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Sony Paid Warner Bros. $400 Million to Go Blu-Ray?

Posted by ScuttleMonkey on from the beats-having-to-say-hd-dvd-all-the-time dept.

eldavojohn writes "How much would you pay to be the leading video media technology right now? Is $400 million too much? Sony didn't think so and this article speculates that's how they won the Hi-Def format war. 'With billions of dollars in global sales at stake, experts had predicted the Toshiba-Sony battle would go on for years - not unlike the 1980s battle of videotape formats between VHS (Matsushita) and Betamax (Sony). That war lasted a decade, leaving Sony battered and humiliated. So how did this epic battle come to such an abrupt end? The answer lies in part with the bruising Sony experienced with Betamax, which, like Blu-ray, was also the better product on paper.'"

32 of 487 comments (clear)

  1. free market? by timmarhy · · Score: 3, Insightful

    Now all those woffling on about free market eat your own hats.

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    1. Re:free market? by FauxPasIII · · Score: 4, Insightful

      No they won't. For that crowd, bribery, collusion and cartelism are all part of the free-market experience, and they like it just fine! Just so long as the gummint doesn't butt in on all the fun.

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    2. Re:free market? by Captain+Splendid · · Score: 4, Insightful

      Beat me to it. This is why I can't support unregulated capitalism (cue downmods from the /. libertarian brigade).

      Here's a thought exercise for you guys: Wipe the slate clean, everybody starts from zero, Adam Smith's extreme younger brother is in the hizzy.

      Now, exactly how many seconds pass before two or more similarly skilled people start pooling their resources to reduce cost/corner the market? You'd go from 0 to Microsoft in no time flat with this method.

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    3. Re:free market? by Citizen+of+Earth · · Score: 4, Insightful

      This is why I can't support unregulated capitalism

      Not to worry — there is no such thing.

    4. Re:free market? by Captain+Splendid · · Score: 5, Insightful

      the 'state'

      It's spelled 'we, the people', dumbass. The 'problem', such as it is, isn't the system, but your particularly shitty implementation of it.

      --
      Linux, you magnificent bastard, I read the fucking manual!
    5. Re:free market? by Sciros · · Score: 4, Insightful

      Without some regulation, what happens is the gap between the haves and the have-nots increases even further. This isn't good for the economy of a country as a whole, by the way.

      There's nothing insightful about your post; it's typical anarchist rhetoric, bound to no historical precedent or foresight.

      --
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    6. Re:free market? by hal2814 · · Score: 4, Insightful

      Why? Sony made a smart business move wooing their competitor's biggest supporter with money. Toshiba lost out but if WB was the only thing keeping them alive, then it wasn't like their planning was exactly stellar. They deserved to lose at that point. WB doesn't care one way or another as long as their content sells. They don't really have a horse in this race even though they've acted like it. They could easily abandon BluRay tomorrow. The only party that didn't get what they wanted out of this deal was relying on another company's non-binding agreement to keep their entire product line alive. If you're that upset about it, then feel free to release your content on some other format. The free market lets you do that.

    7. Re:free market? by cHiphead · · Score: 3, Insightful

      I think a better question would be how and what can be done differently, on an specific level, not just an answer of " 'the state' is bad and we need to change it".

      Cheers.

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    8. Re:free market? by Penguinisto · · Score: 5, Insightful

      the 'state'

      It's spelled 'we, the people', dumbass. The 'problem', such as it is, isn't the system, but your particularly shitty implementation of it.

      ...shitty implementation of which system?

      We got to see at least three major (and differing) implementations of Marx' setup. The number of deaths from it climbs up into the hundreds of millions, all told, and in places like North Korea, still climbing at horrific rate. Problem is, too many people are eager to claim their actions in the name of "the people", but the reality ends up being just the opposite. I think the USSR lasted approximately three years before it stopped being about "the people" and started being about "the state" (and yes, there is a distinction).

      Capitalism (as practiced) isn't exactly a perfect system either (far, far from it). Quite frankly, it can outright suck at times. OTOH, it does have a tendency to keep its body counts down to a much more acceptable level.

      Socialism? Cool... now who gets to fund it all when the majority of a populace figures out that they can do just fine without actually having to work for what they get? Ayn Rand may have been a nut case, but she does have a point - even economics has an ecosystem that requires each part of it to function well enough to survive. Humans are too damned lazy in nature to be eager about providing excessively for others in a system where they objectively don't have to.

      Now here's the weak link in your arguments as per the free market... Collusion only works for as long as the people are willing to fund it. If not enough people buy Blu-Ray gear to justify the costs going into it, it eventually dies. If something freer, easier, and cheaper comes along (pick at least two) Last I checked, a lack of Blu-Ray gear won't prevent me from eating tonight, nor will that lack prevent me from drinking clean water, or having a nice warm environment in which to sleep tonight. This in turn leads to apathy among the larger population, which in turns leads to...

      ...fact is, the problem isn't the system per se - the problem is that too few people actually give a damn enough about forcing a change in the nastier incidents within it, at least not until the impact of any aspect affects them personally.

      /P

      --
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    9. Re:free market? by Sancho · · Score: 4, Insightful

      The idea is that competing products weren't allowed to compete on the merits of the product--rather, they were competing based upon who could grease the most palms.

      In this case, however, it could turn out to be better for the consumer. If there hadn't been these bribes, who knows how long the format war would have lasted? I bought into HD-DVD and I think that it was the superior (for the consumer) product, but without these dirty tricks, the format war could have gone on for years longer, and any customer who wanted to upgrade to HD would have to either buy two separate players (or one combo player which is much more expensive and which doesn't include all of the features of any one player) or relegate themselves to only buying movies from studios who support that format. Worse, it might be a trend that the studios realize they could push further--imagine if each studio had its own format (as you see with DRM downloads, in some cases) requiring its own player?

      That doesn't mean that allowing bribery, collusion, etc. is better in the general case.

    10. Re:free market? by DrSkwid · · Score: 3, Insightful

      > it does have a tendency to keep its body counts down to a much more acceptable level.

      Or rather, it confined it's holocausts to the 18th & 19th century

      they'll be back

      --
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    11. Re:free market? by DragonWriter · · Score: 3, Insightful

      Free-market is not without its troubles, but its still a far better solution then letting the 'state' run things.


      That's a nice bit of ideology; in practice, the policies sold as "free market" amount to letting a narrow group, backed by the coercive power of public institutions acting to protect their narrow interests under the flag of "property rights", etc. This is especially true of "deregulation" efforts, which usually are, in fact, efforts which recast regulations into the form preferred by the leading firms in the regulated industry, and serve largely to protect them from competition and protect and reinforce their dominant position.

      There is a reason that the biggest advocates of so-called "free market" policies are exactly the people that the theorist to whom "free market" advocates like to pay lip service, Adam Smith, warned must always be particularly distrusted when advocating policies because they can be counted on to do so out of narrow interests that will almost invariably be opposed to the public interest, organizations of merchants and manufacturers in particular industries.
    12. Re:free market? by homer_s · · Score: 5, Insightful

      So two people voluntarily made a transaction and you don't like it because it goes against your morals and what you think is "correct"?.

      So you agree with the crowd that wants to ban gay marriage?

    13. Re:free market? by That's+Unpossible! · · Score: 4, Insightful

      What are they, buildings?

      --
      Ironically, the word ironically is often used incorrectly.
    14. Re:free market? by immcintosh · · Score: 5, Insightful

      Short answer, yes and no.

      Longer answer, there are plenty of things we don't allow people to decide to do together. For example, kill each other. Doesn't matter one bit whether it's in private, voluntary, or not, it's simply not allowed. Likewise, things like bribery and collusion are regulated against because the majority find them unacceptable and detrimental to the general public welfare. Until somebody comes up with a consistent, coherent, universal ethical system (and nobody yet has), we're stuck with "mob rules" on a case by case basis when it comes down to it. Either that or barbarism and anarchy. Unfortunately, if the majority find gay marriage unethical (I certainly find no such thing), then we're stuck with that until and unless they become more enlightened.

      That is... unless you've got a Philosopher King in mind for us?

      P.S. Corporations are not people anyway. Here's the difference: people are assumed to have all rights naturally, and laws are made to restrict those rights. Corporations are assumed to have no rights naturally, and laws are made to grant those rights. Big damn difference.

    15. Re:free market? by Headcase88 · · Score: 3, Insightful
      I guess you missed this (emphasis mine):

      However, I realized in my 30's that the libertarian philosophy breaks down when anyone gets much over 100 times the resources of the average citizen
      From my POV it's a close call. There are different types of checks and balances for this kind of thing and using taxes to do so, while not libertarian in itself, doesn't stop someone from being largely libertarian just because they think it's a good idea.

      It's like saying someone isn't conservative just because they support gay marriage.
      --
      "When the atomic bomb goes off there's devastation...but when the atomic bong goes off there's celebraaaaation!"
    16. Re:free market? by spectecjr · · Score: 3, Insightful

      No they won't. For that crowd, bribery, collusion and cartelism are all part of the free-market experience, and they like it just fine! Just so long as the gummint doesn't butt in on all the fun.

      Speaking of the Gummint butting in... whatever happened to the DOJ's investigation of claims that Sony was deliberately sabotaging the HD-DVD consortium?? (In 2004, no less).

      The EU also fined Sony, Fuji, and Maxwell for price fixing... a sign of things to come?

      Last July, the EU started investigating why Blu-Ray was winning, wondering "whether improper tactics were used to suppress competition and persuade the studios to back [Sony's] format."

      *shrugs*

      --
      Coming soon - pyrogyra
  2. No more HD-DVD? by esocid · · Score: 4, Insightful

    Third, the company sold Blu-ray to rival movie studios with the promise of superior digital copyright protection.
    There you go right there.
    1. Promise the movie companies that your formats are less prone to being pirated.
    2. ?
    3. Profit!
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    Absolute power corrupts absolutely. indymedia
  3. We know step 2... by Overzeetop · · Score: 5, Insightful

    ... and it involves a $400M cash payment. No need for question marks for these gnomes.

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    Is it just my observation, or are there way too many stupid people in the world?
  4. Or... by blhack · · Score: 4, Insightful

    Has anyone considered the remote possibility that Blu-Ray won out because it was the better of the two formats? It stores more data. From an end user perspective, isn't this pretty much the #1 thing that matters?

    Granted, geeks know that the DRM on blu-ray is harsher than that on HD-DVD, but if your just joe Movie Watcher does it really matter?

    Just a thought.

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    1. Re:Or... by RightSaidFred99 · · Score: 3, Insightful
      No, nobody has considered that because it's meaningless - especially to Joe Movie Watcher. Both HDDVD and BluRay have more than enough space to provide existing movie content. Look at most HDDVDs, there's usually quite a bit of free space even with extras etc...

      HDDVD also had a path to higher capacities. From a movie-watcher's perspective, BluRay has absolutely 0 technical advantages. In terms of a storage medium it has some advantage, but not one HDDVD couldn't have matched easily enough.

    2. Re:Or... by RightSaidFred99 · · Score: 4, Insightful

      Nah, I don't buy it. It was all about politics and business, not technical merit. HDDVD could have scaled capacity easily, and in fact already had. This just came down to Sony being better at playing the game.

    3. Re:Or... by evilviper · · Score: 5, Insightful

      but Toshiba figured out how to top 50GB using HD-DVD discs as the technology got more mature.

      3-layer HD DVDs was just a PR stunt. None were ever produced, and I'm willing to bet that none of the existing HD DVD players could read them, so it might just as well have been a new format that nobody would have adopted.

      Sony demonstrated much, much higher numbers of layers on Blu Ray discs as well.
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    4. Re:Or... by dreamt · · Score: 3, Insightful

      The price thing was artificial. It was because Toshiba, the only (real) HD-DVD manufacturer cut prices and was taking huge losses on selling the things. The prices on BluRay will come down naturally as technology improves and because of real competition between hardware vendors.

  5. Holy rumor mill, Batman by bconway · · Score: 4, Insightful

    What remains a mystery is just how big a push Warner needed to pick sides. Analysts say Sony only prevailed following a heated bidding war against Toshiba, with the reward reaching as much as $400-million (U.S.). Neither side has confirmed the size of any bids or payments.

    Other than analysts' speculation of payoffs, there's nothing that could be considered fact in this article. Pass.

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  6. I guess free market means bribes by mlwmohawk · · Score: 3, Insightful

    A couple points:

    (1) The betamax people like to claim that betamax was "better" than VHS. This is simply not true. It had some features that were better than VHS, but VHS had features that were better than Betamax. It all came down to the fact that VHS was cheaper and allowed for longer record times.

    (2) The amount of money Sony just sent is proof that Blue-Ray sucks.

    1. Re:I guess free market means bribes by eviloverlordx · · Score: 5, Insightful

      (2) The amount of money Sony just sent is proof that Blue-Ray sucks.

      BS.

      The HD-DVD camp did the very same thing, yet where is the moral outrage? Hypocrisy is alive and well on /.

      --
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  7. Re:Betamax wasn't better. by provigilman · · Score: 5, Insightful

    Well, that, and VHS had porn.

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  8. Re:Market Isn't Even Ready by robizzle · · Score: 5, Insightful

    I don't think the availability of high quality downloads should effect whether or not the market is ready for HD media. Instead, the limiting factor is the ubiquity of high def TVs in the household; there is no sense in getting a blue ray player if you have a 480 TV.

    Conversely, I think the lack of high quality downloads would actually spur increased demand for the delivery of high quality content though other means (in this case, HD discs.) If people have high def TVs, they are going to want high def content. If they can't get high def content from the internet, they will try to get it from high def media.

  9. Total Speculation by feepness · · Score: 3, Insightful
    From the article:

    Neither side has confirmed the size of any bids or payments. It's not like Warner or Sony would be able to keep the payment off their books. These are completely unsubstantiated sour-grapes rumors.
  10. A second PC by tepples · · Score: 3, Insightful

    Why have [pirated] video downloads still not penetrated to the average household nearly as much as DVDs? For one thing, most people prefer not to sit back and watch a movie on a 17 inch screen, and they can't afford to buy a second PC for the room with a larger TV.

    All at the reach of a mouse from my lounge. Who else do you know who has a lounge with a mouse?

    Why would anybody see it as "convenient" to "only" change the disc every two hours or so? Because people have moved on from chamber pots to indoor plumbing, and this indoor plumbing is generally kept in a separate room from the home theater. People are getting up anyway to go drain their waste water; why not change the DVD at the same time?
  11. Re:Market Isn't Even Ready by jtownatpunk.net · · Score: 3, Insightful

    I think the limiting factor is the limited intelligence of the end user combined with the ridiculous complexity of connecting and configuring everything. Long gone are the days when you plugged the coax into the back of your TV and that was it.

    "Hrm. Your cable box has a DVI port and the TV is HDMI. Best Buy will charge you $100 for that cable. Let's order it online for $15 and use component for now. Plug the component video output of the cable box into the component input of your TV. No, that's composite. The red, blue, and green ones labeled Pr, Pb, and Y. Not that red one. That's audio. the other one. I know it looks the same but it's not. The group that's together, outlined by that line. Okay, now plug in the audio. Oh. Your receiver only takes coaxial digital audio and the cable box only has optical. Well, we can get an adapter but it'll cost you a hundred bucks in the store if they even have one. Order it online for $20. We'll hook up the analog audio for now. Okay. Everything's plugged in and it's time to configure the settings. What resolution is your TV? You don't know? Where's the manual? Okay, we'll look it up on the manufacturer's website. Okay. 1366x768. That means you need to set the cable box to 720p. No, there is no 768 setting. Press setup, advanced, output formats, and select 720p. No, not 1080. You don't have a 1080 TV so programs broadcast in 720 will be scaled up to 1080 then back down to 720 and will look really bad. JUST SET THE DAMN THING FOR 720! THE GAME STARTED 10 MINUTES AGO!!!"

    Now you're ready to watch some TV.

    Of course, that's assuming the audio system was already set up and configured properly. Somebody should build a canonical flowchart of possible AV configurations just to show how complicated it really is.