Understanding Paramount – HD-DVD on the rise

If you listened to both sides in recent months regarding to who’s winning the high definition video war it was like listening to an outrageous claims competition between Comical Ali and Baron Münchhausen. Sony’s made something of take-over bid for corporate BS in the last couple of years, but I would trust the claims of the HD-DVD gang either. They’re both arguing the toss over total numbers of sales that a typical DVD blockbuster movie might accrue alone.
But what’s really stoked up the fires of decent is the announcement that having been playing both sides Paramount has now decided to chop it’s interest in Blue-ray and put it’s energies into HD-DVD only! Considering how much ‘we’re winning!’ glee we’ve seen from Sony recently this appears to fly in the face of commercial logic. That assumes Sony weren’t full of it, and that HD-DVD wasn’t actually making real inroads.
Myself, I’m a friend of the third way. Given the pathetic numbers both formats has achieved any lead by either side could easily be overtaken, once (and if) a format becomes accepted. I’d suggest Paramount is thinking that it doesn’t really care which one wins, but it’s only prepared to spend time and effort releasing on one, what with the numbers being currently so poor.
So which one? It didn’t matter which one, they just picked it out of a hat, or kicked a movie executive off an high building with HD-DVD on his front and Blu-Ray on his back, whichever way up he landed.
I think it might have come down to how much Sony asks in licensing per disc, but it’s purely academic, they wanted to support only one and they picked HD-DVD for whatever reason.
Doing this now doesn’t stop them coming back and supporting Blu-ray if Sony manages to make it fly, but it reduces the overhead for supporting HD this financial year. The trouble is with decisions like this is they might be read by other Blu-ray supporters that Paramount knows something they don’t, making them nervous. And with Christmas coming and both Transformers and Bourne Ultimatum exclusively on HD-DVD they might get tempted to jump ship to be part of that. Whatever happens this change of tack by Paramount might well have big implications for the future success of HD-DVD, unless something equally unexpected happens to brighten Blu-ray’s day.

UPDATE: The New York Times has spilled the beans on a rumoured $150m kicker that Paramount and DreamWorks Animation will get for making their commitment to HD-DVD, but then says it’s quoting an executive who wishes not to be named! This all sounds rather murky to me, and I’m curious what incentives have been offered to Blu-ray supporters to stay with that technology, and where this money actually came from. This agreement supposedly on last 18 months, so HD-DVD might only be buying short-term friends. But it will be interesting to see if this is $150m well spent, wherever it came from.


1 Response to “Understanding Paramount – HD-DVD on the rise”

  1. August 28, 2007 at 8:14 pm

    Paramount was a strong and exclusive HD-DVD supporter back in 2005 (as a matter of fact the first studio to announce titles!) and hinted in one of their later press statements (when they decided to go both formats) that their choice for Blu-ray was basically built on high sales expectations for the Playstation 3.

    Those have been brutally shattered by Nintendo’s Wii and statistically every PS3 owner own this planet doesn’t call more than 2 Blu-Ray Discs his own. The PS3 owners want games, not movies in HD, so there is no longevity effect favoring Blu-Ray.

    The only market offering longevity are currently HD-DVD players (if the PS3 is not considered an equal stand-alone Blu-Ray player). Someone at Microsoft must have gotten wind of Paramount’s frustration and offered them an “incentive”.

    Cutting of Blu-Ray disc supplies for the PS3 is good for Microsoft’s XBox 360 “The enemy of my enemy is my friend”. It is part of Microsoft’s Summer and Fall offensive:
    First they get their hands on a previously PS-exclusive game (Ace Combat 6), in September they’ll issue the long-awaited Halo 3 (an XBox 360 exclusive) and the really anticipated PS3 games have all been postponed until 2008. Consumers will think twice which game console they’ll purchase for Christmas with previously exclusive PS-games (Devil May Cry, Silent Hill 5 etc.) coming out day-to-day with the XBox 360 next year.

    Microsoft is a pretty darn good chess player…

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