A look at History and Business

[shiftV]

Please download the PDF attachment to see the chart.

The Chart (Business):

- Separated into Bluray Camp, HDDVD Camp, and Neutral Camp.
- Summarizes the major players on their respective side.
- Major operations/assets are bolded
- Movie studios are circled with a border.

By looking at the chart, you will see who owns what, and it becomes apparent why decisions were made the way they were (in terms of which studios/CE makers is on which side/exclusivity etc.)

The History (more reasons to tell you why decisions were made the way they were):

The 70s:

- Sony developing Betamax, while JVC and Matsushita developing their own respective format.
- Sony tried to convince JVC and Matsushita to ditch their own development and back Betamax, but was denied.
- Sony pressed ahead and released Betamax in 1976.
- With help from Matsushita, less than a year later, JVC launched VHS.

Sony vs. Universal: The Law Suit (1976)

- In 1976, Universal together with Disney filed a lawsuit against Sony, claiming that their Betamax recording technology violates copyright laws. (Because everyone who owned a Betamax machine can tape television programs in their homes) However, the trial didn’t actually begin until 1979


The 80s:

- Sony’s Betamax was considered the more technically advanced format, but was more expensive.
- JVC’s VHS did not match Betamax’s quality (however acceptable), but was the cheaper technology.
- This was the key in determining the outcome of the 80s format war. Because there were two formats, people chose to buy cheap VHS machines and rent the VHS format, trying to wait it out to see which side would win before making a purchase decision.
- When the rental boom began, for some reason there was less selection of titles on Betamax than on VHS. This, together with the cost issue, more people rented VHS than Betamax, creating a self-reinforcing effect.
- By mid-80s, Betamax was considered the loser. In 1988, Sony declared that they will start making VHS machines.

Sony vs. Universal: The Verdict (1983)

- In short, Sony won the case, and the verdict was that home users can legally record television programs for private viewing only. However, their Betamax format soon lost to VHS. The importance of this case was the definition of “fair-use” (as long as recordings are used privately, it does not violate copyright laws). This transformed the movie industry where home video distribution became more profitable than theatre box office.


NOW (2007) – Looking from the history and business point of views:

- Universal and Sony will never co-operate on any large scale projects because they hate each other (sounds naïve, but take it for what its worth). Universal will never release on BR.
- Another reason why Universal and Sony do not get along is because of their music business. Sony Music and Universal Music are the two largest competing record labels in the world.
- Now, Microsoft obviously will not back Sony because of their PS – Xbox rivalry.
- So, since MS is against Sony, Mr. Steve Jobs (biggest shareholder of Disney) will obviously go against MS (think Apple) and back Sony.
- NBC and Universal is one company. More alliances between these two can be found from MSNBC.
- Other ties between the BR exclusive studios can be found in the chart, ie. MGM, Lionsgate, Fox.

After reading up on the history, I believe you will find many similarities between today’s and the last format war. What blurs things today is the computer and gaming industry. This format war JUST STARTED. It is not ending anytime soon. Buy what you like, and enjoy it while it lasts.

Some general comments:

- Lionsgate is behind BR I think its because they are relatively small and is just playing safe to go with the majority.
- A key studio here I think is Dreamworks. DW and Disney do not get along. But because Paramount owns DW, they are remaining neutral from a higher level decision made by Paramount. It would be nice if DW can jump over to HDDVD exclusive, but I don’t see that happening.
- This is a very brief outline. I am sure there are mistakes in there somewhere. Feel free to correct wherever you feel necessary.

[tsd2005]

Originally Posted by shiftV

Please download the PDF attachment to see the chart.

The Chart (Business):

- Separated into Bluray Camp, HDDVD Camp, and Neutral Camp.
- Summarizes the major players on their respective side.
- Major operations/assets are bolded
- Movie studios are circled with a border.

By looking at the chart, you will see who owns what, and it becomes apparent why decisions were made the way they were (in terms of which studios/CE makers is on which side/exclusivity etc.)

The History (more reasons to tell you why decisions were made the way they were):

The 70s:

- Sony developing Betamax, while JVC and Matsushita developing their own respective format.
- Sony tried to convince JVC and Matsushita to ditch their own development and back Betamax, but was denied.
- Sony pressed ahead and released Betamax in 1976.
- With help from Matsushita, less than a year later, JVC launched VHS.

Sony vs. Universal: The Law Suit (1976)

- In 1976, Universal together with Disney filed a lawsuit against Sony, claiming that their Betamax recording technology violates copyright laws. (Because everyone who owned a Betamax machine can tape television programs in their homes) However, the trial didn’t actually begin until 1979


The 80s:

- Sony’s Betamax was considered the more technically advanced format, but was more expensive.
- JVC’s VHS did not match Betamax’s quality (however acceptable), but was the cheaper technology.
- This was the key in determining the outcome of the 80s format war. Because there were two formats, people chose to buy cheap VHS machines and rent the VHS format, trying to wait it out to see which side would win before making a purchase decision.
- When the rental boom began, for some reason there was less selection of titles on Betamax than on VHS. This, together with the cost issue, more people rented VHS than Betamax, creating a self-reinforcing effect.
- By mid-80s, Betamax was considered the loser. In 1988, Sony declared that they will start making VHS machines.

Sony vs. Universal: The Verdict (1983)

- In short, Sony won the case, and the verdict was that home users can legally record television programs for private viewing only. However, their Betamax format soon lost to VHS. The importance of this case was the definition of “fair-use” (as long as recordings are used privately, it does not violate copyright laws). This transformed the movie industry where home video distribution became more profitable than theatre box office.


NOW (2007) – Looking from the history and business point of views:

- Universal and Sony will never co-operate on any large scale projects because they hate each other (sounds naïve, but take it for what its worth). Universal will never release on BR.
- Another reason why Universal and Sony do not get along is because of their music business. Sony Music and Universal Music are the two largest competing record labels in the world.
- Now, Microsoft obviously will not back Sony because of their PS – Xbox rivalry.
- So, since MS is against Sony, Mr. Steve Jobs (biggest shareholder of Disney) will obviously go against MS (think Apple) and back Sony.
- NBC and Universal is one company. More alliances between these two can be found from MSNBC.
- Other ties between the BR exclusive studios can be found in the chart, ie. MGM, Lionsgate, Fox.

After reading up on the history, I believe you will find many similarities between today’s and the last format war. What blurs things today is the computer and gaming industry. This format war JUST STARTED. It is not ending anytime soon. Buy what you like, and enjoy it while it lasts.

Some general comments:

- Lionsgate is behind BR I think its because they are relatively small and is just playing safe to go with the majority.
- A key studio here I think is Dreamworks. DW and Disney do not get along. But because Paramount owns DW, they are remaining neutral from a higher level decision made by Paramount. It would be nice if DW can jump over to HDDVD exclusive, but I don’t see that happening.
- This is a very brief outline. I am sure there are mistakes in there somewhere. Feel free to correct wherever you feel necessary.

A couple issues. Apple will have HD-DVD drives available for their machines. This goes against your theory.

2nd, Dreamworks' Library is not owned by Paramount. Paramount sold them. The rights are handled by DCM. DCM is currently considering exclusivity or neutrality in both camps. Whomever throws them the largest payoff likely wins.

[viciousnip]

Universal Musics supports BD

[Ronald C Dinkins]

Originally Posted by tsd2005

Apple will have HD-DVD drives available for their machines.

you have a source for this, or is it a "rumor"?

[ottscay]

Originally Posted by tsd2005

A couple issues. Apple will have HD-DVD drives available for their machines. This goes against your theory.

Do you have a link to support this, or is this more fanboi wishful thinking? Apple will support authoring to both formats from Final Cut Pro (and have added the necessary OS support to allow it). Apple has never made any announcement about availability of HD DVD drives to my knowledge, so unless you have actual information, don't state it like it's a fact.

[Ix]

He doesn't have a link to support it. FCP, as you mention, supports authoring to both - because otherwise it won't be able to compete. And certainly OSX will support USB HD-DVD drives. That's a long way from Apple releasing their own branded drive or including it in their pre-built computers.

[fronn]

Panasonic is well into the BD pool, which is the consumer electronics brand of Matsushita, so I'm not really sure you can put them into the HD DVD pool on that chart. Matsushita is part of the DVD forum, but are they supporters of HD DVD?

I thought that Sony/Samsung LCD plant was 51% Sony 49% Samsung.

Additionally, last I read, Sony has a decent amount of control of MGM -- group of investors bought MGM with Sony putting forth the most (maybe that ends up as 20%, I thought it was more, but maybe not -- just wanted to clarify and possibly get more info?), unless I'm mistaken.

@tsd2005, where was it confirmed that Apple will have HD DVD drives? It seemed like it never made it past rumor status -- I don't think Apple is part of the HD DVD club, while they are on the board of directors in the BR gang.

[MidnightWatcher]

Originally Posted by Ix

He doesn't have a link to support it. FCP, as you mention, supports authoring to both - because otherwise it won't be able to compete. And certainly OSX will support USB HD-DVD drives. That's a long way from Apple releasing their own branded drive or including it in their pre-built computers.

He may have been referring to this article. It makes business sense for Apple to support HD DVD.

[ottscay]

Originally Posted by MidnightWatcher

He may have been referring to this article. It makes business sense for Apple to support HD DVD.

I'm sure he's referring to that article, but NO, it does NOT make sense for Apple to do so. You must be buying into HD DVD fanboi myth #2: That sales on either format are making enough money that a studio would care yet (right after muth #1: that HD DVD PQ is better).

Apple does not want to back a format that MS is invested in, and further more they want to push AVC encoding (which they have patents and products built around) while HD DVD is too invested in VC-1 for their tastes. It would make extremely poor business sense for them to throw any support behind HD DVD, ecept to make sure that their highend FCP program can author to any format, so they don't lose sales too Avid.

[tsd2005]

Originally Posted by ottscay

Do you have a link to support this, or is this more fanboi wishful thinking? Apple will support authoring to both formats from Final Cut Pro (and have added the necessary OS support to allow it). Apple has never made any announcement about availability of HD DVD drives to my knowledge, so unless you have actual information, don't state it like it's a fact.

I don't have a link, sorry. I do have a Press Release from Apple however which states:

"Apple is committed to both emerging high definition DVD standards—Blu-ray Disc and HD DVD. Apple is an active member of the DVD Forum which developed the HD DVD standard, and is a member of the Board of Directors of the Blu-ray Disc Association. "

Apple doesn't have a problem with MS. They sell MS product on their machines. Steve Jobs has spoken about both formats, and is a big reason DISNEY will be going neutral when they do.

[tsd2005]

Originally Posted by ottscay

I'm sure he's referring to that article, but NO, it does NOT make sense for Apple to do so. You must be buying into HD DVD fanboi myth #2: That sales on either format are making enough money that a studio would care yet (right after muth #1: that HD DVD PQ is better).

Apple does not want to back a format that MS is invested in, and further more they want to push AVC encoding (which they have patents and products built around) while HD DVD is too invested in VC-1 for their tastes. It would make extremely poor business sense for them to throw any support behind HD DVD, ecept to make sure that their highend FCP program can author to any format, so they don't lose sales too Avid.

You're right, the $100M in sales that HD-DVD is a number that Studios would not care about. It's pathetic (note heavy sarcasm).

You BD Fanbabies need to start living in reality.

REALITY IS BOTH FORMATS OFFER GREAT HD CONTENT

Currently in the standalone sales, HD-DVD is winning big and the numbers are enough to make a Studio notice, since they beat DVD in it's first year. You remember DVD right?

[Star56]

Hate to nit pick....but the Sony court decision allowed for recording for the purpose of time shifting. Librarying (archiving) was never a part of the final decision and is still up in the air. The current Supreme COurt has stated that it would reconsider the Sony-Betamax decision if the right case was brought before the court.

[nataraj]

Originally Posted by Star56

The current Supreme COurt has stated that it would reconsider the Sony-Betamax decision if the right case was brought before the court.

When and where ?

[rdjam]

Originally Posted by Ronald C Dinkins

you have a source for this, or is it a "rumor"?

There have been posts on an Apple insider site called "secrets" or something.

Basically a developer saw the support in a pre-release of their next OS, and Apple have also already said that the next versions of their video editing software will support both.

[shiftV]

Thanks to those who have added/commented/corrected the original post. Like i stated, some of those numbers and facts can very well be off. I can't say they're 100% correct. And it was also a very brief outline. But I think it fills in many holes that not everyone here is aware of. What conclusion you draw from this big picture is up to you.