Paramount's Switch Failed To Turn Market

[marzetta7]

Sweet article. And yes, the obvious is that HD DVD is a failure. But denial is a strange thing, blinding the obvious to the HD DVD sheep.

[reider]

Originally Posted by JohnGalt

... I can't imagine those costs being over a few bucks per disc in volume whereas I can see the prorated fixed costs being nearly equal to the price of a disc for low-volume titles today...

You are mostly correct on both accounts. It's just while the prorated fixed cost of the disk production decline with increased volume (as you pointed out ), the prorated cost of overproduction actually grows because unused inventory is not a fixed cost but a non-linear function of its volume and the amount of different titles. So a neutral studio will have twice the amount of titles then if it was an exclusive studio, thus much higher the resulting value of said function. At low volume all this is much less apparent due to very high prorated fixed cost (again, just as you pointed out ), but higher the volume - more visible it becomes and therefore "bites".

[Marcusarilius]

Great Article with amazing facts from an indipendant source. I don't see any way the HD DVD camp or Microshibamount can argue or spin the numbers of the failed sales expectations of Paramount's top titles. BD is still holding a 70% advantage all the while.

[xwingsct]

I was just finished reading the News section on this site.
I couldn't believe how many mistake WB made with their disc. Messed up disc
blu-ray and HD-DVD, Missing disc.
They really need to get their act together and concentrate on one format.
It seems like it happen alot on the Bluray side. Sometimes it made me wonder if they have Pro HD-DVD employees working for them.

[darinp2]

Originally Posted by Crackbone

I am sure that percentage is world wide sales.

I doubt that. My guess is somebody got confused between Transformers week and Black Friday week. I'm trying to think of the last article I've read related to this war that didn't contain some kind of error. Reporters just don't seem to know nearly as much about this subject as some enthusiasts.

--Darin

[Crackbone]

Ah, there's that phrase again, "format clarity".

Let's see the HD DVD guys spin a Warner move to HD DVD or Warner remaining neutral as "format clarity". 3:3 in studios , etc, ad nauseum.

This is the second or third time I've read something about the picture becoming clearer in 2008.

In no way does a move toward HD DVD by Warner provide more clarity in this format war, but I am sure the spin is about to begin.

[maximiza]

There will be no peace until Kirk is on Blu.

[Kirsty_Mc]

Paramount did not turn the market... Just Stomachs

[Spankey]

Interesting articles coming out now. With profile 1.1, the PS3 is being seen as a full fledged BD player. The sales numbers are now complete for a year. The Paramount bribe did not change things. Blu has momentum. Where is the excitement towards HD-DVD?

[Kirsty_Mc]

Originally Posted by Spankey

Interesting articles coming out now. With profile 1.1, the PS3 is being seen as a full fledged BD player. The sales numbers are now complete for a year. The Paramount bribe did not change things. Blu has momentum. Where is the excitement towards HD-DVD?

My Emphasis

Probably nostalgia value. HD-DVD is a dead format (though they won't yet admit it).

[dobyblue]

Yup, Paramount's move was the dumbest single corporate decision of 2007 and it did nothing at all but show that they chose the wrong path.

[MatrixS2000]

Originally Posted by Crackbone

In no way does a move toward HD DVD by Warner provide more clarity in this format war

+1 - it will do the exact opposite - muddy the waters further.

[sj001]

Warner probably has solidified their decision to go Blu even more after the results of Bourne week.

[Esox50]

Been saying it since 1998, when Paramount joined the DVD party a year late: Paramount is a follower and not a leader. They seem to be very risk averse when it comes to home video, as evidenced by the lack of releases on both formats and usually coming late to the party.

The one time they try to be a "leader" and provide "clarity" (the latter in Alan Bell's own words), they make the completely wrong strategic decision (though I'm sure it was financially very sound). Par for the course for Paramount.

While they are a major studio, their are 2nd tier among the majors even though they happen to have a lot of great movies. They should either step up their HDM releases, or piss off until this thing is over and then come back to the winning side (i.e. be late to the party...AGAIN).

[jason_grumpy]

Originally Posted by dobyblue

Yup, Paramount's move was the dumbest single corporate decision of 2007 and it did nothing at all but show that they chose the wrong path.

I wouldn't be surprised if their decision makes headlines as one of the top 10 corporate blunders of 2007 in business magazines.

[invictus]

Their decision wasn't designed to switch the market. It was designed to prolong the war, not end it.

[Esox50]

Originally Posted by invictus

Their decision wasn't designed to switch the market. It was designed to prolong the war, not end it.

Alan Bell specifically stated (though I guess it could be hard to believe anything the man says) in an interview in WSR that Paramount also hoped their move would provide clarity in the format war, and that other studios would follow suit.

[invictus]

They were paid to switch. Any reason given beyond the money is suspect.

I once owned a house that I din't want to sell. I loved it. Someone came along and offered me a huge sum. I sold the house. When I was asked why I sold by friends and family who knew I loved the place I told them for the money. I had no reason to spin something to people I cared about. Here in lies the difference.

[Neo65]

Originally Posted by Esox50

Alan Bell specifically stated (though I guess it could be hard to believe anything the man says) in an interview in WSR that Paramount also hoped their move would provide clarity in the format war, and that other studios would follow suit.

By now, it's pretty much conclusive what was the reason for the switch, it had nothing to do with clarity, even Paramount and Viacom for however highly they think of themselves don't believe that line for a second.

Paramount's parent is VIA-B (Viacom). WB's is TWX (Time Warner). It's always the parents who are behind all these decisions. The word is that even fairly senior executives in paramount did not know that was cooking in VIA-B until very late in the game.

Expectation is that only the C-levels and perhaps one level below that actually had an idea what is going on. Or what is about to occur. (Or so the rumor goes).

[BLU_BOY02]

2008 will be BLU!!! DIE HD DVD! DIE!!!!