Archived: Ask the Insiders: Judgment Day Edition

[androvsky]

Originally Posted by Maxpower1987

The first one.

MS have informed relevant parties that they will not be investing anymore in HD DVD unless digital distribution is included in any future deals.

Didn't WB's music arm recently start offering unencrypted mp3's through Amazon's download service in an attempt to loosen Apple's stranglehold on downloadable music? I get the funny feeling MS trying for exclusive Xbox Live contracts at the same time that's going on won't fly too terribly well.

[gandley]

well you think MS were investing in HDDVD for free? this was always there plan, and as penton said, now there really showing there colours as they will only continue investment if they get what they want in return.

This was what it was always about.
VC-1 and HDI acceptance would of made it easier to transition studios to MS's download goals. MS viewed HD DVD as a stepping stone.

Big info today, thanks gents.

[Steverhcp02]

Originally Posted by gandley

well you think MS were investing in HDDVD for free? this was always there plan, and as penton said, now there really showing there colours as they will only continue investment if they get what they want in return.

This was what it was always about.
VC-1 and HDI acceptance would of made it easier to transition studios to MS's download goals. MS viewed HD DVD as a stepping stone.

But its not even a pebble yet, and if Max is accurate, MSFT is acting like we are in year 6 of HD DVD being the only format or something.

Bandwidth, monopoly, itunes, hard drive space, i mean this cant be for real is it, Max?

[blindcat87]

While I would never underestimate MS's opinion of themselves, it is entirely possible that this is a way to back out and save fact. They tried to slow things down as long as they could, the cost of continuing is too steep to be worth it, so they put an absurd offer on the table. Certainly not the only explanation, but a very feasible one. For a long time there has been talk of the face saving that is likely to start at the end of things. I may be wrong, but if I am right, I would have loved to have seen the look on the faces of the rest of the red camp there when this was laid out.

Chris

PS Someone needs to get this info to Michael Bay ASAP. Would love to have him blog on this.

Originally Posted by Steverhcp02

Or how arrogant is of MSFT to demand such things with the state of HD DVD. Is it me or shouldn't they be a bit less demanding having the second place format out of two.

I trust max, love him and his info, but surely, MSFT cant be this stupid can they?

I mean, theyre basically asking these companies to tie themselves not only into a format with inferior sales, but into a medium that isnt even REALITY yet let alone prosperous or functional.......im sorry for doubting this, but it seems so asinine it cannot be true.

[MrBogey]

Out of curiousity...

Would this digital distribution that MS wants possibly be involved with AT&Ts IPTV platform, of which MS is the software vendor?

[Elandyll]

Originally Posted by Maxpower1987

Think about it for a second.

You are a major studio. Sales from digital distribution for movies is basically nil. MS come to you and say "hey we are part of the HD DVD group, we want you to release only on HD DVD and we'll give you loadsa cash, oh and you know those downloads that don't make you very much money, throw those in and we'll give you even more cash".

So MS get their exclusive studio for HD DVD and Live. WB get loads of instant cash, but scupper any chances of a single optical format.

It makes sense for MS to make this kind of deal, when revenue from Windows and Office starts to stutter they will make a massive push on their Live platform, and what better way to do it than say they have the Harry Potter series exclusive to download from it, only you'll need some MS IPTV style box or an Xbox 720, or something along those lines...

Something like .. the Zune ?

[gandley]

Originally Posted by Steverhcp02

But its not even a pebble yet, and if Max is accurate, MSFT is acting like we are in year 6 of HD DVD being the only format or something.

Bandwidth, monopoly, itunes, hard drive space, i mean this cant be for real is it, Max?

they dont want to get to year six, they want to get it going ASAP, starting in six years would put them well behind the game with itunes. There deal dosent stop a company from doing packaged media, its just insures there download service takes priorty for MS, thats there return on the deal.

they need the exclusives lined up 'now' so in six years they have a full exclusive service with little competition, its the way MS has always worked.

EDIT as max said above.

[blindcat87]

I don't think it matters if they think that downloads are the best thing since sliced bread and the ultimate source of income for a century to come. MS is asking major studios to tie contol over the distribution of their properties to a single company for who knows how long a period. Any studio exec that takes such an offer should be canned on the spot. Take that offer, and you might as well just hand them the rights to your catalog and get it over with.

Chris

Originally Posted by JadedRaverLA

Hopefully true. The problem would be if they see serious potential in downloads, and decide that since MS is likely to dominate that anyway, they might as well get on board.

They already encode their discs at the lowest possible bitrate, and using M$'s codec. It really wouldn't be that much of a stretch to decide to work with Microsoft on a download platform. After all, even if they have to share revenue with M$, they won't be sharing them with stores, and won't have any costs once the encode is done. M$ will handle everything for them. That could be tempting.

It really all comes down to whether they want a disc-based future or a download future. Hopefully, they realize that commercializing movie downloads is going to present some huge challenges and won't help ease the more immediate concern on declining DVD sales. Personally, I think Warner won't take M$'s bait... but they CAN be very convincing.



I couldn't agree more. There are some very deep pockets on the Blu-ray side, and if a matching check needs to be cut, it should be cut. This war has gone on longer than it ever should have, and we were all blindsided by the Paramount deal. Given that we're all familiar with M$'s business practices, a play like that should have been assumed, and assurances made to the neutral studios that certain big BDA partners (Sony Corp., Matsushita, etc) would be willing to match any offer for exclusivity from the other side.

At this point, if Sony or Panasonic need to offer well below cost disc pressing for the next year or two, or some other promotional offer to get Warner's exclusivity, then so be it. Everything needs to be on the table. I certainly hope that the TRUE big wigs from Japan are involved in the negotiations. We need people who can offer whatever it takes.

Anyway... my $.02.

[Steverhcp02]

Originally Posted by Maxpower1987

Think about it for a second.

You are a major studio. Sales from digital distribution for movies is basically nil. MS come to you and say "hey we are part of the HD DVD group, we want you to release only on HD DVD and we'll give you loadsa cash, oh and you know those downloads that don't make you very much money, throw those in and we'll give you even more cash".

So MS get their exclusive studio for HD DVD and Live. WB get loads of instant cash, but scupper any chances of a single optical format.

It makes sense for MS to make this kind of deal, when revenue from Windows and Office starts to stutter they will make a massive push on their Live platform, and what better way to do it than say they have the Harry Potter series exclusive to download from it, only you'll need some MS IPTV style box or an Xbox 720, or something along those lines...

Sure it makes sense from MSFT's perspective. But i would think, even though im just a normal consumer, it would take damn near 10 figures to make up the difference of a unified HDM to a jumbled split mess of disc medium and unknown digital distribution anytime soon. Surely MSFT isnt willing to buy WB for THAT much are they?.....wouldn't WB see the stalling of HDM (which is what would make them their money) to exclusively distribute through MSFT digitally when its not as if MSFT holds the only means to digital distribution.

[JadedRaverLA]

Originally Posted by gandley

well you think MS were investing in HDDVD for free? this was always there plan, and as penton said, now there really showing there colours as they will only continue investment if they get what they want in return.

Indeed. It really does seem as though Microsoft entered the format war to help them in the videogame/online services market. Knowing they were going to launch earlier than Sony and Nintendo, M$ was essentially forced to stick with DVDs as a disc medium. Thus, they really needed to stop Blu-ray from taking off, as success of Blu-ray would pretty much ensure that the PS3 would slaughter Microsoft's system again this generation.

So, they back HD DVD, trying to create a stalemate, and stealing a lot of the thunder Sony had leading into the PS3's launch. Suddenly, instead of Sony releasing the "everything and the kitchen sink" home entertainment device, they were realeasing "an overpriced video game system with an unnecesary and expensive optical drive that many people wouldn't want." (That's not my opinion, but the opinion that started to be expressed by many gamers.)

As always their strategy is brilliant... the question is "Will it work?"

[MrBogey]

Originally Posted by Steverhcp02

... when its not as if MSFT holds the only means to digital distribution.

Well, there are over 200-300k Americans already using Microsoft's IPTV platform. I'm curious if this could be tied in but I wouldn't know.

[Steverhcp02]

Originally Posted by gandley

they dont want to get to year six, they want to get it going ASAP, starting in six years would put them well behind the game with itunes. There deal dosent stop a company from doing packaged media, its just insures there download service takes priorty for MS, thats there return on the deal.

they need the exclusives lined up 'now' so in six years they have a full exclusive service with little competition, its the way MS has always worked.

EDIT as max said above.

the only way i see WB forgoing HDM to link themselves to HD DVD and MSFTs digital distribution is if they are content in skipping HDM and sticking with DVD's and going to digital distribution in 10 years. then, they can get money now, sink HDM, stick with DVD and just distribute digitally when the time comes.

[kapitalisten]

Originally Posted by Steverhcp02

But its not even a pebble yet, and if Max is accurate, MSFT is acting like we are in year 6 of HD DVD being the only format or something.

Bandwidth, monopoly, itunes, hard drive space, i mean this cant be for real is it, Max?

Well, considering that this is Microsoft we are talking about, I would not dismiss it so fast, I am afraid. Microsoft has one objective in mind, shareholder value (probably longterm), and once they realize that a given partnership is not going to maximize that in the optimal way, they discard that partnership, regardless of consequences.

Now, this is no new behavior from Microsoft, it has been going on for quite a few years now, so Toshiba must have either known the consequences of dealing with Microsoft and taken the chance that would be, or, and I do not think this is likely, simply have been naive and thought that Microsoft would not stab them in the back, if Microsoft saw a better deal.

If Toshiba, and other companies, were in fact so naive to believe Microsoft all the way, I would suggest that it is better that Toshiba goes bankrupt - Microsoft should be case-study in law-schools on the subject of partner-contracts. If you do not have an iron-clad contract with Microsoft, you are going to get cast away at some point, and if you actually come up with a contract that would positively protect you, you can be sure that Microsoft would most likely not sign that at all, since that would require them to consider somebody else than themselves - at all.

Sorry for the long post, and even in the insider-thread, but when you do deals with Microsoft you better make sure your contract is bulletproof, because if they find a loop-hole, and they will, they are surely going to use it to the fullest, regardless of any consequeces.

(First post from me, I have been lurking a few months, Blu-ray user when I got my PS3 (PS3 launch in Denmark in March 2007 )

[gandley]

well back along from an MS source there was talk of in time of making HDDVD take on some of the functions of xbox live in future players. Dismissed at the time, but the more you hear the more you could see how the two would intergrate.

lest not forget, HD DVD was already dead before MS entered the game and started spinning its partners (and pulling in universal). If anything toshiba was thrown a lifeline back then.

[Spankey]

Originally Posted by Maxpower1987

The first one.

MS have informed relevant parties that they will not be investing anymore in HD DVD unless digital distribution is included in any future deals.

Whoa! Big Whoa!

So MS does want to be a truly monopolistic company. I don't see how a media company would allow their content to be distributed on line by one company...

INSANE!

WB is looking better and better everyday. Safe to ask if Paramount entered into that kind of deal with their "transaction"?

[Spankey]

Originally Posted by Maxpower1987

And, no, it isn't safe. Sorry.

Didn't hurt to try...

[krinkle]

Originally Posted by Penton-Man

The only effect that I see it has had is that by forums such as AVS providing constant protectionism of rdjam and other high-profile red ants for months in the past (when they knew of his intentions and tactics) – it has totally turned off people in the business to those forums that provided such protectionism and tacit support…..as well as causing good members to flee that forum as refugees to places like this where they can enjoy their format of choice unhindered.

Do people forget all the troll-ism of rdjam in the Blu-ray software forum of AVS in the past, or his constant and I mean constant badgering of insiders such as paidgeek and talkstr8t for months that went unchecked by the moderators there before the *new rules* were instituted?

In the grand scheme of the outcome of the war, no, he/they haven’t made a difference……they’ve just been spinning their wheels. I’m sure before this thing is completely over there will be a few more rdjams popping up in places like HDD to continue the FUD.

P.S.
If rdjam truly wants to make a difference, I suggest he contribute $$ to a certain companies war chest or else co-finance their loan to allow for a corruption of a reasonable decision by WB…….as was done several months ago with another major.

Penton, rdjam has admitted that he knows a couple of the AVS moderators in real life, certainly this contributed to him having free reign at AVS for so long.

Also it goes a long way towards explaining why long time AVS members who were pro Blu-ray (like me) were banned, but he never was.

My ban actually expired on November 18th (6 months!) but I am never going back.

I spent quite a bit supporting the products of AVS affiliates and regardless they treated pro-Bluray members as second class citizens.

[gandley]

Originally Posted by Spankey

Didn't hurt to try...

though i expect MS is using the same format for there deals, heck it worked twice already

[Steverhcp02]

Hey Max.

Is this the first time MSFT has actually laid down their cards? Is this really like the "finally the truth comes out" type of thing it feels like, or has this been ongoing and a meeting finally took place.....

also, whats the perception around the office? Is this widely viewed as a possible benefit to HD DVD or a "boy its about time they said it" type of move?

Seems liek if this is the first coming out of the closet for MSFT they must really be backed into a corner because they really dont seem to have very good bargaining chip atm.

[dialog_gvf]

Originally Posted by Steverhcp02

Seems liek if this is the first coming out of the closet for MSFT they must really be backed into a corner because they really dont seem to have very good bargaining chip atm.

Besides that $50 billion stack of chips?