Paramount’s HD DVD payola is anti-consumer

“According to the New York Times, HD DVD promoters are paying $150 million to Paramount/Dreamworks to pay for Paramount dropping its support of Blu-ray while retaining support of HD DVD,” Robert Smith reports for TVPredictions.

“Two years ago, Paramount announced that they would support both HD DVD and Blu-ray in the HDTV disc format war. Blu-ray has been selling two-to-one over HD DVD this year, and this includes Paramount titles,” Smith reports.

“Within the market for HDTV disc players, consumers have to be warned that they cannot depend on anything. I am advising all of my friends and associates to be wary of both formats now, and especially of the apparent commitments made by studios,” Smith reports.

“This decision of Paramount has seriously destabilized the already tenuous HDTV disc market and left customers in a greater state of uncertainty and mistrust that they were before,” Smith reports.

Full article here.

[Thanks to MacDailyNews Reader “Giuseppe S.” for the heads up.]

52 Comments

  1. It would be illegal, except the lawyers and lawmakers take the money.

    A good guide is to research unleaded vs lean burn. Lean burn reduced emissions by 10% and consumption by 11% all for $50 on the auto. Unleaded increased fuel consumption by 11% and the cost of an auto by $400. With the auto and oil industries behind it which won?

    US, UK et al are trying to sell intellectual property as the governing factor so that where it’s made doesn’t matter just who thought of it first. The morons in charge haven’t figured for this:

  2. both sides were greedy. they should have learned the lesson from the video cassette fiasco. neither hd format should have been released until they worked out a compromise. now both formats are going to fail, and the early adopters are going to pay the price.

    i will not be buying an hd player… ever.

  3. The era of content being delivered by a disc medium is nearing a close. You can get so much content online, increasing every day, that soon the concept of going to Block Buster or even buying content embedded into some form of media will seem like buying and 8 track. Bu-Bye HD and Blue Ray,you cannot compete will instant delivery, especially with today’s gas prices.

  4. Microsoft is tightly coupled with HD-DVD and wants it to win, so they are paying off Paramount/Dreamworks. Typical Microsoft.

    Microsoft —
    Your Frustration, Our Fault.
    “We’re the IBM of the new millenium.”

  5. This is so typical of M$. They stink from top to bottom. Monopoly without quality. They must be defeated.

    Roger said it very well above.

    Microsoft —
    Your Frustration, Our Fault.
    “We’re the IBM of the new millennium.”

  6. There is so much junk, misinformation, uninformed opinions, etc. in here… it’s really sad.

    Some things surrounding this news story I’ve found interesting is:
    – yes, of course it’s legal to offer incentives in this manner. It’s business, people. (There is at least one article I’ve found online putting this concern to rest. If it really bothers you, you can find it).
    – Paramount had been producing both formats for some time now. Who better informed and experienced about working with both formats than them and Warner? If you do a little searching on the ‘net, you will also find the many practical reasons that accompanied Paramount/Dreamworks’ decision to go exclusive with HD DVD. (For example, the standard requirements for EVERY HD DVD player have been set in stone from day one. However, Blu-ray has been a moving target as far as what the players will support – concerning audio codecs, BD-J functionality, online support, etc.) Also, the players are cheaper and therefore more consumer and, according to Dreamworks, “family friendly.” So… point is, it’s not $150 million alone that helped them make this decision (let’s give the companies a bit more credit).
    – Having both formats duke it out like this has been beneficial to the consumer. Yes, your average consumer (lay person) who isn’t an audiophile/videophile may get confused by the “war.” All they need is a good friend in their network that is better informed, and trustworthy, to give them the strengths and weaknesses of both sides (and not trust a store salesman… some of them are more misinformed than the average consumer). In the meantime, this war is driving prices down, creating incentives for consumers to jump aboard with Hi-Def, and generating so much discussion about the formats that it is automatically informing some of the public about the difference btw DVD and the Hi-Def formats.
    – Good strategy in anything will not be appreciated by those who stand to lose something as a result.
    – Blu-ray only supporters seem extremely defensive.
    – Both format supporters seem, more often than not, to enjoy their HD DVD players/discs more than their Blu-ray players/discs.
    – And one thing I thought was cute in a news story I read. Can’t quote exactly, but the main point was that Blu-ray had more storage capacity enabling them to carry more special features with their movies. I found that pretty ironic when you look at the same discs offered for both formats differing widely concerning special features… but it is the HD DVD discs that are carrying more special features, not the Blu-ray ones. (Ex: Blood Diamond, 300, MI:3)

    Thanks if you read all that. =)

  7. I think both will fail, but not anytime soon!
    Both parties have put way to much money down to just let go. That money on the development of tech for Laser-head,
    read-write & the way that data is stored.. there are 3rd parties that have extended the tech of writing data 3 or 4-fold to a standard DVD. The real media of the future though is Flash-media, has of now the capacity per Gb is to expensive & not enough money or companies coming together on this development. The other problem would be even if it did appear in 2y’s the Flash-driver would also have to except old CD’s & DVD’s? The advantage is that no matter what media is written to it, will be playable on any Flash-drive, only codec’s would need updating.

  8. I’m sure I read that Intel is under investigation in Europe for doing exactly the same thing with computer manufacturers.

    And yet, because they are now Apple’s partners, we say nothing about that situation.

  9. You said, “There is so much junk, misinformation, uninformed opinions, etc. in here… it’s really sad”

    How very true. I just think this: Anything that Microsoft associates it self with to a high degree, . . . . must be bad. If Microsoft wants HD-DVD, then there is a reason, and we should consider running the other way. . . . . ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Just a thought. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    en

  10. I suggest you go and read the entire article (rather than the responses here) for a truer picture about what Paramount’s decision actually means for consumers.

    Not that any of it should come as a surprise, as these companies are all in the “entertainment industry.” The only industry where treating your customers as thieves is just SOP.

  11. We can only hope HD-DVD wins or we’ll face even fiercer DRM than is already on the table. Blu-Ray is the true anti-consumer product. Yay for BD+ ” width=”19″ height=”19″ alt=”hmmm” style=”border:0;” />

  12. @GiveMeABreak,

    The difference is that it’s mostly Microsoft that is shelling out the dough to make the pay-offs, and Sony doesn’t own 90% of the planet – MS does.

    Do you really want MS infaltrating even more of the planet with more half-way-done product? Isn’t Windows and MS Server solutions enough? Blu-ray holds more, it’s no contest, technologically. I’ve heard rumors that HDDVD’s are featuring more extra content, but that’s just a rumor, and it still doesn’t make HDDVD a better technology.

  13. Good point. So, I went and read the “TVPredictions.com” article.

    As soon as I realized the link went to that site, I knew automatically what to expect. I have been keeping tabs on many news stories for many months that have “HD DVD” in them, thanks to Google’s email alerts. Whenever I read a story from TVPredictions.com, the site seems extremely biased in favor of the Blu-ray camp. As my previous post noted: Blu-ray supporters are very defensive, which makes their articles, comments, blogs, etc. full of overly harsh criticism, name calling, and over-exaggerated conclusions based on less than all the facts.

    There is definitely lots of propoganda out there. And, well, the Blu-ray camp seems to be doing their best at lobbying against Paramount and Dreamworks for making a well-informed, well-reasoned, and overall smart business decision.

    My assumption is that anyone shedding their portfolio of Paramount and/or Dreamworks stock as a result of recent events will not be motivated by rational and astute business sense, but rather an emotional response due to their ties to, or favor of, Blu-ray. The smart investor, in my humble opinion, would see a company that has made a smart, reasoned, business decision based on plenty of research and forethought. This was not some knee-jerk reaction. Smart investors know that you don’t jump in when something looks hot at the moment with no promise of future performance… but you jump in when you believe that something is better, more stable, and has much more promise (in your estimation based on facts) of performing well in the future. If anyone looks into the other reasons (beyond just $150m) that Paramount/Dreamworks made this decision, I believe they will find their decision to be in line with the above reasoning.

    The person with confidence of the strength of their position has no fear revealing the good points of the competition; to discuss and educate on what the counter perspective is.
    It seems to me that Michael Bay’s 3 friends that support Blu-ray did not have such confidence, or simply had never given HD DVD a try, or are less than fully informed about the strengths and weaknesses of both formats. They threw him a line and he bought it, leading him to make a hasty post online about being open to doing Transformers 2. The next day he posted again. This time to confess he had been duped by his frenzied Blu-ray supporting friends, and after looking at 300 on HD DVD, he said “It rocks!” And then he commented that he would definitely be open to doing Transformers 2. He had taken some time to find out why Paramount and Dreamworks made the decision they did. Rather than continuing to be defensive, he actually gave the studios the benefit of the doubt and let them speak.

    This is exactly why I recommend that people consult a “techy” friend they trust that will give them the truth (as far as they know) about both sides.

    I admit to my friends the strengths that Blu-ray has, and correct them when they undermine the truth of the Blu-ray format (for example, people still think that Blu-ray discs all use MPEG2 as their compression codec, and that it would be substandard to do so. The reality is, some discs do still come out with the codec but it is not the only codec used, and some reviewers with better equipment than myself have stated that an MPEG2 Blu-ray transfer looked the same as the VC-1 HD DVD counterpart.)

    I believe Paramount and Dreamworks decision is in the consumers (as a whole and not just a segment of Blu-ray consumers) best interest. I believe them when they say that they believe the HD DVD format to be more family friendly due to the price point of players, and better for business due to the lower cost of manufacturing (which can then be passed on to the consumer – if they chose to do so). I know the Blu-ray camp says that the price difference has lessened recently, and that’s true. But HD DVD players are still cheaper, and you get more functionality for your money with the promise of studios putting more and better features on their discs because they know that all players (since inception of the format) will be able to play any and all features they put on a disc. As long as that player carries the “HD DVD” official logo (sorry LG), it will be able to play it all. Blu-ray simply cannot make the same statement.

    For me, I was just glad to see a studio make a decision to go exclusive with a format for reasons that WERE consumer friendly (lower cost, better features, easier production), rather than being motivated by better DRM to protect their intellectual property. I say “way to go Paramount and Dreamworks!”

  14. To the long comment above: Thanks for the really long advertisment for MS. Whether you like it or not, that’s the objective truth. MS has and is willing to continue to pay big bucks to keep their codecs prolific around the globe so that they can ultimately do what they’ve always, done, get us all hooked on their inner workings then screw us – at least those of us that don’t use Windows.

    For being so amazing objective it’s amazing how subjectively your post is written. And your conclusion?
    – “…lower cost…” – Less capacity lower cost, how does that make it a better technology for the end user? And over time I don’t believe that BR will cost any more than HDDVD.

    – “…better features…” – I don’t see how that has been demonstrated in the article, and again, I think you would hard pressed to prove that has anything to do with the core technology, it’s what the developer brings to the table, the disk isn’t a limiting factor at all.

    – “…easier production…” – Again, not a limitation of of the disk technology, not to mention that, along with your first point – “…lower cost…”, this has been the mantra of every MS sales rep. since the beginning of time – “Don’t use Macs…, Don’t use Apple…, Don’t use Unix…, Don’t use anything that isn’t MS because it’s gonna cost more…” Conveniently leaving out the truth which is that it’s not more expensive, if you do your own homework, and running MS products of any kind at any level always and without exception costs more to actually operate – period.

    The DRM thing – again please put your ducks in a row – it’s not the disk technology, it’s the developer.

    BR is clearly the way to go to get the best value per GB for the end user – period. Arguments about DRM and lower costs are nothing short of misdirection on the part of MS and it’s partners – and you can, and will, go to the bank on that.

  15. Hi Mr. Peabody,

    HD DVD isn’t backed exclusively by Microsoft. They are simply one of it’s supporters (along with Intel). Supporting HD DVD doesn’t equal support for Microsoft… it just means that a supporter of HD DVD has something in common with Microsoft: support for HD DVD. That’s all. =)

    The NY Times article that released the information about a $150 million payment/incentive to Paramount and Dreamworks also stated “Microsoft, who most prominently supports HD DVD has stated that they have not paid either company, but wouldn’t rule out the use of that tactic in the future.”

    Microsoft wasn’t even involved in the decision, and has only commented on it when asked, stating they didn’t pay Paramount or Dreamworks any money, but wouldn’t rule out the use of that tactic in the future.

    I don’t rally support for Microsoft. But I do support HD DVD, and do believe it to be the superior format for many reasons that I am convinced are valid and logical.

    Just because I’m convinced doesn’t mean I’m not wrong. I’ve been wrong many times on various matters, and I’m not ashamed to acknowledge it. (I think we are worse off… more diluted… if we believe we’re always right even when we’ve been proven wrong). I just don’t see evidence that I am wrong.

    I don’t believe that higher sales figures means one format is better than another. All we can reasonably conclude from sales figures is that one sold more than another. The reasons for that are varied and multiple. But one thing we can’t conclude is that higher sales equals better format. One only needs an intro philosophy class (with a good teacher) to see the logical fallacies abundant in that argument.

    I think that Toshiba, Microsoft, Intel, Universal, Paramount, Dreamworks, Warner, and any other company that supports HD DVD and sees the advantages this format brings to the consumer are in the right.

    I believe that Blu-ray has some real promise… but I believe the only real strength Blu-ray as a whole has is a good propaganda and marketing machine. That to me is the biggest thing going for Blu-ray. To me, that doesn’t make the format itself better.

    The DRM specs are specific to the formats, but you are right (at least I think) that the use of the available DRM on a disc is up to the discretion of the studio producing the disc.

    The reason I believe that Fox and MGM’s decision to stick with Blu-ray was motivated by the second available layer of DRM, is because I honestly see no other reason. The extra 20gb of space available on a dual-layer Blu-ray disc as opposed to an HD DVD dual-layer disc doesn’t seem to be proving itself to be that much of an advantage. It seemed like it early on… but then you see dual disc releases coming out on both formats. I don’t see the extra 20gb making Blu-ray discs any better than the HD DVD counterpart. (If anyone has a good example of where the 20gb DOES in fact make a Blu-ray disc better than the HD DVD counterpart, I really would be interested in knowing about it. Please post).

    I know I’m posting on “Macdailynews.com,” but my argument that HD DVD is a better Hi-Def disc format said nothing about whether PCs are better than Macs. My argument isn’t about computers or computer companies. It’s about Hi-Def disc formats. Of which, I believe HD DVD has actually proven itself thus far to be the better format. (Not the one with the most available movies, or studio support, or marketing, or propaganda, or storage space… but the best OVERALL format for the producers of it, and consumers who buy and enjoy it).

    Thanks for reading my post.

  16. To put a fine on point on it, wittingly or not, you are in fact supporting a technology that Microsoft has, also in fact, provided much if not all of the technology for – directly. VC-1, for instance, is in point of fact a Microsoft invented, trade marked, and marketed technology. To try and distance your stand from any support of MS is nothing less than kidding yourself, assuming your doing it unwittingly.

    MS already has a track record of doing this in audio and media with so-called WAV and WMA. When I came to work for the media production group that I work for now, it took me the better part of a year to de-program several of the production crew members who, bless their hearts, were adamant that WAV was some sort of default ISO standard – it isn’t, and has only recently begrudgingly been recognized as any kind of actual format by the ISO, and that, not because of any great addition to existing non-platform, non-manufacturer specific, already well established and truely universal standards, but because there’s just so many installations of Windows. To sharpen that edge a bit more many of the same good folks that I work with actually thought that “aif” stood for Apple Interchange Format. Not surprisingly a MS rep. had swept through the company about two month before I got here. It took a couple of years to undo the endless misconceptions that were left in his wake. And this isn’t the first production organization I’ve worked for where this exact tactic was played by MS and its partners.

    What we see as a format war is nothing short of MS trying to gain complete control over the fundamental playback engine that could potentially be used by all movie watching homes on Planet Earth. Do you honestly think that MS would willingly divide that market up if they don’t have to? I honestly know that they won’t, if they can help it.

    To say that MS is simply another supporter only demonstrates one of two possibilities: 1) You don’t understand half as much as you would have us believe, specifically about HDDVD; 2) You are in fact well informed of the real issues at hand, and are simply making yourself guilty of the very things you seem to dislike about Blu-ray supporters.

    By the way, you’re welcome, and thanks for reading my post.

  17. Some FYI on VC-1:

    Just some info I found easily on the ‘net:

    “Although widely considered to be Microsoft’s product, there are actually 15 companies in the VC-1 patent pool (as of August 17, 2006). As an SMPTE standard, VC-1 is open to implementation by anyone, although implementers are hypothetically required to pay licensing fees to the MPEG LA, LLC licensing body or directly to its members, who claim to hold essential patents on the format (since it is a non-exclusive licensing body).[1]

    Both HD DVD and Blu-ray Disc have adopted VC-1 as a mandatory video standard, meaning their video playback devices will be capable of decoding and playing video-content compressed using VC-1.”

    Above quote found at: http://en.wikipedia.org/wiki/VC-1

    “The VC-1 essential patent holders currently include DAEWOO Electronics Corporation, France Telecom, societe anonyme, Fujitsu Limited, Koninklijke Philips Electronics N.V., LG Electronics Inc., Matsushita Electric Industrial Co., Ltd. (Panasonic), Mitsubishi Electric Corporation, Microsoft Corporation, Nippon Telegraph and Telephone Corporation (NTT), Samsung Electronics Co., Ltd., Sharp Corporation, Sony Corporation, Telenor ASA, Toshiba Corporation, and Victor Company of Japan, Limited (JVC).”

    Above quote found at: http://www.tmcnet.com/usubmit/2006/08/17/1812679.htm

    Personally, I don’t hate any companies. I find that so many people limit themselves to so much potential enjoyment and fun by taking a strong stand against a non-biological entity (such as a corporation). If Blu-ray contained the standards and offerings that HD DVD now does, AND had 20gb more space… (and maybe also was a bit less expensive) then I would be saying Blu-ray is superior. But that’s just not the case.

    I don’t have anything vested in either of the camps. I don’t stand to lose anything based on who “wins the war.” If Blu-ray becomes the industry standard and no more HD DVDs are produced, my HD DVDs will still work. My HD DVD player did not cost me much in the first place. So, I will not have lost anything. I’m just honestly stating that, from my viewpoint as a consumer, I think HD DVD is offering a lot more to consumers (as a format), and I’m not ashamed to say so. I don’t mind if people want to label me as a “Microsoft supporter,” or some covert MS spy that’s seeking to dupe the general public with misinformation. If that’s the cost of me being honest about what I believe the better High-Def format is, that’s a price I’m more than willing to pay.

    =)

  18. One last shot across the bow, Aye, I see matey… You guys have to be trolls, I am just so familiar with that Microsoft minion tone of voice.

    Yes VC-1 is one of the three primary formats (perhaps the only three), that Blu-ray authoring officially supports, but MPEG4 (alias h.264) is the preffered format, and so far seems to be the most common among commercially released disks.

    Now to my real point – I think it is very funny watching nay-sayers of Blu-ray try and distance themselves from MS. The post immediately prior to this one starts with a quote that would have us believe that MS is simply one of many, and nothing more than a supporter. If you will simply check your facts carefully I am certain that you will finally get it through your apparently non-vested heads that MS did in fact invent the VC-1 technology from the ground up, and if MS had no direct hand in the Paramount payoff it is only because there were others there to do it for them. And if you actually want me to believe that they [MS] essentially had no knowledge before the fact then you would be asking me to lie.

    Come on guys, who do you think you’re kidding? Here I’ll provide a way out for you: To say that you simply want HDDVD instead of Blu-ray, and for no other reason, now that I can live and let live, but if you think that you can try and disconnect from MS in order to justify your preferences, then you’re setting yourself up to get hit with the truth, no matter how unpalatable. Trying to distance your stand from MS, or argue away 20 extra GB of storage is either uninformed or a ruse.

    Which ever format “wins” will most likely also become the more common standard for home storage and authoring as well, if not the default, and this of course makes the whole debate ever more important. I want to get the most storage per dollar spent and Blu-ray will always win out, hands down over HDDVD.

    Now get back to your Seattle home office and let the consumer decide if they want to pay less for more or not.

  19. Hey there Mr. Peabody,

    wow. You really seem paranoid about Microsoft. Companies just don’t bother me that much. It’s not that I’m trying to distance myself from Microsoft… it’s just that I don’t care as much as you do about the corporations themselves and their involvement in this. As stated earlier, I’m just a consumer who really enjoys his HD DVD player and discs. Whether you believe that or not really is of no significance to me. (I can’t change your mind, and you’ll think what you want… and that’s… ok.)

    =)

    I wasn’t saying that Microsoft didn’t invent the VC-1 technology… just stating that it’s simply a codec that many companies (including Sony) has jumped on and added to, thus having patents for the technology.

    I found a really good post by Amir (at Microsoft) explaining a lot about codecs and their differences… and the invention of VC-1 (and why it’s better than both MPEG2 and MPEG4 AVC). Apparently Warner agrees, as they are using the codec on both formats when they release Hi-Def video discs.

    Here’s the link for anyone who’s interested:
    http://www.avsforum.com/avs-vb/showthread.php?p=9931723&&

    (Don’t worry, Mr. Peabody, I won’t get offended if you’re not interested. I don’t expect you would be).

    Have a great day everyong!!!
    Thanks for reading my post.
    =)

  20. Please don’t worry about me being worried about offending you – really. I’m just telling you the complete truth that you seem to keep leaving holes in, and then squirming out by saying you didn’t really say that or mean that.

    Am I paranoid about MS – you bet your backside, and I make no apologies for it. They [you?] rule the planet to the point that good people who simply don’t want to use MS Windows or any of its related product line, at home or in our companies, very nearly don’t have a choice. As a loyal American I have to say that choice, at the most fundamental level is very importatnt to me, and when I feel that my choices are in jeopardy I become fairly concerned – paranoid if that makes you feel better about your position.

    So far you’ve attempted to side-step, misdirect, and turn corners as fast as you can to make it appear that you’re just an innocent proponent of HDDVD who doesn’t care about big corporations and are somehow completely ambivalent to the spector of MS. (Even people who are compelled to recommend MS prodcuts in the line of duty are not completely devoid of concern about MS.)It must be nice being completely innocent of any potential error on your part. I might be able to accept your position (and I’ll always afford you your right – of course – to your own position), if only you wouldn’t hide behind your amazingly oversimplified, devil-may-care, just little ole me demeanor.

    Why don’t you just tell us who you really are or at least who you really work for, it’s ok, really, I won’t be offended. No need to be in the closet here. We’ve got plenty of Windows folks who share their nickle’s worth if and when they feel like it.

    “Companies” don’t bother you? What exactly is that supposed to mean? Lot’s of companies don’t bother me either, but there are a few that really do bother me, and I’ll bet if we try real hard we can get you to admit that there’s a company or two that really does bother you too. Come on, you can do it – Tell us which one(s) it is. I’ve got a guess if you can’t come up with something… Hmmm?

    Oh, and one more thing regarding your omnipotent VC-1. Your amazingly neutral posts have lead me to do a little digging of my own, and, as I’m sure you already know but have once again conveniently left out, VC-1, besides being fully developed by Microsoft, is [not at all surprisingly] actually a spin-off, that is was developed direclty from MPEG4. So basically MS started with MPEG4 – an open standard before VC-1, and tore it apart, put it back together with a few changes, and bingo – a new Microsoft standard that they will now proceed to try and inflict on the world while hiding behind the movie industry. Wow, what a ruse, don’t you think?

    It’s just the truth – that’s all.

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