Samsung -- Not Toshiba -- Killed HD DVD

[TheRealBob]

This has already been posted in another thread, but I thought I'd pull the information into its own thread because I think it's a big story.

From CD Freaks (http://www.cdfreaks.com/news/CeBIT-S...t-Toshiba.html):

During our rounds at the CeBIT grounds we overheard a conversation of a Samsung employee telling someone else that his company pulled the plug on HD DVD and not Toshiba. Both companies are in a joint venture called TSST (Toshiba Samsung Storage Technologies). The joint venture is responsible for the production of optical drives for both Samsung and Toshiba and it seems that Samsung no longer wanted to invest in HD DVD production lines. Toshiba on the other hand didn’t want to drop the format and was ready to continue the high definition format war.

We are currently looking for more information regarding this subject and hope to give more information later.

Blu-ray.com Insider Maxpower1987 responded to that story in another thread on this site:

Originally Posted by Maxpower1987

On a side note this is a pretty good description of what actually happened, so those of you ranting at Samsung need to get a few things in perspective...

Very interesting...

[Dragonraine]

pretty interesting if true.

[xtop]

hmm..well that sheds a new light on things now doesn't it

[turboedguy]

thanks again Samsung.

[Anthony P]

Not to go against what Max said and what was overheard at CeBit, but TSST is owned 51% by Toshiba so even though Samsung could have put some pressure, they could not have stopped Toshiba if they really did not want to. In the end a meeting of the BOD happened the day of the announcement and that was what stopped it.

[scragham]

Originally Posted by Anthony P

Not to go against what Max said and what was overheard at CeBit, but TSST is owned 51% by Toshiba so even though Samsung could have put some pressure, they could not have stopped Toshiba if they really did not want to. In the end a meeting of the BOD happened the day of the announcement and that was what stopped it.

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...

[unreal1080p]

Originally Posted by TheRealBob

Samsung -- Not Toshiba -- Killed HD DVD http://www.cdfreaks.com/news/CeBIT-S...t-Toshiba.html

Blu-ray.com Insider Maxpower1987 responded to that story in another thread on this site:

Very interesting...

Goes to show you even the "Averell Dalton" of Blu-Ray (Samsung) has it's uses

Averell is the tall one with the Gun

Averell Dalton
Averell Dalton (Samsung) is the tallest, youngest and most stupid of the Daltons. Averell is obsessed with eating and keeps asking the question "When do we eat?", which serves to annoy Joe. Averell likes Rantanplan (HD DUD) a lot because they both enjoy eating and are of equal intelligence (if their level of stupidity can even be called intelligent). It's either Averell or Rantanplan who get beaten by Joe (SONY), when he is angry. Averell is good-natured and his stupidity can even be used to make him appear honest at times.

Joe Dalton
Joe Dalton (SONY) is the smallest, oldest and most intelligent of the brothers. As a choleric, he hates Lucky Luke (Microsoft) and the stupid dog Rantanplan (HD DUD).

Jack and William Dalton
Jack and William Dalton (Pioneer and Panasonic) are the middle brothers and have somewhat colourless personalities and are normally busy with calming Joe down to prevent him from attacking Averell, who, in contrast, is always being to told to shut up.

Rantanplan
Rantanplan (HD DUD) is the dog who is stupider than his own shadow. He usually just follows Lucky Luke (Microsoft) around and amuses the reader with his stupidity. On some occasions he jumps onto somebody (usually Joe Dalton or Lucky Luke) making them lose their guns and rendering them defenceless.
Usually he misses though.

P.S. This is Jolly Jumper (Lucky Luke's/Microsoft's Horse) -->



http://en.wikipedia.org/wiki/The_Dal...8Lucky_Luke%29

[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?

[TheRealBob]

Originally Posted by Anthony P

Not to go against what Max said and what was overheard at CeBit, but TSST is owned 51% by Toshiba so even though Samsung could have put some pressure, they could not have stopped Toshiba if they really did not want to. In the end a meeting of the BOD happened the day of the announcement and that was what stopped it.

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.

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.

If Toshiba intended to push on but Samsung's pressure caused them to decide at the Board of Directors meeting to throw in the towel, then I think the gist of the story is correct that we have Samsung to thank for an early end to a format war that some thought wouldn't be resolved until the holiday season this year.

[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.

[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.

[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).

[Uxi]

Originally Posted by turboedguy

thanks again Samsung.

[Anthony P]

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?

and we know your theory where Samsung is like GOD and all they had to do is say stop and Toshiba and TSST can only say OK.

Even if you are deluded enough to think the minority shareholders are the only ones with any say, can you explain to us how the first generation Toshiba drives did not use a TSST drive but for some reason now they have no choice but TSST drives and Samsung is the only one that can decide it because Toshiba absolutely had no intention to stop HD DVD.

[TheRealBob]

Originally Posted by Anthony P

and we know your theory where Samsung is like GOD and all they had to do is say stop and Toshiba and TSST can only say OK.

I never said anything like that.

Originally Posted by Anthony P

Even if you are deluded enough to think the minority shareholders are the only ones with any say,

I never said that either. I just said they have some say.

Originally Posted by Anthony P

can you explain to us how the first generation Toshiba drives did not use a TSST drive but for some reason now they have no choice but TSST drives

I never said that, either.

They obviously have a choice to use different drives, but as Maxpower1987 said above, it was apparently a prohibitively expensive choice.

Originally Posted by Anthony P

and Samsung is the only one that can decide it because Toshiba absolutely had no intention to stop HD DVD.

I also didn't say that.

While Toshiba by many accounts wanted to give it more time, they couldn't possibly have been so blind that they didn't see that unless there was a big turnaround they'd have to cut their losses at some point.

I also didn't say that Samsung was the only one who could decide. It just appears from what we're hearing that they decided they wanted out of HD DVD, and that suddenly made Toshiba's position much worse if they wanted to continue, so that ended up being the catalyst to Toshiba deciding to discontinue HD DVD before they had planned to consider doing so.

Despite finding this news interesting enough to highlight in this thread, the bottom line is I actually don't really care all that much who made the final decision to kill HD DVD, as long as someone did. I don't know why I've allowed myself to get pulled into this debate, so feel free to have the final word if you'd like.