PIttsburgh Post-Gazette columnist Don Lindich reports a dirty bit about Warner's defection to Blu-ray that we had uncovered in our own reporting of the format war at CES, and which we had confirmed through a different source (except for the payouts), though were holding close to our chest while we worked some other angles. Warner actually wanted to go HD DVD. They gave Toshiba the chance to bring another studio into the HD DVD camp before they turned Blu. Fox was lined up, and told the HD DVD camp it was going to switch to HD DVD, which would've also turned Warner exclusively HD DVD. At the last possible minute, it nixed the deal.
Lindich says it's because Fox received a reported $120 million payout from Sony to stay Blu-ray—Warner then switched and received between $400 and $500 million for its defection. BW says it's closer to $400 million. In our phone call with Warner Kevin Tsujihara said it wasn't a bidding war that brought them over—that's true, in the words of Ben Kenobi, from a certain point of view. [Post-Gazette]









Comments
"Warner actually wanted to go HD DVD. They gave Toshiba the chance to bring a studio into the HD DVD camp before it defected, and Fox had told the HD DVD camp it was going to switch, which would've turned Warner exclusively HD DVD. At the last possible minute, it nixed the deal."
Can you rephrase? I didn't understand a word that was coming out of your mouth!
"Why make billions, when we can make........millions?"
Wow... no wonder the folks at Toshiba looked like they got hit by a train at CES... they had almost won the format war!
Format Wars...
That certainly is a spicy meatball and puts this whole ordeal in a different light.
@ NOOBS-R-US:
Well said. I have no idea what that paragraph means. Rephrase please!
money talks
@Noobs-R-Us:
Basically, Warner said to HD-DVD, "If anyone else goes HD-DVD, we'll follow", because Warner just wants the format war to end. Turns out FOX was about to make the jump to HD-DVD, so Warner would follow wherever FOX went, but Blu-Ray paid FOX to stay.
As far as I'm concerned...
...the Pirate Bay has won my "format war".
...or at least upscaling DVD if I decide to not break the law.
@NOOBS-R-US@Noobs-R-Us:
Try this:
"Warner actually wanted to go HD DVD and gave Toshiba the chance to bring another studio into the HD DVD campso that they wouldn't defect. Fox had told the HD DVD camp it was going to switch to HD DVD, which would've turned Warner exclusively HD DVD as well. At the last possible minute, Fox nixed the deal."
@Noobs-R-Us:
yea seariously, i must be retarded or something because i dont understand anything in those paragraphs.
Evil Sony...shame on you for using the HD camps' tactics. When all else fells...give em money. I love BR.
So that's a $150 Million payout to Fox and a $400 to $500 Million payout to Warner courtesy of Sony. Any everyone was so upset when HD-DVD made a similar move months ago.
...Glad the consumer decided on who won this format war by selecting the better product.
/sarcasm
@Dreamwriter: He still wont understand. You are gonna have to use pictures.
Naa if Warner had gone HD DVD along with Fox it'd still have eben a while before the war was over but at least it would have been a fight :S
Why does everyone get mad at MS or Sony for offering the money? Ultimately, it's Paramount, Fox and Warner's decision to take it or not.
I find the lack of hi-def format chicks in a catfight disturbing. Cruddy Blue WB logo. DO NOT WANT
I just want to know if Gizmodo will even be allowed BACK at CES next year...
bull freaking shit, there were no payouts made to anyone, fox never wanted to go hd-dvd they were loyal to blu-ray. what would be the point of switching to hd-dvd since bd discs out sold hd-dvd discs 2:1 in america. in other contries especially autrailia, hd-dvd was practically dead
"With no studio joining them on the HD DVD side, Warner's hand was forced and it went with Blu-ray, receiving a reported $500 million for doing so."
Surely if the format war was hurting them and they wanted to end it quickly they would have gone straight to Blu-Ray after Fox was "paid off"
I for one do not believe this story.
@matizzy: Wow, so you have a better understanding of what's going on then both Don Lindich of the Pittsburgh Post-Gazette and the editors of Gizmodo. You should open up a blog or something, because it sounds like your a very well informed individual.
Sounds pretty shady. Id be suprised if this little Quid Pro Quo could end up in litigation, now class lets all say it together, 'Anti-tust'.
Would it be as easy as Toshiba giving Warner say, $600 million to change their minds? And maybe $200 million to Fox and a few other companies? I mean, I'm reading that Toshiba made $63 billion last year (Sony made $76 billion) and combined with a bit of help from Microsoft, this would be chump change to them. Microsoft was able to top Sony in console sales by investing tons more money, why not Toshiba?
Boy I'm sure glad I got my HD-DVD for my Xbox a month ago. I thought I was on the losing end of the deal..... hey.... wait a minute.
Cause Toshiba wants to let the consumer decided which is the better format, and not try to buy it like Sony. Did you read the article Matizzy? Fox was tired of the lack of production support with BR. Hence the limited releases from Fox. Money talks and Sony is trying to talk for us.
@Ajay:
"With no studio joining them on the HD DVD side, Warner's hand was forced and it went with Blu-ray, receiving a reported $500 million for doing so."
Surely if the format war was hurting them and they wanted to end it quickly they would have gone straight to Blu-Ray after Fox was "paid off"
Umm... did you even read the article? That's EXACTLY what they did.
"Warner actually wanted to go HD DVD. They gave Toshiba the chance to bring a studio into the HD DVD camp before it defected, and Fox had told the HD DVD camp it was going to switch, which would've turned Warner exclusively HD DVD. At the last possible minute, it nixed the deal."
Jesus....someone needs to take Grammar 101 again.
So in other words, this is why Blu-ray is $24.99 - $34.99. They keep paying off the studios with very large amounts of money. They will have to make the money back somehow!!
@pushmonk: I meant that surely they would hav gone to Blu-Ray without the pay off if the war was huting their DVD sales
@newgalactic: its called looking at statistics, hd-dvd was out sold 2:1 in the US, while in most other countries it was practically dead. it just wouldnt make sence switching to something that was being outsold
What baffles me is the fact that an inferior ~and~ more expensive product is winning at all.
This is exactly what I was expecting to hear when I first read the Warner Bros deal. It's all about the back office deals that wins, not technology, not consumers, not the better company.
Insiders thread on AVS Form mentions that 1) Fox never considered leaving for HD-DVD, and 2) there was no pay-off for Warner.
How does it make any sense that either Fox or Warner make a move to HD-DVD given the market conditions? With Blu-Ray having a solid 2:1 sales ratio for practically all of 2007 in the US, and a even more dominating 75% and 90% in Europe and Japan respectively, why would Fox move to HD-DVD? I guess they would consider moving to HD-DVD if a particularly large reward was dangled in their face, because the sales numbers certainly doesn't explain the logic behind such a move.
Given that, these rumors and assertions are counter to what is logical. If HD-DVD had been on top of Blu-Ray, then I'd buy it, but not when Blu-Ray is consistently in a dominating position over HD-DVD in all major markets by a large margin.
@cheesemon:
because toshiba doesnt have as much money backing them as sony does?
I'm glad Blu-ray is "winning" because I have a PS3. However, I'm sad that HD-DVD is "losing" because I think it is the superior format. HD-DVD is superior in cost and features. The only thing Blu-Ray has going for it is theoretical capacity.
Fox was contemplating moving because of the lack of BR replicating facilities. That's why there is a lack of Fox movies. They probably got fed up with the empty promises. BR was having BOGO sales every week to keep those numbers skewed. On avg, 150,000 copies of BR and HD DVD are sold compared to 20 million by DVD. 2:1 is nothing in sales when compared to the 20 million. Supposedly there are 5 million PS3 out there, that tells you how little people are using their BR player when 100,000 movies a week are sold to BR.
@ViewtifulJason:
failing to see something explains a lot when you refer to the BR format as inferior. I bet good ol' toshiba is losing money because of the constant price drops to salvage whats left. Even though there was the claim that it was cheaper to produce when the consumer didnt see that until recently. On top of the fact that their regular DVD players were trash that didnt give me or anyone whos owned one high hopes for their HD dvd players.
Oh! I see! Thanks guys for explaining it to me.
Matt Buchanan try this:
Warner actually wanted to switch to HD DVD. However, it was contingent on Toshiba brining another studio to HD DVD before Warner made the commitment. Alas, Fox signaled a willingness to also switch; however, they changed their minds at the last possible moment thus ending Warner's bid to become HD DVD exclusive.
@ViewtifulJason: VHS
HDDVD would have had a big chance if MS would have added HDDVD to its Xbox 360. Without it (and with the addition of a BlueRay disk to the PS3...) sorry, but the damn format was doomed. Toshiba might be in the last throws now, but I can't see how they will be able to come back from this hit.
@ViewtifulJason: Betamax v. VHS.
Look it up.
Predictable.
I mean, format wars has always been about that.
HD-DVD also did similar moves. Blu-ray started by pushing blu-ray player with PS3. HD-DVD payed big bucks for some studios. Why wouldn't Blu-ray do the same thing?
Eventually, the one that'll win is the one with more cash to spend on this.
But like I said before, if HD-DVD ends up with no studios, but still releases a cheap ass recorder plus media, I'm still buying it.
I couldn't care less for movies in HDef.
I could care less who wins. The Internet won the formatwar for me. I can get 1080p/24 awesomeness for nothing on the 'tubes. That is why God created FiOS, to delvier the 1080p/24 awesomeness and to punish the evil format war fighting infidels.
And finally, per complaints of those against cruddy blue filter over WB logo, someone makes a Spartan variant. If you ask me, you should've taken the green monochrome Warner Bros. symbol shown in the intro of the Matrix and make it blue. Sickness.
This store is BullShit with a capital BS.
@ViewtifulJason: @ackthbbft: Why does everyone always think that HD-DVD costs less? It may cost slightly less to produce but as a consumer we still pay the same price for a movie whether it be Blu-ray or HD-DVD and in terms of cost per gigabyte, Blu-ray dominates.
@gamershq: Blu-rays from Netflix cost the same as DVDs :)
Yeah, sorry that BD is going to win, I think HD DVD is superior also. It has more features, is cheaper all-around, blu-ray keeps adding standards, etc...
@newgalactic:
"@matizzy: Wow, so you have a better understanding of what's going on then both Don Lindich of the Pittsburgh Post-Gazette and the editors of Gizmodo. You should open up a blog or something, because it sounds like your a very well informed individual."
The funny thing is, according to REAL insiders in AVS forum, what matizzy said was true. But then again, maybe Don Lindich (who doesn't have anything to do with companies that support either format btw, AND is an HD-DVD fanboy) knows more than the "undisputed" AVS insiders.
I'll never understand why people seem to think HDDVD is cheaper. Players yes, but the movies are consitently the exact same price or 5 dollars more, in EVERY store around me.
And Blu-ray is inferior? Why then, when Paramount was format neutral, did they release higher quality audio encodes on all the Blu-ray versions? Heck, take a look at the reviews for Transformers. Any reviewer out there gave the audio 5 stars, yet said it could have been better, if it used the audio solutions Paramount used to put on their Blu-ray discs.
I really just dont get where people come from on this...
@ViewtifulJason: I know you're just trying to start something, but the only reason HD-DVD is cheaper at this point is because stores are clearing them out.
@ab3: That's because most Americans are sheep, they will parrot anything that others say with