Toshiba believes in HDM's future (speculation)

[What'sHD]

Toshiba evidently believes that HDM has a lucrative future. I do not think that they are in the war to stall HDM and prepare for downloads. If they were, the Para bribe would not have been entirely out of their pockets.

I think their goal here is to:

Make hd-dvd survive until universal players are everywhere cheaply and then make royalties. The penetration will probably be less than what one format would have generated, but anyhoo.

OR

Irritate the BDA until they are offered a cut of royalties from BD. Toshiba seem highly unwilling to let go of the DVD IP gravy train, thus hd-dvd and this stupid war.

Either way, it is clear that Toshiba sees HDM as a growth industry and the alliance with MS is one of convenience and not based on principle or a consensus on the superiority of hd-dvd.

The solution, thus, for BDA, is to either agree to share royalties asap OR knock out all chances of universal players becoming cheap. They could BAN universal players (is it possible?) or end the war before they become cheap.



P.S. Thinking some more, if universal players become cheaply available, I dont understand why any studio would release on hd-dvd since the PS3 base would be left out. Or studios could release on both formats (unlikely). So, that means they would release on BD long-term, which means Toshiba has little hope of getting a lot of royalty $ since most $ are made on disc royalties and their players are dirt cheap already anyways...

So that means Toshiba is in it hoping for share of royalties and is willing to throw good money in bribes in the hope that they will make it back. Cos, I really do not see where they see themselves making money if hd-dvd survives since BD and PS3 are here to stay.

[Anthony P]

If they were, the Para bribe would not have been entirely out of their pockets.

how do you know that for a fact? (just curious)

Irritate the BDA until they are offered a cut of royalties from BD. Toshiba seem highly unwilling to let go of the DVD IP gravy train, thus hd-dvd and this stupid war.

didn't that happen in 2005? When Sony and Panasonic tried to talk them out of the insanity of a format war?

P.S. Thinking some more, if universal players become cheaply available, I dont understand why any studio would release on hd-dvd since the PS3 base would be left out.

exactly

[WickyWoo]

If they were, the Para bribe would not have been entirely out of their pockets.

I assure you it wasn't. Ever hear the term "money laundering"? You write a check to company X that passes it to company Y, who then gifts it to company Z who then performs the payoff

There are many ways this can be accomplished, but the end result is the same

didn't that happen in 2005? When Sony and Panasonic tried to talk them out of the insanity of a format war?

Yes indeed. Microsoft apparently derailed the talks with the old "we already gave you so much money" scenario.

[Anthony P]

I assure you it wasn't. Ever hear the term "money laundering"? You write a check to company X that passes it to company Y, who then gifts it to company Z who then performs the payoff

There are many ways this can be accomplished, but the end result is the same

money passing hands is one thing, but the reality is that we don't know what incentives and who gave them to them. My assumption since the news broke was that it was a bit of a potluck. You know MS giving them some incentives (like free VC-1 and HDi), Toshiba some others ......

All we have are three official statements and one unofficial (as far as I know)

1) Paramount (official): no money or incentives
2) Paramount (unofficial): 50M for Paramount and 100M$ for Dreamworks
3) MS (official): we did not give 150M$
4)Toshiba (official): we gave some money and incentives but it was less then 150M

[What'sHD]

"P.S. Thinking some more, if universal players become cheaply available, I dont understand why any studio would release on hd-dvd since the PS3 base would be left out."

exactly

My confusion is where does it end up if both formats survive? Say, by 2009, hd dvd has a million players in homes and BD has about the same plus however many PS3s.

So, if I am a studio:

1. Release on both formats - awful awful choice

2. Release only on BD - would leave out a million hd dvd players. If they are willing to abandon so many adopters, why not do the abandoning now and go with BD Only?

3. Release only on hd dvd - This makes no business sense cos of PS3... but its the 3rd possibility

So, studios go choice 1, which sucks if you are a studio... OR

choice 2/3, which means studios are willing to abandon either format's early adopters who have standalone single-format players. If so, they should do that Right Now instead of waiting for larger nos. of pissed off people.

TotalHD discs notwithstanding, I dont see any sense to this fiasco (not that I want those abominations. BD50s please, thank you)

[What'sHD]

Originally Posted by Anthony P

how do you know that for a fact? (just curious)

I dont technically. Based off of public comments, Toshiba seems to have spent solid cash while MS probably provided in-kind services. At this stage, cash is the bigger contribution, Imo, since MS knows its HDM IP is going to rot unless they get it into products. And since no one really wants their IP desperately, given the alternatives, they are giving it away for free. But, to Para, they can pitch it as "incentives".

Originally Posted by Anthony P

didn't that happen in 2005? When Sony and Panasonic tried to talk them out of the insanity of a format war?

Yup.

I think at this stage of the war, Toshiba's tactics are meant to be more irritants than effective counters to BD strategies. They know they cant win. They know co-existence of formats is possible but not what studios would want.

They know BDA and esp. Sony has a lot of money riding on BD, so perhaps they figure that with the proper irritation, they might get BD to cut them a share of royalties in exchange for walking away from the war. I really think this makes the most sense.

If I was in charge of HDM at toshiba, what would I be thinking? How to make the best of a bad situation... which leads to the kind of intentions I described.

Only speculation, of course

[WickyWoo]

My confusion is where does it end up if both formats survive? Say, by 2009, hd dvd has a million players in homes and BD has about the same plus however many PS3s.

It won't.

Either one thrives, or mainstream retailers will dump it to become another Laserdisc

At this stage, cash is the bigger contribution, Imo, since MS knows its HDM IP is going to rot unless they get it into products. And since no one really wants their IP desperately, given the alternatives, they are giving it away for free. But, to Para, they can pitch it as "incentives".

MS's IP will end up in the mediums for which it was obviously designed in the first place: Cable and web based VOD systems. Toshiba's next round of Cell powered TVs are almost certainly based on it.

[What'sHD]

Originally Posted by WickyWoo

It won't.

Either one thrives, or mainstream retailers will dump it to become another Laserdisc



MS's IP will end up in the mediums for which it was obviously designed in the first place: Cable and web based VOD systems. Toshiba's next round of Cell powered TVs are almost certainly based on it.

Re first point, I would be massively disappointed. This is no way to treat the finest thing to happen to HT bar none.

Addendum: Not only is this is the finest thing for HT ever, it is also plausibly, the finest thing one can imagine in the 5 year timeframe. In fact, short of 3D holo-decks, I do not really want anything more
than 1080p, 7.1 lossless movies... bliss is an understatement.


Re 2nd point, I always thought cable was going over to Java for interactivity... not true?

VC1 will prob be a good codec given its lower processing reqs. But I see some things working against VC1 even then though:

1. Mpeg2 is going to be free soon, at least by the time downloads becomes mass market for movies (say 2010+). I suspect this was part of the reason BD was designed with mpeg2 in mind... no codec royalties and no need to learn a new workflow.

2. Storage costs of vc1 vs. mpeg2 are at best a 1:2 ratio, which will be negligible, by 2010, in real terms for watch and delete drm-ed d/l movies.

3. By 2010, h.264 decoding chips are unlikely to be more expensive than VC1 decoders. Esp. given how much h/w support is mushrooming for h.264 already. Imo, corps are unlikely to make VC1 only decoders since with a minimal extra cost, it can also do h.264. They should design for the bigger, all-codecs-inclusive market.

[What'sHD]

My final rant.

Re toshiba, the company is in a position of being roundly reviled for years by enthusiasts if they ruin HDM adoption via bribing fickle corps such as Para. I understand that the bribe was a desperation move, but any more of such shenanigans and I think they will smear their name for good, at least in my book.

I understand that the people in charge of HDM strategies at MS and T have bosses to answer to and perhaps, the boss' demands are unrealistic. But, the attitude of "If I cant win, no one will..." is abysmal.

[WickyWoo]

Re 2nd point, I always thought cable was going over to Java for interactivity... not true?

It's true, but there's no reason to think MS won't be pushing a total package deal.

1. Mpeg2 is going to be free soon, at least by the time downloads becomes mass market for movies (say 2010+). I suspect this was part of the reason BD was designed with mpeg2 in mind... no codec royalties and no need to learn a new workflow.

MPEG-2 is also huge in good quality. That's why all the cable systems are moving from MPEG-1 to MPEG-4 for digital cable. BD was designed with MPEG-2 in mind simply because it was a known technology with existing tools.

2. Storage costs of vc1 vs. mpeg2 are at best a 1:2 ratio, which will be negligible, by 2010, in real terms for watch and delete drm-ed d/l movies.

The problem is not the HDs at the server end, it's stuffing it through the pipe.

[Anthony P]

Re toshiba, the company is in a position of being roundly reviled for years by enthusiasts if they ruin HDM adoption via bribing fickle corps such as Para.

doubt it, look at DVD-A and SACD does anyone hate the companies that brought them or all the tactics they used? Most people will just be disappointed and annoyed and look for the next "best thing" to come along. And honestly that is the way it should be. I am not saying everything should be forgotten or forgiven. Let's say in 10 years there are two new competing formats trying to compete for the future market, and this time Toshiba is pushing the best one, do you want to be like the insane HD DVD fanboys that hate BD because it is supported by Sony and they hate Sony?

[What'sHD]

^^ Fair enough. I think I am assuming other feel the way I do about HDM.

For me, sitting down and really listening to MC, hi-fidelity audio was not very attractive, so I did not mourn when the SACD fiasco happened. But 1080p movies with 7.1 are a big deal to me, in a way that nothing else in technology comes close to (except perhaps 1080p games with 7.1 ).

Blast and curse anyone who ruins mass adoption or even worse, causes HDM to stop altogether cos I dont have any other (affordable) way of getting 1080P + 7.1 in the here and now.