.hometheaterspot.com/fusionbb ... st/828416/

Notice regardless of if Microsoft did or didn't pay money to Paramount, Sony/BDA was in effect doing the same with various subsidies.

Since the announcement, I have done some digging with some industry sources and have found out some interesting news.

First off, the interactivity has had a role in all of this actually starting with the release of Transformer onto HD DVD. There will be PiP features on the film that will be released on a HD-30 disc. In order to do it on BD, they had to do two separate encodes on the disc similar to The Descent on BD, one with PiP, one without since no players released thus far have dual video decoders in them on the BD side of the equation. This costs the studio more money in the long run. When you add in the FACT that the subsidy from Sony on BD-50's is now over, the cost of getting a movie on a BD-50 compared to a HD-30 disc is about 50% higher, the economies of scale start to make a difference. Budget figures on the sales of a Transformers HD DVD is in the neighborhood of 200,000 to 300,000 copies the first week of sales. With a BD, the sales may have been higher, but in the end, the BD would have been a losing propsition for the release. Also, Paramount had two separate encoding facilities handling their HD DVD and BD releases, so the cost of encoding the discs was much higher as well. Also, this caused more work because both encodes had to be approved by the directors before they went to manufacturing, which in some cases, they didn't look the same (Coming to America as well as a yet unreleased film that will now only be HD DVD).

BD may be the best thing since sliced bread, but the studios are in the business to make money, and right now, they can make more money overall with HD DVD. Is it short sighted? Maybe, but it is money in the bank especially when you consider the reported $150 million dollar payoff. BD had all of the momentum up until this point, but that can change pretty quick, especially with the price of the players. My local Costco has both the A-2 and the Sony BD player ($249 vs $475) and according to the guys who work in the electronics department, the A-2 is selling much better than the Sony for the past two weeks by a margin of 3:1. In the long run, this will start to have an impact and eat into the PS3 advantage that BD enjoys at this point. With this new announcement it will be at least 2 more years for all of this to shake out.

On a separate matter is Warner. What will Warner do now that Paramount has announced this support for HD DVD? They have all along been favoring HD DVD slightly since they get the royalties from the technology. Will they suddenly do the same thing as Paramount but without the payoff? The biggest issue right now for the "neutral" studio will be how well the "interactive" features on the BD players come into play on 10/31 of this year. If new players are slow to come out or if there are a lot of software issues with the old players with the new Java programming, then I think they may jump ship as well (just a theory on my part). It will certainly be an interesting 4th quarter, that's for sure!

[kbehm29]

The difference is, though, that Sony (creater of Blu-ray) and Toshiba (creater of HD-DVD) have equal rights to try and push their products, which I'm sure they both have done within the law.

Microsoft has nothing to do with either format - they just want people to download so they're trying to sink both formats by pushing the perceived 'loser'.

[MadonnasManOne]

The difference is, though, that Sony (creater of Blu-ray) and Toshiba (creater of HD-DVD) have equal rights to try and push their products, which I'm sure they both have done within the law.

Microsoft has nothing to do with either format - they just want people to download so they're trying to sink both formats by pushing the perceived 'loser'.

This is completely untrue. They actually do have an interest in HD-DVD. Aside from their software interacting with it, they have a video game system you may have heard of, called the XBOX 360. They offer an HD-DVD add-on for the system.

Also, Microsoft's main rival in the video game wars is Sony. I'd say that they aren't pushing the "loser", as much as they have a great interest in HD-DVD. Granted, they do want people to just download to a hard drive, and not have to deal with physical media. However, I am quite sure that Microsoft is all for HD-DVD winning over Sony's Blu-Ray.

[kbehm29]

I don't really agree. Microsoft paying people off is not the same as Sony or Toshiba paying people off.

Microsoft could just as easily have built a Blu-ray add-on if that format wins. They are trying to sink the whole thing so they can have a monopoly on downloading movies for their X-Box, or next generation console in addition to PCs.

And I'm not the only one who believes this - try reading any of the editorials on comingsoon.net.

[MadonnasManOne]

I don't really agree. Microsoft paying people off is not the same as Sony or Toshiba paying people off.

Microsoft could just as easily have built a Blu-ray add-on if that format wins. They are trying to sink the whole thing so they can have a monopoly on downloading movies for their X-Box, or next generation console in addition to PCs.

And I'm not the only one who believes this - try reading any of the editorials on comingsoon.net.

Actually, Microsoft created the method of encoding for HD-DVD. They do have an interest, and a right to pay money to whomever they choose, in order to bring them to the HD-DVD camp.

Also, there is no way in hell Microsoft would make a Blu-Ray add-on for the XBOX 360. Why would they support their rival? Ain't going to happen.

[DarthPrime]

Yes Microsoft wants movie downloads, but that is a long ways off. Not everyone has a broadband connection, and most connections are not fast enough to download HD sized movies very fast.

Microsoft does have a hand in HD DVD, but I don't see how they are any different than Sony or Toshiba paying for studios. They are also creators of some of the "code" used in HD DVD, so I don't see why they would want it to just fail if they have time and money invested in the format.

[2099net]

The difference is, though, that Sony (creater of Blu-ray) and Toshiba (creater of HD-DVD) have equal rights to try and push their products, which I'm sure they both have done within the law.

Microsoft has nothing to do with either format - they just want people to download so they're trying to sink both formats by pushing the perceived 'loser'.

And after reading up a bit more I see that nowhere has it been reported that Microsoft has paid Paramount the money (apart from on fanboy's forum posts and blogs). All that is reported is that some money and incentives were paid. (And easily - and more likely - this could have been paid by Toshiba or the HD DVD promotions group - of which admittedly Microsoft is a member, but not exclusively so).

I also doubt the full $150m was offered in cash, more likely it was offered in services and co-promotion (just like Sony gave free Blu-Ray authoring services and subsidised production of BD50s)

$150m isn't that much really. The Sony alone is spending $100m on advertising for the second half of this year alone. So for 18 months, the bulk of the $150 could literally be just co-branded advertising and pack-ins.

Personally I expect come the new year, all HD DVD players will come bundled with Transformers - thus guarenteeing a number of "sales" for Paramount. HD DVD benefits from having Transformers on the box and adverts. Paramount/Dreamworks benefit from having Transformers adverts and also get revenue for each player/disc combo sold.

Nobody can point to sales of 2:1 and claim Paramount has shut the door on the most profitable format, because nobody knows what the costs were. If reports of BD50 production no longer being subsidised are true, then who knows the true costs of making and authoring a BD50 compared to a HDDVD 30?

And I'm also sick to death of this "download" nonsense and this is the death of high-def optional media. Has iTunes et al killed CDs? No. You can even still buy vynil. Have sales of CDs gone down? Yes. But also remember its many times more convenient to download and keep a small music track then a movie, even a standard definition movie. All downloads will do for the forseeable future is replace rentals. Bricks and morter DVD rental is slowly dying anyway to be replaced with on-line postal rental companies like Netflix.

Downloads for rental may result in less optical discs being pressed (all those rental chains buy discs) but people will still have an option to buy.

Microsoft don't even have a XBoxLive video marketplace presence outside the US. Do you not think that if Microsoft did spend that money, that they would be better off spending it to acquire rights for non-US territories? It's pretty hard to "want" people to download when they have nothing to download? In fact, I could think of a number of ways Microsoft could better spend their money if they simply wanted people to find downloading more "acceptable".

As it stands for Europe, being as Sony have announced a video download service for the European PS Store before the end of 2007, it looks like Sony will beat Microsoft in the digital download market.

[kbehm29]

I just don't want to have to buy both formats. It's not fair.

Also - it's not really the same to compare music downloads and movie downloads. Music downloads are more popular because music is more portable than movies.

I don't deny that one day we all will have everything digital and people will look back at our physical DVDs and laugh. I just don't want that day to come in this decade. I love my Blu-ray discs!

[Mr. Toad]

Microsoft has nothing to do with either format - they just want people to download so they're trying to sink both formats by pushing the perceived 'loser'.

Thats not true. Microsoft is a backer of HD-DVD. Maybe not to the extent of Toshiba but they still have.

I do agree with you 100% that Microsoft has ulterior motives and is trying to sink both formats so downloads win out. And that is not legal.

[Mr. Toad]

And after reading up a bit more I see that nowhere has it been reported that Microsoft has paid Paramount the money (apart from on fanboy's forum posts and blogs). .[/quote]

Both the Hollywood Reporter and The New York Times have reported $300 million was/will be paid by Microsoft to Paramount and Dreamworks. The New York Times reported it was $150 million each and the Hollywood Reporter said $200 million to one and $100 million to the other.

[DarthPrime]

There probably was a payout, but we will probably never know how much or if it is 100% true they received one.

One interesting rumor I read a few mins ago is that Warner Bros has gotten a offer to go HD DVD exclusive (225 million). I know they were once HD DVD exclusive before the formats were released and then switched to neutral, so it wouldn't be a big surprise to see them go exclusive. However it would completely kill their TotalHD discs they are trying to work on. This would really hurt Blu-ray as well. Sony, Fox, Disney, Lionsgate vs. Universal, Warner Bros, Paramount, Dreamworks, Weinstein... This could get interesting fast.

Has anyone heard anything about this? I'm sure its as much of a rumor as the countless Disney goes neutral, or Universal goes neutral rumors we have heard for over a year. Although after this week anything can happen.

[Mr. Toad]

I also doubt the full $150m was offered in cash, more likely it was offered in services and co-promotion (just like Sony gave free Blu-Ray authoring services and subsidised production of BD50s).

True but cash was paid and it was significant.



$150m isn't that much really. The Sony alone is spending $100m on advertising for the second half of this year alone. So for 18 months, the bulk of the $150 could literally be just co-branded advertising and pack-ins.

And I'm also sick to death of this "download" nonsense and this is the death of high-def optional media. Has iTunes et al killed CDs? No. You can even still buy vynil. Have sales of CDs gone down? Yes. But also remember its many times more convenient to download and keep a small music track then a movie, even a standard definition movie. All downloads will do for the forseeable future is replace rentals. Bricks and morter DVD rental is slowly dying anyway to be replaced with on-line postal rental companies like Netflix.).

Downloads have significantly hurt CDs. Granted there are other reasons like tone-def A&R men and DVDs themselves that have contributed significantly to the decline.

That is also worrysome. Maybe nobody wants the hard medias to survive.
As it stands for Europe, being as Sony have announced a video download service for the European PS Store before the end of 2007, it looks like Sony will beat Microsoft in the digital download market

[Mr. Toad]

. I think, ultimately, money will win over any "artistic" integrity.

Also Mr Toad are you sure it was Microsoft who paid Paramount?

Not without doing a forensic audit myself. However I doubt Microsoft or Paramount would really agree to do that. The New York Times did(at least according to digitalbits). I am too cheap and or lazy to confirm.

[2099net]

As far as I know, and there's been lots of links to the two articles you mentioned on various forums and blogs, neither paper reported that Microsoft had paid Paramount. In fact, nobody was mentioned as paying the money, and Microsoft has flat out denied it. It also says "incentives" as well as cash (and the cash could be just to pay for the right to use the Shreck image to promote the format for example - trademarks aren't given out for free normally). Really, what's been reported is most likely no different from what the BDA has done for Blu-Ray - we know that they too have offered "incentives" - from paying stores to promote product, to subsidising production to (probably) putting money towards Disney's Blu-Ray promotional tour.

And again, I say, if the deal is for 18 months, $150m could easily go just on co-branded promotions over the year and a half and nothing else. (Although I expect Microsoft to offer free/reduced VC-1 encoding for example)

But money talks: 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 as such.

The incentives will come in a combination of cash and promotional guarantees. Toshiba, for instance, will use the release of “Shrek the Third” as part of an HD DVD marketing campaign.

Paramount and DreamWorks Animation declined to comment. Microsoft, the most prominent technology company supporting HD DVDs, said it could not rule out payment but said it wrote no checks. “We provided no financial incentives to Paramount or DreamWorks whatsoever,” said Amir Majidimehr, the head of Microsoft’s consumer media technology group.

Also - it's not really the same to compare music downloads and movie downloads. Music downloads are more popular because music is more portable than movies.

I don't deny that one day we all will have everything digital and people will look back at our physical DVDs and laugh. I just don't want that day to come in this decade. I love my Blu-ray discs!

But that's exactly my point. It's easier to have music downloads than movie downloads for many reasons - equipment, download size, off-line strorage... and yet most people still buy CDs. Admittedly people like me buy the CD and MP3 it and then hardly play the CD again, but people on the whole prefer to buy CDs.

So what makes people think movie downloads are going to suddenly take-over? For a start there isn't even the inferstructure to do so. From what I've read on other forums, most US providers are capping monthly download bandwidth. A 1GB movie here and another one there and pretty soon your monthly limit's exceeded.

Secondly, Microsoft has the technology NOW, but is hardly making best use of it. Like I say, the XBox Live Video Marketplace isn't even available outside the US, not even in Canada! If they want to make downloads more acceptable, Microsoft would be better off investing in getting more product available worldwide, or even spending the same amount of money giving new Xbox Live subscribers in the US 5 free movie downloads.

I just can't see any business sense in paying for HD DVD to continue to survive if all they want is future downloads, when there's literally hundreds of things that they can spend the money on that will help them with their "agenda" now! Because every day Microsoft does nothing, other companies, including Sony, expand or get closer to their movie/video download system.

I just don't want to have to buy both formats. It's not fair.

I'm sorry, but it is fair. It's the price people pay for being an early adoptor. Early adoptors always pay more money or pay money for formats/equipment that doesn't catch on or isn't as good.

Do you think its fair everyone who has bought a stand-alone Blu-Ray player will have to buy another to take advantage of the new BD-Java features which will be introduced after October 31st this year? Or even that they paid $1000 for one, when they can be picked up for less than half that now?

When you bought your PS3, you knew HD DVD was a competing format. You knew this could happen.

I think this news will mean that this time next year, combo players will be much more available and much lower priced. Before I could see HD DVD losing. Now I see neither side "winning" as such (but Blu-Ray will still have the biggest market share) the combo players being the only "winners". It's probably best for everyone if this is the solution - all companies get their licence fees, nobody will have to throw out any of their discs and there will be no confusion in the marketplace.

[DarthPrime]

Another thing the two formats have done is bring the prices down a lot faster. If it was just HD DVD, or just Blu-ray I highly doubt the players would have dropped in price as fast as they have. Discs actually might be more as well.

[2099net]

Another thing the two formats have done is bring the prices down a lot faster. If it was just HD DVD, or just Blu-ray I highly doubt the players would have dropped in price as fast as they have. Discs actually might be more as well.

I don't think Sony can charge a MRP of $50 (less instore of course) for Spider-Man 3 now, not if its going against Transformers on the other system. Expect the price to drop to $39.99 (less instore of course) before it's released.

Edited to add: I see according to Amazon it has gone down already - to the rather odd $43.95 MRP

[2099net]

OK, here's a post on the AVS forums from a (verified) Microsoft Insider. (the $225m he refers to is rumours that that was offered to Warner Bros to go HD DVD exclusive at the same time as money/incentives were offered to Paramount).

Microsoft Insider: See, now I know you're lying. Microsoft offered no deal to Paramount. See, our team has this little thing called a budget, and it's a lot lower than $150 or $225 million. We're also part of the same division XBox is in, which has told investors it will be profitable this year. That would be difficult if we were spending, what, 375 million dollars according to you on studios that are already releasing on our format. With that kind of money we could have bought MGM, so why would we do this instead? Geez, some people will believe anything about Microsoft, but you have to realize that first and foremost, it's a business, and these deals would not make business sense for Microsoft

Another insider (Amir - who keep in mind does work for Microsoft) wrote this

I suspect if significant dollars were provided, they are to promote the titles, defray the high cost of production of the titles including the creative aspect of interactivity (a high value title will cost $500K or more to encode with innovative interactivity). All of this is a good thing for the format and perfectly normal given what the other camp is doing. While Talk won't talk about the deals between BD companies and studios, you don't have to be a rocket scientist to glean that there was a reason Sony was doing all the encoding and production of titles for BD format. And how a simply port of the VC-1 streams from HD DVD was not done to BD as Warner did….

[darth_deetoo]

I really don't care either way now that I've bought into both formats. Hopefully it will see studio's competing even harder to make their chosen format a success which will lead to more titles being available on both formats.