Paramount HD DVD payoff mentioned in Viacom financials

[Maximus]

That was offset in part by a 22% bump in home entertainment revenue on one-time items including a $29 million payout from Toshiba for Par’s exclusive backing of the HD-DVD. The format lost the DVD war last year to Sony’s Blu-ray. Viacom said homevid revenue would have been down slightly if the payout wasn’t included due to lower catalog sales.

http://www.variety.com/article/VR111...goryid=13&cs=1

[Musashi]

We can add this to the stack of proof.

Ultimately, I can't help but think the move hurt them more than it paid.

[Maximus]

It's amazing that all of those people screaming payoff at Time Warner can't find a shred of evidence for it while Paramount have mentioned it a thousand times and people won't believe it.

[dialog_gvf]

Originally Posted by Maxpower1987

It's amazing that all of those people screaming payoff at Time Warner can't find a shred of evidence for it while Paramount have mentioned it a thousand times and people won't believe it.

Indeed. People believe what they want to be true.

The same people are screaming how poorly Blu-ray is doing. Which is incredible considering the data shows it's doing quite well. It saved the last quarter for sell-thru.

The egos and reputations that were masacred by HD DVD's loss are still out there hoping for an ultimate "I told you so".

Gary

[Anthony P]

Come on Max, everyone knows that companies that supported HD DVD where doing so because it was better unlike the companies supporting BD.

[Clark Kent]

The payoff prolonged the format war until January 4th 2008, so Toshiba really got very little for its money. Even with a major studio dropping Blu-ray it revealed the underlying weakness of the HD DVD strategy. This was never really a close fight.

[dakota81]

Originally Posted by dialog_gvf

The egos and reputations that were masacred by HD DVD's loss are still out there hoping for an ultimate "I told you so".

Gary

And they will never get that chance.

They're still trying, though. I just laugh. I wish I could see them a year from now with their horde of clearance HD DVD movies and 5 backup players sitting in a closet not been used in months. They'd never admit it, and I certainly don't need confirmation to get joy out of the situation.

[Musashi]

Originally Posted by Maxpower1987

It's amazing that all of those people screaming payoff at Time Warner can't find a shred of evidence for it while Paramount have mentioned it a thousand times and people won't believe it.

I've seen them before. Not sure if you've ever been to http://donedealpro.com, but if you look into my post history there (as Super Saiyan Musashi), you'll see this ** who somehow expected everyone to believe his FUD, which he "proved" with babyish insults instead of links and citations.

[Rabidhunter]

30 million dollars, that was all? Isn't that like Bill Gate's daily allowence? It is insulting that Paramount sold out for so little. Quite too bad at any rate. But I can't blame them, money is money and it makes the world go around... Or is that gravity, I forgot.

[ranma]

Originally Posted by Rabidhunter

30 million dollars, that was all? Isn't that like Bill Gate's daily allowence? It is insulting that Paramount sold out for so little. Quite too bad at any rate. But I can't blame them, money is money and it makes the world go around... Or is that gravity, I forgot.

Allerged payment to paramount is $50M, ($100M to dreamwork to use shrek as promotion). $30M as downpay is a large chunk of $50M. I bet Paramount is still thinking they are so smart to get $30M by doing nothing. and Dreamwork's deal is sweeter, receiving $100M, released only 1 title on HDDVD.

[jdc115]

Originally Posted by Rabidhunter

30 million dollars, that was all? Isn't that like Bill Gate's daily allowence? It is insulting that Paramount sold out for so little. Quite too bad at any rate. But I can't blame them, money is money and it makes the world go around... Or is that gravity, I forgot.

Well, I can understand it given the early stage of the format. You can look at it this way, they probably wouldn't make that kind of money selling HD content in the next 18 months. If HD-DVD ended up winning, they made a very smart choice. If both formats survived, they could return to Blu at some point though with some unhappy customers but in time everybody would forget about it. And later adopters wouldn't care so much anyway.

And as it turned out, Blu wins, they made more money with this payment and still get to release on Blu. I know some people still feel pissed off at them, but over time that will go away and there are not enough pissed off people to cost them $30M

It didn't seem like a bad business decision and probably still won't be in the long run.

[bluflu]

Paramount's bribe was successful at delaying the adoption of Blu-ray past the important holiday buying season. But we all knew they would eventually come crawling back. They lost a lot of respect in my book. Paramount, here's your sign

[scragham]

Originally Posted by Maxpower1987

It's amazing that all of those people screaming payoff at Time Warner can't find a shred of evidence for it while Paramount have mentioned it a thousand times and people won't believe it.

seriously one of the most bizarre thought processes (... or lack thereof?) from the red ants.

[BluOgre]

Only $29 million??????

Honestly they could have lost that much not releasing on Blu-ray. I thought it was like $100+ million lol. If it was only $29 Paramount was a bunch of idiots. Transformers alone lost them millions in sales. My guess is they could have sold a quarter of a million units for that title alone.

[Zyclone]

Originally Posted by BluOgre

Only $29 million??????

Honestly they could have lost that much not releasing on Blu-ray. I thought it was like $100+ million lol. If it was only $29 Paramount was a bunch of idiots. Transformers alone lost them millions in sales. My guess is they could have sold a quarter of a million units for that title alone.

as someone else pointed out the total was $150 million , 50 to paramount and 100 to dream works , they only got 30 million of that money before hd dvd flat lined.

[Dynamo of Eternia]

Originally Posted by BluOgre

Only $29 million??????

Honestly they could have lost that much not releasing on Blu-ray. I thought it was like $100+ million lol. If it was only $29 Paramount was a bunch of idiots. Transformers alone lost them millions in sales. My guess is they could have sold a quarter of a million units for that title alone.

You are dreaming if you actually think that the sales of Paramount Blu-Ray discs during the time frame of their HD-DVD exclusivity would have earned them $29 million or more. It was then, and is still now, a niche product. I do hope it goes more mainstream in time, but in the short run Paramount made much more money than they otherwise would have, and in the long run they are releasing on Blu-Ray again anyway so it really won't have a long-term negative effect.

Did you actually read the first post? Viacom and Paramount were expecting LOSSES (compared to the previous year) prior to the HD-DVD agreement. That means that if they had never gone HD-DVD exclusive and stuck with their existing business model of releasing movies on both Hi-Def formats, they still would have been projecting coming up with less profit than the year before. The HD-DVD deal is what prevented that from happening.

I don't blame people for being upset and annoyed about what Paramount did. Obviously it was very frustrating for many, many Blu-Ray fans.

However, people need to look at the reality of the situation. From a business standpoint for the interests of Paramount, Viacom, and their investors, it didn't turn out so bad. They made their extra money, and now that HD-DVD has died off, they are making movies on Blu-Ray again.

You can be upset and frustrated, but to say that they would have made $29 million in PROFIT (mind you, the key word is profit) from the sales of Blu-Ray movies over the past few months is grossly inaccurate. For each disc sold, some of the money is recouping the cost of making the disc, and the rest gets divided in a few different directions, with Paramount only getting a certain chunk of the profit. Plus keep in mind that it's likely that many of the people who only had Blu-Ray and not HD-DVD during this time likely just went out and bought the DVD versions of the movies that were impacted by this deal. I realize some people heald off, but I would imagine for any movie that these people REALLY wanted to get, there were more who caved in and bought the DVD compared to those who heald off from getting the movie at all.

It's funny how lies, inaccurate information, and 'FUD' are so looked down upon around here when they are working against the Blu-Ray format, but when those sorts things are used in favor of Blu-Ray (as is the case here with people trying to convince themselves and others that Paramount & Viacom are hurting more from their HD-DVD deal than they would be if they had never made that deal), somehow no one calls anyone else on it and it's just perfectly fine.

Don't get me wrong, I love the Blu-Ray format, and I am glad that we now have one primary Hi-Def disc format that all of the studios are gravitating towards. I personally wish Paramount had never made that deal, either. I was very frustrated about it just like many of you were. But I can't argue with how it HAS worked out for them, regardless of my personal opinions of the situation.

[Ferris]

Originally Posted by Maxpower1987

http://www.variety.com/article/VR111...goryid=13&cs=1

GOOD FIND!

So much for suspicion, eh?

[Dynamo of Eternia]

Originally Posted by Musashi

We can add this to the stack of proof.

Ultimately, I can't help but think the move hurt them more than it paid.

Somehow I doubt that to be true (the part about this hurting them more than it paid). While I understand the frustration that this gave to many Blu-Ray fans, the Hi-Def home video market at the time was (and largely still is) a very niche market.

Odds are if they had stayed neutral or gone Blu-Ray exclusive (with no pay-off for that exclusivity), they wouldn't have made up the money that they got from the HD-DVD pay off in disc sales during that time, since for the most part DVD sales during that time were still their big profit center.

And as the quote in the first post of this thread states, they had a 22% percent revenue bump because of the pay off, rather than the decline they would have otherwise expected (in theory still releasing movies on both formats in that scenario).

Now that HD-DVD is dead and they are releasing on Blu-Ray again, they will simply gradually release the movies that would have been on Blu-Ray to begin with if they had been making it all along. They may have lost a few sales here or there in would-be day-and-date releases with people buying the regular DVDs instead, but in the grand scheme of things that is very small potatoes.

Most Blu-Ray fans who want any particular Paramount movie on Blu-Ray will simply buy it when it is made available. The only ones who won't will be the very, very small handful who might choose not to buy Paramount movies in the form of some kind of futile protest that in the long run will mean nothing because the amount of people who will actually skip buying movies that they want because of a protest like this will be very few and very far between.

This may have been a terrible thing from the standpoint of Blu-Ray fans/consumers and for the format war in general (at the time they made this deal), but from a business standpoint, in the interests of Paramount, Viacom, and their shareholders, clearly this wasn't such a bad idea afterall. They got almost $30 million, and only had to stop releasing their movies on Blu-Ray for a few months. Somehow I doubt this is going to cause them a tremendous amount of hurt.

[ellldiablo]

Honestly WHO CARES?????? Blu was victorious so they droped the ball on that. Let's just get the titles out cause thats all that really matters now.

[PepeGameblouse]

Originally Posted by Dynamo of Eternia

Somehow I doubt that to be true (the part about this hurting them more than it paid). While I understand the frustration that this gave to many Blu-Ray fans, the Hi-Def home video market at the time was (and largely still is) a very niche market.

Odds are if they had stayed neutral or gone Blu-Ray exclusive (with no pay-off for that exclusivity), they wouldn't have made up the money that they got from the HD-DVD pay off in disc sales during that time, since for the most part DVD sales during that time were still their big profit center.

And as the quote in the first post of this thread states, they had a 22% percent revenue bump because of the pay off, rather than the decline they would have otherwise expected (in theory still releasing movies on both formats in that scenario).

Now that HD-DVD is dead and they are releasing on Blu-Ray again, they will simply gradually release the movies that would have been on Blu-Ray to begin with if they had been making it all along. They may have lost a few sales here or there in would-be day-and-date releases with people buying the regular DVDs instead, but in the grand scheme of things that is very small potatoes.

Most Blu-Ray fans who want any particular Paramount movie on Blu-Ray will simply buy it when it is made available. The only ones who won't will be the very, very small handful who might choose not to buy Paramount movies in the form of some kind of futile protest that in the long run will mean nothing because the amount of people who will actually skip buying movies that they want because of a protest like this will be very few and very far between.

This may have been a terrible thing from the standpoint of Blu-Ray fans/consumers and for the format war in general (at the time they made this deal), but from a business standpoint, in the interests of Paramount, Viacom, and their shareholders, clearly this wasn't such a bad idea afterall. They got almost $30 million, and only had to stop releasing their movies on Blu-Ray for a few months. Somehow I doubt this is going to cause them a tremendous amount of hurt.

i would have to agree with that big time. they made more money right there in one day rather than over the course of a few months