Samsung -- Not Toshiba -- Killed HD DVD

[Anthony P]

well, admittedly having your 49% partner say, "screw you, you're not taking us down with you" can be a pretty big barrier to continuing on... especially if it means you have to buy your partner out...

why would it mean they need to be bought off? in the end when it is time for a vote and 51% votes one way and 49% votes the other which side wins? TSST could not stop Toshiba (if they really wanted to) to continue with HD DVD. I am not saying it could not help, just that it could not be as clear cut as portrayed in the article. Samsung could not force TSST to stop HD DVD and TSST could not stop Toshiba.

[scragham]

Originally Posted by Anthony P

why would it mean they need to be bought off? in the end when it is time for a vote and 51% votes one way and 49% votes the other which side wins? TSST could not stop Toshiba (if they really wanted to) to continue with HD DVD. I am not saying it could not help, just that it could not be as clear cut as portrayed in the article. Samsung could not force TSST to stop HD DVD and TSST could not stop Toshiba.

is that true in real life though?

if your 49% partner (who presumably you have hopes of maintaining civil relations with) tells you, "hell no", do you just go ahead and override them just because you own 2% more of the company?

[WickyWoo]

This is more like a final knife in the bleeding soon-to-be-corpse than the "reason they quit"

If this were putting the final nail in HD DVD period, as in no more PC drives, and no more burners, this I would find credible. If if gave some execs the final weapon they needed? Yes

But they were dead the second warner went, and everyone, including Toshiba knew it. It was simply a matter of how long it took them to die

Either way, they would have killed it in the summer when WB support ended. They can't survive losing 50% of their software sales

[Anthony P]

is that true in real life though?

most likely. This is what I know from the large multinational I used to work at that had several joint ventures with others.

1) "share holders": the company is run as an independent company (with it's own CEO) the only thing is that the share holders each have a representative vote similar to the BOD in an independent company.

2) "provider": the company is run almost like an independent company, but that company has one job only and that is to provide (To their respected %) to each of it's owners (this tends to be more in natural resource, where company A that owns 51% has access to 51% of the resources that come out and B 49%) the CEO ends up controlling how much is produced but everything produced is pre-bought by the companies that own shares.

3) the child: this usually happens in smaller joint ventures where one is a very big shareholder. The joint venture is run almost as a subsidiary of the major owner (with very little direct involvement from the minor owners). The minor owner just gets his share of the profits at the end of the day

in no time did the minor shareholder ever have more say then the major. The fact that it is 51-49 also makes it obvious that Toshiba would have more say, it is the only reason they would have invested just a bit more then Samsung.

The truth is even if one wants to assume that Samsung could have stopped TSST from making HD DVD drives, what would stop Toshiba from procuring them else where. Some (if not all) the first generation Toshiba HD DVD players used the NEC HD DVD drive.

So yes it is IMPOSSIBLE for Samsung (through TSST) to stop Toshiba from making HD DVD dries IF Toshiba really wanted to.

I am not saying it is impossible that Samsung helped with the decision (maybe because of TSST they had good contacts in Toshiba's BOD? maybe they and the CEO of TSST had enough strength to force a certain amount of profitability that Toshiba was not willing to pay......) just that if Toshiba was not willing to consider calling it quits to start off there is no way Samsung could have stopped them (if it was that easy they could have stopped Toshiba before the war started)

[Anthony P]

If Samsung was a major partner and was telling Toshiba that there was no way they'd go along with putting further resources into HD DVD, then it's not as simple as Toshiba saying they own 51% so Samsung will just have to do what they say.

that is just stupid. Why do you think Toshiba would own 51%, that tells me it was all about having more control.

That may be tantamount to saying that the head of Toshiba told his secretary to zero out the pending orders for HD DVD production, so the secretary is the one that stopped HD DVD.

not at all, the funny thing it is more or less the opposite you are assuming that the CEO decided to stop HD DVD because his secretary (less important partner in a unrelated joint venture) told him to stop it.

[TheRealBob]

Originally Posted by Anthony P

that is just stupid. Why do you think Toshiba would own 51%, that tells me it was all about having more control.

not at all, the funny thing it is more or less the opposite you are assuming that the CEO decided to stop HD DVD because his secretary (less important partner in a unrelated joint venture) told him to stop it.

Yes, I've read your theories about how 51% share means you are the total master and all the partners are total slaves. It's really just brilliant stuff. Perhaps you should become a dean of a business school?

In the current reality (before you revolutionize the world with your new view of how things should work), minority partners cannot just be smacked into line by majority partners. They get a say, or it isn't a partnership.

If Samsung decided every dollar spent on HD DVD was wasted money and they wanted no part of it, and they made that clear to Toshiba, now Toshiba has to decide if it's worth it to try to bully Samsung into doing what they want or breaking off their partnership with them, with all the messy buyouts and possible lawsuits that entails, to go it alone. If they decide that they can't take either of those steps and throw in the towel, I think it's reasonable to say that Samsung drove the final nail in the coffin.

WickyWoo says everyone knew it was over when Warner made the jump. Well, they should have known it was over, but apparently Toshiba didn't, and apparently (by some accounts) Paramount didn't. If Samsung gave them a reality check and avoided several more months of this nonsense, then good for them.

[Grubert]

Originally Posted by TheRealBob

Yes, I've read your theories about how 51% share means you are the total master and all the partners are total slaves. It's really just brilliant stuff. Perhaps you should become a dean of a business school?

In the current reality (before you revolutionize the world with your new view of how things should work), minority partners cannot just be smacked into line by majority partners. They get a say, or it isn't a partnership.

If Samsung decided every dollar spent on HD DVD was wasted money and they wanted no part of it, and they made that clear to Toshiba, now Toshiba has to decide if it's worth it to try to bully Samsung into doing what they want or breaking off their partnership with them, with all the messy buyouts and possible lawsuits that entails, to go it alone. If they decide that they can't take either of those steps and throw in the towel, I think it's reasonable to say that Samsung drove the final nail in the coffin.

WickyWoo says everyone knew it was over when Warner made the jump. Well, they should have known it was over, but apparently Toshiba didn't, and apparently (by some accounts) Paramount didn't. If Samsung gave them a reality check and avoided several more months of this nonsense, then good for them.

I agree. Toshiba could have put its foot down and say they weren't pushing things forward, but really what would the point be in alienating your main partner in the optical-drive business over an already clinically-dead format?

It's when it was said that Toshiba could sue Warner. They probably could, but the backlash would have been huge.

Or Universal had probably a legal right to release Jurassic Park on HD DVD.

[Maximus]

Originally Posted by TheRealBob

Yes, I've read your theories about how 51% share means you are the total master and all the partners are total slaves. It's really just brilliant stuff. Perhaps you should become a dean of a business school?

In the current reality (before you revolutionize the world with your new view of how things should work), minority partners cannot just be smacked into line by majority partners. They get a say, or it isn't a partnership.

If Samsung decided every dollar spent on HD DVD was wasted money and they wanted no part of it, and they made that clear to Toshiba, now Toshiba has to decide if it's worth it to try to bully Samsung into doing what they want or breaking off their partnership with them, with all the messy buyouts and possible lawsuits that entails, to go it alone. If they decide that they can't take either of those steps and throw in the towel, I think it's reasonable to say that Samsung drove the final nail in the coffin.

WickyWoo says everyone knew it was over when Warner made the jump. Well, they should have known it was over, but apparently Toshiba didn't, and apparently (by some accounts) Paramount didn't. If Samsung gave them a reality check and avoided several more months of this nonsense, then good for them.

Simply put, Samsung would rather have bought themselves the whole of TSST, or sold their 49% stake to someone else, than invest another penny in HD DVD. This is what they told Toshiba or told them that if they want to go ahead with HD DVD, then that would be fine but to do it outside of TSST (which is impractical).

[bigmf]

Originally Posted by scragham

is that true in real life though?

if your 49% partner (who presumably you have hopes of maintaining civil relations with) tells you, "hell no", do you just go ahead and override them just because you own 2% more of the company?

With the way that minority shareholder protection laws are in most countries, trampling the minority shareholder(s) like that will get you a quick trip to the defendant's table. We know that HDDVD was a money losing venture at that point and Toshiba would have to demonstrate otherwise in court to show that what they were doing was for the best of the company.