Question: Does anyone have accurate fugures on the licensing fees for player and disks for the two main contending formats? Thanks, Dale
Not 100% certain, but got this info from a Sony rep. The costs included for producing a Blu-Ray disc for replication can start at around $26,500. This number includes the following: $5.00 USD Per disc Replication fee (min: 2,500 ) $1,500 USD AACS fee. Not a big deal for studios, but might be pretty expensive for indie/low-budget filmmakers, since they can get a movie added to OnDemand for less (don't know the exact figure) than that! That's why BR will never be a format for film aficiandos, at least until costs come down.
I think most people have a large misconception about the movie studios. They know the past success of the dvd was due to having one accepted format. They know the people they deal with that sell their movies and discs. More than any sane individual, these mega stores and outlets want one format to maximize profit per square foot of store space, rather than splitting their rack space into 2, 3, or even 4 of the same or similar performing formats.
The studios don't want to screw the customer--they rely on them. But other than the movie theatres, they rely on sales outlets to make them more money on the after initial release market. They know it will cause mega store anxiety and likely cause them to pick a format when the studios don't do it first.
These stores read the sales of discs and see that despite the monumental lower costs of HD machines the Blu Ray discs still outsell them. Notice that Target has just decided to go Blu Ray because they want less customer confusion, they sell a lot of Sony PS3's and games already, and that disc rack space is at a premium. All the studios get strong feedback from the mega stores, one way or another.
Even though Warner Bros has opted to go Blu Ray, Paramount still says it will support HD. But it has in its contract that it can opt Blu Ray if Warner bros. goes that way. I would bet it won't be long before Paramount goes Blu Ray while fulfilling the series and some movie releases in HD. Toward the end of 2008 I would bet there will be no more HD releases fromParamount. Thiswould give Blu Ray over 80% of the market.
I truly don't care who "wins", but it seems obvious with the pending recession andhow much the studios rely onm disc sales for 50% of their profit, I have a hard time believing that the rest of the studios by 2009 will be Blu Ray.
It just makes business sense in not being marginalized and not having many stores selling their product, except maybe through amazon.
My timing may be off--it may happen faster or slower--but it appears inevitable. This is just strictly a business observation.
Greg:
You seem to know more about the Hd disc business and the law than anyone else here, or apparently anywhere else; how did you come upon all that knowledge?
Phil
I have two relatives in the studio business--one at Paramount and the other at Warner Bros. They both explained to me how these basic negotiations go on. When huge rental outfits like Netflix tell them that only 0.3% of the discs they rent out are Hi-Def it gives the studios heartburn. They all realize that while there are no guarantees in life, the best chances for the Hi-Rez discs to succeeed will be with one format. Both Warner and Paramount originally started with Toshiba, thinking the simplicity of production and Microsofts coding involvement seemed to give HD a large edge.
But when they saw how many Blu Ray discs are being bought by PS3 gamers along with other users and possible advantages to not having to be in bed with Microsoft Warner was first to take the leap. Paramount still espouses HD support, but my uncle at Warners tells me Paramount is only waiting to fulfill contract obligations and will be looking for a proper time to go Blu Ray.
How many times have we seen the owner and GM of a baseball team say I support my manager, only to fire them at the end of the season. I would take Paramounts wishy-washy HD proouncements with less than a grain of salt. They don't want to be marginalized. Thay all know that 99% of people still buy dvd's and the only chance for a REAL success in HD disc area is for one format.
It is liokethe ring in Lord of the Rings. "One Format to rule them all, One Format to find them, One Format to bring them all and in the darkness bind them."
Years ago (1990 if memory serves me correctly) when HDTV itself was peaking up over the horizon I held a large HDTV conference in New York City. I had several of the studios there, most of the manufacturers, and the big retailers. At that time we didn't have the DVD as yet so we talked about tape formats with the same focus -- "get to one standard or format as that beats all other business options". There was a industry-wide committee formed a year or so later headed up by the former CEO of RCA (Dr. Joseph Donahue) and that committee "standardized" a single tape format for HDTV, but by the time that was ratified (and it was by all major players) the DVD was clearly seen as a new comer. The tape format was put away and used later in some of the digital cameras but never introduced as a serious product for pre-recorded movie market. But I remember from that conference and various interviews with the stuidios, both then and recently, that the same thing being said above by Phil was said then--"get us to one format so we don't have retail shelf space conflict/costs nor consumer confusion".
Another argument one hears in support of a single format over two is that with one you avoid a proliferation of standards trying to best the chief contenders. We see this today with the red laser entry. There are others in China trying to get attention.
Perhaps when/if online sales replace those made in brick and mortar the number of formats can expand without a great anxioty being felt in the industry. But that is speculation. What is far less speculative is the present day advantage there is to all for having one format in the marketplace for each category of product. It is painful to the loser of a good contest but that is the outcome of a contest. Mark Knox, who was until recently the chief spokesperson for the Toshiba camp, made it very clear in an interview with HDTV Magazine that Toshiba was not hanging its future on any HD DVD success. They are an astoundingly good technology (big) company with many things in the works that are every bit as exciting as the HD DVD and they are not to be unduely phased by a win or a loss. No doubt there is a struggle by those within the competing companues who are emotionally invested in a format, but there comes a time in such relatively small matter as a technical format for consumers when we all see that life is easier with an agreement more than it is with protracted and fruitless disagreements.
What is far less speculative is the present day advantage to having one format in the marketplace for each category of product.
Please define "category of product". The gaming "category" has two competing formats. If game publishers want to sell their titles to the most consumers possible, they simply release in both formats. Done. Why can't the major studios simply release in both formats. The gaming indistry has been doing fine with that approach for 10-15 years. No one's complaining about the format war there.
Go ask those game publishers and retailers if they would prefer one media format over 4 (PS3, Wii, Xbox, PC) and I guarantee you they'll say yes. It definitely costs more but apparently the profits of selling on multiple platforms outweighs the cost. But it's apples and oranges because each platform has something unique whether it's a particular game (Gran Turismo on PS, Mario on Nintendo, etc.) or controller or other feature.
What difference does the average consumer see when comparing HD DVD and Blu-Ray? None. Both deliver a movie in HD with surround sound.
The gaming industry is not the TV industry. It attaches to the TV but it definately is a different species. By category I mean tape, disc, high definition disc, and transmission standards (over-the-air). Television is in nearly every household more so than is the telephone and for that reason a strong unifying standard is always sought, if not always achieved. _Dale
The gaming industry is not the TV industry. It attaches to the TV but it definately is a different species. By category I mean tape, disc, high definition disc, and transmission standards (over-the-air). Television is in nearly every household more so than is the telephone and for that reason a strong unifying standard is always sought, if not always achieved. _Dale
I know the gaming industry is not the TV industry, but why are you telling me that? Does that have something to do with the answer to my question? Certainly that's not the entire answer.
Could someone please answer my question?: If the gaming industry can sustain two formats, why not home video? Please explain why they are different, other than just saying one is not the other.
If all I'm going to get here is "sour grapes", "apples and oranges" or any other kind of fruit thrown at me, I'll take my questions elsewhere.
I am a wounded warrior in this format war...
...who chose 'Toshiba' for a number of reasons. with number one being.. past hardware longevity still have a 10+year old VHS VCR that tracks 20year old VHS tapes with out error.
[every Sony{TV, Stereo Receiver, Portable Audio}, Panasonic {TV,VCR} and Samsung{VCR, DVD Player} product purchased in the last twenty years failed on day warranty expired + 1 day]
I will support HD-DVD as long as I can..
Then I will go back to DVD..(as long as the format is around) as I will not purchase a game machine for my movie watching and all seem to agree that none of the current 'Blu-Ray' set top boxes will support future Java features that are standard in current HD-DVD drives
If my only future choice is then to download 'HD' movies using the 'DirecTV's VOD feature on their newer HD+DVR receivers.. I will never purchase another box such as AppleTV.
[side note: I hope that Universal keeps backing the HD-DVD format till all seasons of "HERO'S" gets released in this format]
PS: Comment on the article: Poor early-2008 sales alarming for remainder of HD DVD camp
By Ars Technica::: I find this to be a 'catch 22' issue, retailers are not carrying stock, so they can come along and say poor sales so why stock? Impulse buyers will purchase DVD copy of a movie and also when stores such as Circuit City offer the same movie on DVD for $4.99 and the 'HD (Red or Blue)' for $29... which would you really purchase? My market area has six Wal-Marts and three of them that I visited did not have any 'HD(Red or Blue)' movies in stock this past weekend.
I answered it. Which part of my answer did you not agree with? Or are you just here to complain about fruit?
You didn't answer my question. You answered a question I did not ask. I'm not saying that game publishers (or studios) wouln't prefer a single format ... I'm sure they would. My point is that the gaming industry can support 2 formats, why not home video? That is the question I want answered. Why is the media (this site included) so bent on driving a wedge between these formats and placing emphasis on a "winner", when it appears both can co-exist peacefully?
But it's apples and oranges because each platform has something unique whether it's a particular game (Gran Turismo on PS, Mario on Nintendo, etc.) or controller or other feature.
The home video industry has this too: Exclusive titles, unique content on one format vs. the other, etc. So looks like "apples and apples" to me.
The answer to the question (IMHO) is rather simplistic. I can't say why, but for some reason the HD dvd market - for that huge mass of 'ordinary' people, think this is a one way or the other situation. And they are afraid of what seems to be happening - losing their investment.
I think the game industry started so slowly, with many game types over the years. So it was no big shock for example when Xbox came out. I mean, Ninetendo and Sony were probably having fits, but the bulk of that market did not stop buying in fear.
Now that all seems silly to me in the HD market...after all, there is shelf space for those silly PSP movies (talk about your irrational format!), regular DVD's and all their reissues and at least one HD rack. Bottom line is if the customers are buying, then the retailers - while maybe not wanting too - will make rack space. It's their job, their business. And they usually have lots of rack space for marginal items. They probably like to have less TVs, less cameras, less of everything - but that is not how it generally works until the vendors die off.
While the retailers had their way of placing their votes, this HD situation seemed to be a studio/payola decision. And that warped decision seems to have been made (the payola taken) simply because the 'ordinary' customer was scared.
Simple. And in the end, the marketing staffs/corporate boards do not seem to be listeing to us!
Has everyone forgotten laserdisc? It offered superior audio, video, and all the extras of today's DVDs. Yes, it was a niche market, only reaching about 3 million users. But that was primarily due to lack of advertisng and high prices (both for players and discs.) And it co-existed with VHS for 20 years! Could have even went on a bit longer, but Warner's was one of the studios to prematurely eliminate the format from its movie releases.
Everyone is making good points but people who are paid a great deal to make business decisions in this field continue to advise us that one format is better for all than is two or more. I also know from first hand experience that the movie studios will sell to you a product of theirs on whatever format or media you want as long as you are willing to pay the price they ask for it and that there is DRM in play. I knew people in Hollywooed years ago who had professional Panasonic D5 machines and were buying movies in that HDTV format for their home theaters.
My point is that the gaming industry can support 2 formats, why not home video? That is the question I want answered. Why is the media (this site included) so bent on driving a wedge between these formats and placing emphasis on a "winner", when it appears both can co-exist peacefully?
Because the game consoles are driven by specific game titles. If you want Mario you buy a Nintendo and then you play that Mario game for months, even years. Same for Gran Turismo on PS2 (and soon PS3). I know Xbox has proprietary games, too. It's easy to justify a second console if you want the games that go with it because you'll get months or years out of them.
Contrast that with the average consumer who wants to watch a movie in HD - probably once, maybe twice and it should be obvious why they're reluctant to deal with 2 formats and 2 players. Not to mention the cost (especially if you discount the Toshiba lost leaders).
I was in Fry's recently doing some Christmas shopping. Their aisles are approximately 40 feet long. Video games (for all formats) took up 1.5 aisles. DVDs (in just one format) took up at least 6 if not 8 aisles. Double that and you can see why retailers are nervous.
I don't understand why this is such an emotional issue. If the end result is quality HD movies in one format with less total cost and no confusion - how can that be bad?
Everyone is making good points but people who are paid a great deal to make business decisions in this field continue to advise us that one format is better for all than is two or more.
Buy aren't we allowed to ask (and know) why?
I make a great deal of money as a consultant too, but I always explain to my customers why I'm doing things. I don't just say "I make a lot of money, so just accept it".
It's fine to say that, as long as it can be sufficiently explained. How do we know that the move to a single format was done to further the category vs. a huge pay-off to the studios?
Ask and know why...well obviously we can all ask. But know why - they are not forthcoming at all. Statements, yes. Accurate, maybe not so much. It's their game - they're paid the (maybe) big bucks and sit in the meetings reading the charts we never see.
Eliminate consumer confusion, optimize economies of scale, add disk capacity (Blu ray side), re-establish or establish retailer satisfaction, improve industry gross in all DVD-related sales
Those are the only reasons I know and I have no more to contribute to the subject. If you doubt the voracity of those reasons you should contact the studios and ask them. They are public companies and must report their financials. A few hundred million dollar windfall will show up on the record. All of the studios have a PR department that is charged with making the actions of the company known and clearly understood. Write them or call them and tell them you are about to do a very penitrating article on their respective involvements with the high definition DVD format decision and you need a fully verifiable statement from the company president that they did or did not receive a financial pay off for selecting Blu ray or HD DVD? Trust me, they will give you the statement you are looking for and embellish it with the reasons leading up to the choice. _Dale
Eliminate consumer confusion, optimize economies of scale, add disk capacity (Blu ray side), re-establish or establish retailer satisfaction, improve industry gross in all DVD-related sales
You still haven't answered my question. All those things may be true, but they would also apply to the gaming industry, yes?
I will ask again, just so you are crystal clear on what I'm asking ("I don't know" is an acceptable answer):
If the gaming industry can sustain two formats, why not home video?
The first thing that comes to mind, assuming all studios are publishing in both formats, is competition. Keeps player prices low, keeps media low.
I guarantee you that if/when HD DVD bows out, you will see an almost immediate end to all BOGO and half-price Blu-ray sales.
So, I answered your question, how about taking a stab at answering mine?
- Miller
I already answered your question - you just didn't like the answer.
You're assuming that with only one format there is no competition for players. With only one format to worry about every major electronics mfr (Sony, Samsung, LG, Toshiba, etc.) will make competing Blu-Ray players. It worked great for standard DVDs with one format - why would this be any different? In fact we should have more competing versions of a single format than we would for each of 2 formats since some mfrs would choose one or the other, not both.
The BOGOs and half-price sales (as well as the lost leader cheap players) were temporary anyway. Both sides are trying to buy their way into market share and they are (or were) spending huge amounts of money and there is no way that is sustainable over the long haul. At some point you either fold your hand or agree to split the pot.
If your arguments were valid then why did we not see these problems with standard DVD? You can buy a DVD player now for $19 and DVDs are also dirt cheap. Why would Blu-Ray be any different?
That is the assumption I am making Richard. Please re-read from the start for a complete picture.
My claim is that every studio should publish in both formats. It works for the gaming industry ... and this leads to my question: If the gaming industry can sustain two formats, why not home video?
I already answered your question - you just didn't like the answer.
I asked a question and you replied with a question of your own ... how is that an answer?
You're assuming that with only one format there is no competition for players. With only one format to worry about every major electronics mfr (Sony, Samsung, LG, Toshiba, etc.) will make competing Blu-Ray players. It worked great for standard DVDs with one format - why would this be any different? In fact we should have more competing versions of a single format than we would for each of 2 formats since some mfrs would choose one or the other, not both.
I'm not assuming anything. You asked what the benefit of more than one format was and I said more competition. That is true, as is your statement above. But is still doesn't answer my question.
The BOGOs and half-price sales (as well as the lost leader cheap players) were temporary anyway. Both sides are trying to buy their way into market share and they are (or were) spending huge amounts of money and there is no way that is sustainable over the long haul. At some point you either fold your hand or agree to split the pot.
If you say so, but that still doesn't answer my question.
If your arguments were valid then why did we not see these problems with standard DVD? You can buy a DVD player now for $19 and DVDs are also dirt cheap. Why would Blu-Ray be any different?
I'm not making any arguements, I am asking a question. It's not rhetorical, I don't know the answer, I'm hoping someone here does.
So one LAST time:
If the gaming industry can sustain two formats, why not home video?
akirby did a great job of explaining the differences in previous posts.
He didn't list any differences, he listed similarities. All the items he listed apply to both movie and gaming industries alike, and therefore did not help answer my question.
Are you saying that 2-3 years ago you were for another format war and that would be in the public
Here is your answer, for the second time. Did you not see it or did you just ignore it because you don't like the answer?
My point is that the gaming industry can support 2 formats, why not home video? That is the question I want answered. Why is the media (this site included) so bent on driving a wedge between these formats and placing emphasis on a "winner", when it appears both can co-exist peacefully?
Because the game consoles are driven by specific game titles. If you want Mario you buy a Nintendo and then you play that Mario game for months, even years. Same for Gran Turismo on PS2 (and soon PS3). I know Xbox has proprietary games, too. It's easy to justify a second console if you want the games that go with it because you'll get months or years out of them.
Contrast that with the average consumer who wants to watch a movie in HD - probably once, maybe twice and it should be obvious why they're reluctant to deal with 2 formats and 2 players. Not to mention the cost (especially if you discount the Toshiba lost leaders).
I was in Fry's recently doing some Christmas shopping. Their aisles are approximately 40 feet long. Video games (for all formats) took up 1.5 aisles. DVDs (in just one format) took up at least 6 if not 8 aisles. Double that and you can see why retailers are nervous.
I don't understand why this is such an emotional issue. If the end result is quality HD movies in one format with less total cost and no confusion - how can that be bad?
Slight difference here. Gaming platforms have major differences that are apparent to even the most average consumer - different controllers, HD capability, networked gaming, etc. including the biggest one - games. Do you think anyone would have bought a Nintendo 64 without Mario? No way. Same for PS2 and Gran Turismo. I'm sure Xbox has similar games that are Xbox exclusive.
Shift to HD movies - the average consumer puts in a disc, pushes play and watches a HD movie with great surround sound. There is no difference between HD DVD and Blu-Ray (again, for the average consumer). Cost is also a factor - it's a little easier to buy 2 video game consoles for as little as $300 than it is to buy both DVD formats for 2-3 times that much with no discernable differences.
We can argue the technological differences forever but that won't change the average consumer's perception.
We seem to have gotten by nicely with just one format for standard DVD. Any company can make a player for both formats, so there's no monopoly on the hardware. To the average consumer, the end result of both formats is identical - viewing a movie in HD on a HDTV.
What can we possibly gain from keeping 2 formats that would offset the hassle of having 2 formats?
You either have to commit to one format and forego content made only for the other format or you have to buy 2 players that deliver essentially the same content at the same resolution. If you're exchanging movies with friends you have to know which format(s) they have.
And there is no way it can be cheaper to mfr movies in both formats or half the movies in one and half in the other.
Go ask those game publishers and retailers if they would prefer one media format over 4 (PS3, Wii, Xbox, PC) and I guarantee you they'll say yes. It definitely costs more but apparently the profits of selling on multiple platforms outweighs the cost. But it's apples and oranges because each platform has something unique whether it's a particular game (Gran Turismo on PS, Mario on Nintendo, etc.) or controller or other feature.
What difference does the average consumer see when comparing HD DVD and Blu-Ray? None. Both deliver a movie in HD with surround sound.
Apples and oranges.
There is more from Greg, allchemie, explaining what the distribution chain wants.
The most common device in the customers home after the TV is a DVD player and before that it was the VHS VCR. Gaming consoles don't even come close to having that kind of common under their belt! The key here is we need to get out of the test tube of what ifs and deal with what is. No law or economic philosophy can explain this, only the wisdom of experience. That collective wisdom cried out for one format before the war started, that is what the mass market and industry wanted. All Sony, Toshiba and their benefactors could see was the shiny pot of royalty gold at the end of the technology rainbow for the winner. THEY wanted the war, not the rest of us!
