Toshiba and DreamWorks: BFF
by Pravin on February 27th, 2008 in news.
In case you didn’t understand the headline, BFF is texting-speak for “best friends forever,” and recent comments by DreamWorks CEO Jeffrey Katzenberg in a Reuter’s article give the impression that his company’s relationship with Toshiba might have a certain component of that BFF sentiment to it.
Katzenberg said, “We have a partnership with Toshiba and have an obligation to see this through.” Acknowledging last August’s exclusivity deal, he went on, “As you know, we have been well-compensated for our support. It really is in their court at this point to really declare what the next step will be. We’re poised either way to jump into the marketplace when the conditions are right to do so.”
If these comments had come a month ago, we’d have lumped them together with those from Universal’s Ken Graffeo. But coming exactly one week after Toshiba’s announced exit from HD DVD production, these remarks are a little harder to understand. But then, we don’t really know what the terms of the exclusivity deal are other than the widely publicized $150M in financial incentives that brought parent company Paramount over as well.
An analyst from JP Morgan suggested that the market for high-def media is still small enough that it’s probably not a very big deal for DreamWorks to release Bee Movie exclusively on HD DVD and miss out on Blu-ray sales in the short-term. But look at it this way: even if they wanted to release it on Blu-ray, there hasn’t been enough time since Toshiba’s announced exit to crank up production for that format. And it’s not like DreamWorks is missing any window of opportunity by holding out for another couple of months. If anything, there will be even more Blu-ray population to sell movies to by Christmas compared to whatever exists today.
I’m sure that Toshiba is not going to prevent Paramount, DreamWorks, and all the related companies from ever releasing Blu-ray versions of their movies. In fact, one phase of this has already started on Amazon with Paramount dusting off their old stock of Blu-ray titles like Black Rain and Mission Impossible from when they were making movies for both formats. It’s inevitable that the Viacom-owned companies will get their manufacturing deals in place soon and put out new titles on Blu-ray in a couple of months.
One interesting tid-bit to take from Katzenberg’s statement is that perhaps Paramount did not have the escape clause from their HD DVD exclusivity that had been widely reported. I’m not saying there was no such clause, but that it might not have been as instant or as automatic as had been suggested by various news writers last month.
It was nice to hear that the DreamWorks CEO had the intention to honor his company’s agreements with Toshiba. Not that it makes up for how badly HD DVD owners felt after Warner’s actions, but it lets you know that maybe companies aren’t all as evil as we might have thought. Ok, maybe they are evil, but just a little less evil than we thought. Like the tiniest part of a flea’s butt amount of little.
February 27th, 2008 at 11:42 am
So we have to wait for Toshiba to say its OK for Dreamworks to go Blu-ray? Thats pretty lame…
February 27th, 2008 at 12:00 pm
You already had to wait for Toshiba to let Universal know when to go Blu – which they apparently did.
February 27th, 2008 at 12:57 pm
I’m pretty sure Dreamworks and Paramount were let go from their agreements when Toshiba called it quits. Chances are Kratzenberg just wants to give some more titles to us HD DVD owners.
February 27th, 2008 at 5:18 pm
Gonna have to wait even longer to get Over the Hedge on Blu-Ray then.
Off topic action:
Sony unveiled Blu-Ray 2.0 players that were the same price and specifications of HD DVD players 2 years ago. Hilarious.
February 27th, 2008 at 5:28 pm
This comment is off the subject but I wish Netflix would start selling off their HD DVD’s I have purchased other used DVDs from them and they are in great condition. Box is brand new and the discs where in very good shape. I sent a suggestion to them from their contact page…. other Netflix subscribers should do the same.
February 27th, 2008 at 5:31 pm
@Jason – when I read about those players, I thought, “Hey that’s good news for Blu-ray to have accelerated their Profile 2.0,” but it turns out these machines are coming out several months from now in the summer and fall.
@Travis – you know that Hollywood Video has been selling off their discs, right?
February 27th, 2008 at 7:22 pm
I would like to know why the studios new releases are coming out on DVD & BLU-RAY. Then a few weeks later there coming out on HD DVD or HD DVD combo format DVD. Maybe if the studios get a brain they would release movies on HD DVD combo format DVD & BLU-RAY. I just don’t get it.
February 27th, 2008 at 8:27 pm
It’s just Warner that does the delayed release thing, and that’s because it’s part of their exit strategy from the format.
February 28th, 2008 at 12:47 pm
So why is Dreamworks bound to this contract while Paramount is not?
February 28th, 2008 at 1:10 pm
It’s possible that Katzenberg’s statements have been misunderstood or that he’s been misquoted in some way.
I bet that the whole family of companies will start putting out their Blu media at about the same time, in a couple of months from now.
February 28th, 2008 at 2:20 pm
Yes I did know that Hollywood video did that…… problem is I don’t live all that close to one.
February 29th, 2008 at 11:53 pm
Being a PS3 owner i was truly dissapointed when paramount claimed “They were doing what was right for the customer” and dropped blu-ray as everyone knows this move had alot more to do with the 150Million backdoor deal with toshiba than anything else. !
So much for ethical buisness practices ! We can surly count on companies lieing to customers if it’s in their interests.
If toshiba had not spent 150 million bribing paramount to drop blu-ray and instead had payd a blu-ray exclusive studios (even sony studios) to release hd-dvd IN addition to Blu-Ray’s.
Or they could have payd warner to continue to do HD-DVD (many HD-DVD disks make a loss due to low sale volume -only top sellers make a profit).
Instead Toshiba/Microsoft wanted the entire next def media market for themselves and tried to block Blu-ray ( microsoft have a reputation for trying to monopolise things look what they did to Netscape! ) – they should never have tried attacking blu-ray they should have been helping HD-DVD customers get titles instead. !
They picked the wrong format and tried to force it on everyone by limiting blu-ray sales from paramount !
The analogy of HD-DVD vs Blu-Ray looks like Germany vs the Allies.
HD-DVD may have landed the first attack but they bit off more than they could chew and Blu-ray beat them back.
Toshiba/Microsoft had no interest in helping HD-DVD customers they were more interested in attacking Blu-ray customers or perhaps in the case of microsoft simply trying to destroy the entire HI-DEF optical market (MS want to bloster their online Download customers to sell more low-res inferior pay-per view/machine download movies).
I think the entire Blu-ray vs HD-DVD is a perfect example of corporate-greed, bullying, cheating etc it sure was good to see the good guys win in the end though.
And you HD-DVD customers now that it’s over it’s allright to say 50 really is more than 30.
(or if you prefer 25>15).
March 1st, 2008 at 7:36 am
Stephen, your explanation makes sense from your side of the format war. If you owned an HD DVD player, I think your interpretations would be a lot different. Very much so.
I’m sure you think that everything done by Team Blu-ray was honest and applaudable. That’s simply your opinion. “Germany vs. the Allies” example — if you hadn’t seen that parody video, what example would you have presented instead? I think history demonstrates that Axis powers were formidable opponents not to be taken lightly.
If you were less biased, you’d admit that Sony has the big history of foisting proprietary standards (memory stick, mini-disc, and UMD being the most recent examples), and a better understanding of the business motives would show that Blu-ray picked up steam because a bunch of companies wanted to pursue a different set of royalties than they’d have gotten if they stuck with the format presented by the DVD forum, and that DRM issues were also involved.
In about five years, we’ll start to get a better peek into the real history and details of what went on at all of these companies, and we’ll find out how much of your theories end up being true.
March 2nd, 2008 at 2:10 am
Sony /Philips/ Warner and Samsung etc i am sure have also done questionable things in the past BUT regarding the blu-ray vs hd-dvd issue – blu-ray appear to be behaving in a far more reputable way than toshiba or Microsoft who did almost nothing for HD-DVD customers.
Toshiba were ethically quite wrong to bribe paramount into an Attack on blu-ray format when in fact they should have been assisting HD-DVD customers to get more titles – the suddenness and backdoor nature of the deal were intended as a deliberate and savage attack with no warning.
Toshibas behavior is so much like Hitler who rather than help the german people instead started a war which ultimatly devestated europe. As for microsoft their motives were more in wrecking the entire optical media market for both blu-ray and Hd-DVD customers just to promote their inferior download service. The HD-DVD camp like Hitlers germany was a formidable combination but they were not the least interested in fair play or assisting HD-DVD customers.
Warner a balanced producer of both formats based it’s move to exclusive blu-ray on it’s customers buying patterns and will still continue to print hd-dvd for another month or so – that is very fair behavior compared to what paramount are did to blu-ray customers.
March 2nd, 2008 at 5:27 am
Stephen, you have an extremely biased view of what went down. I think you are still feeling hurt from when Paramount went exclusive and have now incorporated that into your analysis here.
Incentives to bring a studio over or keep them from making titles for the competing format is something that both sides have engaged in. I don’t see why it’s good if Team Blu does it, but bad when the HD DVD camp does the same thing.
According to your own logic, Sony should also be considered hurting Blu-ray owners by keeping studios exclusive to the Blu-ray format.
It’s ridiculous for you to compare any of this with Hitler. No more comment approvals for you. You’re not representing your side very well. But I thank you for not insulting HD DVD owners or calling us names.
March 3rd, 2008 at 5:31 am
From a point of view of ethics – tosiba/paramount went about purposly deceived people about what they were doing – rather than say
“We are receiving 150Mill to go hd-dvd exclusive for 18months and will be instantly halting blu-ray”.
Incentives are ok if they are open about it fine BUT
Instead they fabricated and deceived all HD customers with some other story. I see it as a breach of public trust – How can people believe Paramount after this episode ?. We now know it was a 150 million deal over 18months but they tried to hide this. If Paramount were to say “our company is environmentally friendly” would you believe them after this – it’s pretty obvious they care more about $$$ than the truth or their customers – it’s dissapointing – would you trust them after this ?
They are in a position of trust when issuing statements what sort of example is this meant to be ? – they may think it’s ok Well I don’t.
March 3rd, 2008 at 6:17 am
I approved that last one because you deserved an opportunity to present a rebuttal.
If you think that the companies lined up on the Blu-ray side have not been given various incentives and subsidies, then you are naive (or heavily biased). I haven’t brought it up as an official topic at this site becuase there’s no hard proof yet but only a few mentions here and there about Warner being paid off $400M to make their fateful January decision, and there was talk about Fox also being heavily courted to the tune of another $120M or something like that. A lot has gone on at the corporate level that we don’t know much about. Wait some months before you point fingers and choose your heroes, or else you may find that your heroes and theories are all wrong.
Let’s move on to another topic.
March 4th, 2008 at 11:03 pm
Lets all face it…. Blu-ray is the better format. Why would you chose to support a format that can be replace in a few years?
Business ethics? Whatever! Business is ugly and ruthless- bottom line its about the dollars. I can say that I’m sure Universal & Paramount feel stupid to have thrown all that money on producing discs for the losing format.
I, myself, is a blu ray owner and will be enjoying the sales that will be stirring up in the coming months for HD DVDs. I have recently purchased a HD DVD player and will begin to purchase several Universal films that I would enjoy watching in better quality than the dvd renditions that i own. When all Universal and Paramount films come out on Blu ray- I’ll still repurchase them, since my future HD DVD collection is a gift to adorn my girlfriend’s room.
For me…. its all about the movie.
March 5th, 2008 at 4:58 am
There’s a practical reason to get HD DVDs right now, and that’s if you know that your Blu-ray conversion is not going to be happening until Christmas or even later. Universal and Paramount are most likely to come out with just a few discs in the months ahead, and probably won’t get caught up with all their previously HD DVD exclusive movies on Blu-ray until some time late next year. If you already have an HD DVD player, and some of these movies are important to you, then you might as well get them now for $10 than wait until next year to pay $20.
March 13th, 2008 at 6:16 pm
ok… i hate blue ray …. reason … sony is pushin there sales by makin a player that is only able to play movies in 480p 0r 1080p….whats that .. at least hd dvd could upgrade into 1080i or 720p not forced 1080p….i dont have a 1080p tv yet, but i tell ya when i do i wont rush out and get blue ray …ill buy a tv that upconverters evrthing to 1080p with out the damn blue ray…unless its freee..hahaha ..,, well i own a good hddvd player that will make all my normal movies good as well and will upgrade them to 1080p ha ha sony