Gizmodo
Most people have already declared Blu-ray to be the format war's victor—even us, begrudgingly—and our recent talks with Toshiba and Universal seem to suggest that the HD DVD camp might be ready to pull up stakes. Back at CES, so many moons ago, Microsoft said HD DVD was over when Toshiba said it was. Ken Graffeo, Universal's Executive VP and Co-President of HD DVD promo group, told us the exact same thing: "If Toshiba says it's over, it is over." Our impression? Toshiba knows it's over. The crazy part is this: Just a few weeks ago, it might've gone the other way entirely.
When we talked to Jodi Sally, Toshiba's VP of Digital AV Marketing, she said, "We still feel there's some value in HD DVD, but we're watching the market closely, waiting to see how sales go." Saying there's "still some value" in something is clutching at a reason not to throw it out, like your old bowling ball you haven't rolled in three years, or your dusty Laserdisc collection.
Consequently, we have a pretty good grip on where HD DVD and Universal stand. We think that rumors Universal's contract had expired and they're getting ready to jump are false for a couple of reasons, and not just because Graffeo told us: "Nobody talked to us. Everything that you see out there has never been substantiated."
We've heard on background from several insiders that Universal's contract with HD DVD runs through 2009, and that the contract is null only when the format is declared non-viable. Graffeo repeatedly placing the onus on Toshiba to declare HD DVD dead seems to confirm this. In addition to the above quote, we specifically asked him how HD DVD would react to Paramount jumping ship, and he responded "That's something you would have to ask Toshiba." In other words, everyone is basically waiting for the other shoe (or studio) to drop.
But several weeks ago, before Warner defected, things could have turned out quite different. One reliable source confirmed to us a few days before the Warner/Blu-ray deal went down, a Fox executive called Robbie Bach (Microsoft's head entertainment exec) confirming they were going exclusive to HD DVD, not Blu-ray. And if Fox went, the deal was that Warner would go, according to the same source. At the last minute, Fox decided to stick with Blu, effectively taking Warner with it. Toshiba's total surprise at the Warner shift corroborates that it was an 11th-hour move. Graffeo also confirmed that a bunch of HD DVD execs were on the plane to Vegas when the news dropped, so they had no idea.
So what happened? Don Lindich at the PIttsburgh Post-Gazette says Fox was handed $120 million by Sony to stay put, and Warner received around $500 million for painting itself Blu. BusinessWeek put the Warner number "closer to $400 million," which trumped the $100 million Toshiba was prepared to offer it. In our phone call with him, Warner's Kevin Tsujihara denied that a bidding war was a factor. While we believe money was on the table, we do believe that what Tsujihara is, strictly speaking, true.
Every studio wants the war to end—it's dragging down HD disc and regular DVD sales as people don't wanna buy Betamax 2 or get double-dipped with an HD version in a couple years. Warner Home Video is the biggest player in the video market, with a 19.7 percent market share, so it also had the most to lose with a drawn-out war slowly sapping away profits from both its foundation (DVD) and future platform (HD). Its market clout (plus Fox's follow-me plan) made it the Sandra Day O'Connor of the format war, allowing it tip the scales in favor of whichever side it landed on.
Let's talk about the timing. Another source told us that Warner had actually planned to make its announcement at CES. Making it just before CES effectively cut Toshiba and HD DVD off at the knees, and according to that source, led our man Billy G to chop out a 20-minute (?) portion of his keynote dedicated to HD DVD, in which Microsoft would declare a full-steam-ahead push.
The end result of the early announcement was the effective elimination of HD DVD from the show. Literally, the HD DVD camp canceled its own press event. The biggest beneficiary from the revised timeline was obviously the Blu-ray camp. The nagging detail here is that Warner's incentive to let the cat out of the bag early is seemingly only indirect—what did it directly gain from sucker punching Toshiba versus a slightly later announcement? Or would it have been more humiliating for Toshiba and the camp if Warner had smiled and hugged everybody through the show and then performed its judo chop?
The question of payouts is trickier. Why? Insiders tell us that the purported amounts—in the hundreds of millions, varying by camp and studio—are pittances in what is multi-billion-dollar game. It makes little sense to those in the know (on both sides) that the studios would be swayed to either side of the river by a drop in the bucket, or even a bucketful of money. (There is an exception or two, studios known for penny-pinching and an eagerness to jump at just a sliver of a profit.) More likely the payouts constituted good will or in some cases, just free money, as the commitment itself wasn't as hard as the coin.
We think the real power play, if there was one, came from within Sony, but it's hard to get to the bottom of it, given the number of Blu-ray proponents—i.e. mum cronies—in the CE business.
Where we officially are: The ball is in Toshiba's court, and Universal, Paramount and DreamWorks Animation are sticking with Toshiba until it calls it quits, which it may do if the market" for its players turns sour—according to Toshiba, the most recent price cuts may well lead to a sales bump before any kind of bitter end.
Where we actually are: Blu-ray execs are 100 percent confident they have won—publicly and privately in our conversations with them; dual-format swinger Samsung thinks HD DVD's back was broken on the Hollywood front and will be relegated to personally recorded content; an IDC analyst told us Toshiba may fall back on dual-format players, like Samsung and LG. It could have gone either way just a few weeks ago, but now it really is over for HD DVD.
Studios, execs and insiders: Wanna cut through the cloak-and-dagger BS and set the things straight for us and all consumers? Tell us the score, straight up, on the record.
–Additional reporting by Mark Wilson
Comments
A BATTLE THAT ARE THESE PRESENTANDO FORMATS. LEVE ADVANTAGE WITH A SHORT TERM FOR THE BLUE RAY
Wow... thanks for that enlightening commentary! I was thinking the EXACT same thing.
@rubu: I think babelfish just imploded.
My brain hurts. I'm so tired of this format war. Just end it. I was marginally in the HD-DVD camp, but like most other consumers, I refused to spend a dime until one format prevailed. In fact, geniuses, I've even curtailed regular DVD purchases feeling like I was just tossing money into a dead format.
So for the love of God, Toshiba, end this farce, let Blu-Ray win, and everyone get to the business of dropping the top end player price below $300 and releasing Blu Ray burners for my PC.
I hate format wars.
With all the money being paid out to the studios, the hardware manufacturers, this will most likely result in a higher price to the consumer. The money will have to come from somewhere.
@RUBU - Huh?
I still think for BR to really win...they need to make 2.0 standard and start putting out 2.0 movies. I think the true reason more studios are backing BR is good ole reliable DRM...only time will tell.
@AmishJohn:
lulz. All your base are belong to Sony?
While BR is currently winning by a signficant amount, if Toshiba could convince the studios to only release HD DVDs with DTS MA and 1080p - I think the public might say - gee HD DVD is MUCH better. I don't think the public's reluctance to move to a new format is just about the format war - it is the content. So many movies on both are basically not significantly better transfers than the standard DVD copy. Yeah many of us (myself included) made the mistake of double dipping for the DTS version of a movie.
Not again. I'm not buying another fu
You can slap paint on a canvas but that doesn't make it art. You can whip out a shoddy transfer on HDDVD or BR DVD and it doesn't make it a better copy than standard DVD.
Want to see the new formats take off? Try actually making all the transfers top quality the first time. You can still produce standard DVDs for those who dont' want the best quality possible and want to save 2 bucks but if you want HT enthusiasts to make the jump, give us a GOOD reason. DTS MA is here, 1080p is here - wasn't that the point of the new formats? Why buy the new formats if they aren't better than standard DVD?
i'm so glad i bought invested in a playstation 3. yay blu!
PS - I'm not saying I want either format to win - frankly - I hope they both suffer marketing and financial losses until the studios stop doing crap transfers. When the studios stop trying to take advantage of us and try to get us to double dip - then for all I care both formats win - but until then, I hope the studios take a bath on movie releases.
Death throws can be very slow...
Bit of a shame really, but at least it's all over now.
So, is that whole payola-to-support-my-format thing indicative of how the entertainment industry as a whole is run? (Yeah, I know it's unsubstantiated, but something smells a little off...)
Like I said in the other HD DVD is dead article, having one format is good, regardless of quality (well, not totally regardless, but you get me, right?) because then everyone can put their weight into improvement and content. For god sake, I just want HD movies with good features at a sub-$300 price. HD DVD had them, and they lost. Now I hope that profile 2.0 comes along fast to finish the job.
While I do own a Playstation 3, a TV with HDMI, home theater system....all that great jazz, I still only own 2 blu-ray movies. And one came with the system.
The format war ended years ago. DVD is the winner.
Pretty long post. I read 70%, and then I was bored.
Here's hoping Universal, Paramount and DreamWorks Animation get together and pay Toshiba to give up. Those studios know that Blue-Ray has won, which means their HD DVD titles sold this year will feel the pain at the sales register. It must be worth something to them to get out of that contract sooner rather than later.
lets all just thank god toshiba couldn't drag us into using the inferior format.. seriously.. we as consumers should be happy, the better format has won, and once it's officially over, we can start reaping the benefits.
@boe
I'm all for HD-DVD over Blu-Ray, but I don't understand why you are pushing DTS-MA. Both DTS-MA and Dolby TrueHD are lossless formats, and TrueHD is superior to DTS-MA for a whole host of reasons. The only real "advantage" that DTS-MA has for anyone with a high-end system is that the PS3 can't decode it. Absent the format war, this "advantage" would really be a problem.
Glad I got my VuDu, no reason to worry about any of this stuff..
I think it's a shame that the game ended that way (I think Sony deserved a slap and a lesson but obviously this is not when it will happen), but it's over. Time to stop, Toshiba. It's dead, let it go.
Did this piece bring anything new to the table? I read stuff I read weeks ago...
Until Bluray players hit $100 mark, I will stick with HD-DVD. And I do not care of PS3 fanbois opinion.
Also, my prediction: in 2-3 years, when HD userbase hits like 10-15% (the rest will still use DVDs), Blu-Ray will be dead. And its supporters - PS3 kids will be a part of the past.
Cable on demand delivery and movie downloads will replace physical media for early adopters of technology. The el-cheapo guys will still use DVDs.
What is going to happen with HD-DVD? May become the computer media format if cheap HD-DVD writers get to the market. And at that time evil Sony format will be in the dust.
HD-DVD had one version, Blu Ray can't even get its ass into gear and get to profile 2.0, sort of stuck half way between 1.0 and 1.1 at the moment, when are Sony going to announce a final version or will they announce profile 2.1 at some point?
A couple of the insiders on AVS have stated that there's no way Fox was going to go HD-DVD because of security concerns. They didn't start their Blu-Ray push until BD+ had launched and had no interest in HD-DVD since AACS had already been compromised.
The 9-figure payouts certainly make a better story though.
@OldPunk: If what you says happen, I hope gizmodo folks will point out that you called it first.
You know, that's one thing that been trotting in my head for a while... Isn't this war a bit pointless? I thought we were starting to move away from shiny discs and becoming more download oriented.
i mean really!!! some people must have eagle's eyes cuz last time i checked human eyes can't really differentiate past 1 million dots (or whatever the number was) past a few feet. so what the hell if its blu-ray over hd?
who cares... unless you bought toshiba stock.
they lost - now can everybody move on? stop beating a dead horse... i mean, come on!!!
"Until Bluray players hit $100 mark, I will stick with HD-DVD."
You have an HT set up good enough to get value from a HiDef Media format, but you're squealing about spending $300?
No offense meant, but perhaps you should have fully funded your retirement plan before jumping into HD HT.
@A Lawyer: OK - I'm all for Dolby best format as well - I guess my point was lost on you - the studios are releasing crap transfers so they can re release them with an "ultimate" edition and try go get us to double dip.
We fell for that trick once - not a lot of people I know are going to fall for it on the new media. The new formats would sell better IMHO if they actually released the "ultimate" DTS MA/Dolby TrueHD - 1080p versions and skipped the - we copied our standard DVD transfer to the new media and slapped in an interview with the Gaffer and want to charge you twice as much edition.
What is a shame is when people give conclusions and make predictions and their posts are riddled with bias and blatantly meaningless words. It is one thing to state a preference. It is another to use words like "evil Sony", "HD-DUD", and other words and phrases. If you want intelligent people to listen, stay away from that junk.
@savager: well thank you for that enlightened and balanced comment.
I don't care which format wins, like other people I shan't be wasting any money 'til it's good and settled and cheap. But in the back of my mind, I'm uneasy that Sony's lot have won - their tracks record isn't great when it comes to doing things that are in the customer's best interest...
Very nice read by the way.
@rubu: o babelfish não traduziu uma parte das palavras? Não te preocupes, cara, ninguem é perfeito. Tão pouco o meu portugues é perfeito, o mais importante é que seguirmos tentando;-) Mas melhor sem Babelfish;-)
oK, everybody else: welcome to language-KZ...(or CC, if you so wish)
What amazes me is that this is essentially all based in the quality of the medium, which, as proven time and again, is not something the studios really care about. These are studios that have thrown shoddy transfers, full-frame films and barebone DVDs at us, and now, suddenly, they are going to care about making everything look good and be loaded with extras? It's going to be a second-round of subpar quality and barebones crap, once again charging us $30 a disc.
Before this thread turns completely to shit (like all the other threads on the BR/HD debacle), I want to compliment Matt and Mark on an excellent post.
Work like this is why I read Gizmodo every day.
Also, would anyone like to buy a lovely Toshiba brick with a matching set of novelty coasters?
Toshiba's HD-A3 is going for $128 with 7 free movies and free shipping on Amazon today. Not a great deal if you are vesting in one format over another. But as a replacement "upconvert" DVD player, this was the deal I was looking for.
My standard DVD player died this weekend, and when I compared the 7 free movies and upconvert to standard 100-dollar upconvert players, this was a no-brainer. And if that means I have to buy a Blu-Ray player in 2 years when it dominates and the prices drop below $150... so be it.
But it's HD-DVD for me, for the time being.
W/e. I'm voting for nader. Blu and HDDVBDVD both lose. DVD loses too. I think I have a VCR around here still.
Toshiba HD-DVD players are going for $128 on Amazon right now. Free shipping. 7 Free Flicks.
Hmmm....
And Sony said that they don't pay for exclusives. Yeah right.
Anyway, I couldn't care less about who wins out in the format war but, what I don't understand is, why there is a war at all. What about DVD- and DVD+? DVD±RW? DVD±DL? Why the bloody hell do we have to decide NOW, while for the last years, we have been witnessing the peaceful coexistence of dual formats and no-one ever seemed to have wasted any thought on that.
I just like the idea that, what I have on my 60 or 80 DVDs right now will fit on maybe 20 HD-DVDs in the future. But, what about those holographic discs? And cards? Weren't they supposed to be ready by now? Or will the big players just keep them down a couple more years until they have reaped their profits from the current formats?
I was hoping for a Toshiba victory over Sony. Now that BR looks like it will become the new format standard, looks like everyone will be sitting around waiting for them to get a completed spec finished (wonder how long that will take). All the while, we could've been using a completed standard in HD-DVD.
But I have no love for Sony: proprietary formats, grudging (and late) acceptance of standard technologies, rootkits... Looks like I'll just skip the physical media for my HD needs and go straight to downloads. AppleTV, here I come.
Downloadable movies will not be a threat to movies on removable media (like discs) until broadband can provide a movie download experience that works.
If you think the current download technologies like Apple, Netscape, etc qualify as 'works' you must have an SD television. HD downloads aren't actually "HD". They aren't even as high a quality as plain old DVD. Blue-ray is capable of more content and higher quality video than HD-DVD and leaps and bounds higher than plain old DVD and not even in the same universe as downloading. There's a great comparison chart on this over at ZDnet.com. Have a look.
Removable media for movies isn't dead until you can actually download a real HD-quality movie in less than an hour. And if AT&T has their way, you'll pay a dear penny to do it.
@xibis: You hate low prices? Without a format war I hope you don't think Amazon would be able to run buy one get one free Blu-ray promotions or sell good movies like Terminator 2 for $14 new on Blu-ray.
If you didn't jump in to the format war yet, good for you I guess. Most of us with HD-DVD players spent $150 on them or so and the discs still play fine. I've switched over to only buying Blu-ray discs from now on, but it's not a big deal.
@boe: If Toshiba could convince studios of anything, at this point they might try to convince those studios to release any HD-DVDs at all. I preferred HD-DVD too, but the writing is on the wall.
Umm, so you're saying that Sony's finally won a format war? Does this mean that all is forgiven for Beta, UMD & MemoryStick?
Don Lindich at the PIttsburgh Post-Gazette - very realiable. LOL@GIZ
Only a fanboy would.
blu-ray should've been the one that lost... I don't care about the payoff, Sony had the right to do it just as much as HD-DVD did when they payed Paramount. What us stupid about all of this is that the majority of studios have picked the worse format. The players don't all have networking like on HD-DVD, so they can't all be updated to the latest spec. HD-DVD has more features, higher quality, and web content. It's more organized (they all can get the new spec), it's much much cheaper, and it's the better format for the consumer and the studios. The only thing Blu-ray has backing it is the 50GB of capacity, (which HD-DVD already beat with the 51GB triple-layer disc), and isn't really needed for movies. I still hope Blu-Ray loses, I think there is still a chance that HD-DVD can get back up and end this war in favor of itself. If that does happen, people are going to feel even more like they got hit by a train than the HD-DVD camp when Warner went Blu-ray, because this time the format war will end in HD's favor, even though so many people were sure it would lose.
@bryaaaant: The reason we blogged the piece by Lindich in the first place is that our reliable sources on the inside of this mess were telling us the exact same thing. Lindich beat us to it, and deserves props. No telling how many other journalists were sitting on the same info and not publishing. Trust us, it's decent intel, even if you hate Pittsburgh.
HD-DVD failed because Blu-Ray has fewer syllables. Five syllables to say HD-DVD and only 2 for Blu-Ray. HD-DVD isn't fun to say like "Blu-Ray"... I mean it's a RAY and its BLUE... that's cool. That's why HD-DVD failed.
It's funny that the only instance gizmodo's mouth strays away from Apple's penile area is when it comes to this format war. They should be supporting Blu-Ray4life like their sugar daddies.
So close. The sad thing is that it was the choice that dooms HDM to be another laserdisc rather than the successor to DVD.
It is fairly clear that blu-ray still has a year to go before it's stable, and that final-version player prices won't start to come down to the magic $200 point for at least a year after that. Call it 2010 or 2011 before they even have a shot at the mass market buyer.
HD DVD was there 6 months ago.
So, had Fox and Warner gone Red, killing blu-ray, we'd be talking about "the year of Hi-def players" in 2008. Now, it's more of the same for several years, while MS and the rest figure out how to do download with the same ease they've finally done for audio. Bet you they get there first.
So, Rah, rah, blu-ray. You've won the war, but not the battle. Short-sighted suits.
@kcmurphy88: Orly you bet they get there first? Bitter much?
Good luck getting people to download actual high definition programming, not the faux-hd that they're trying to pass off. It's like if you ordered a dvd a couple years ago and you got a vhs instead.
It would be fantastic to hear the inside story on all these this. For example what did HD DVD have planned for CES? I expect this war would make an interesting book when some of the details will leak out.
For about a day after Blu-Ray clinched it I wasn't too worried about it; even though I own an HD DVD player I figured it would still a good upconverter and I could get a dual-format player once those prices dropped.
But then Sony started announcing that we should only buy PS3s if we want a Blu-Ray player. This is bullshit. They have designed their strategy to force their subpar game console on the masses so they don't have to consider it a failure. Why is no one asking the why the most powerful game console in history, beside the fact that it's a FUCKING GAME CONSOLE also, has more features than any other Blu-Ray player, but still manages to be the cheapest? We are getting fucked. Don't buy Blu until they get their shit together and start dropping prices.