EU Continues Probe of HD Video Formats

[admin]

A slowly simmering probe by the European Union into the format war has taken a new turn. EU antitrust regulators have requested that a number Hollywood studios turn over information about their negotiations with electronics manufacturers involved in HD technology. Concerned about violations of European antitrust regulations and the anticompetitive nature of exclusive deals with technology developers, the European Commission has given until the end of last week for the studios to respond.

Discuss "EU Continues Probe of HD Video Formats" here. Read the article.

 

[westcott]

I am not sure if a government decision to force both technologies to provide content from all studios would be a good thing for the consumer or not. It may provide more choices in content but it could make the technology war last even longer without a winner and they could both drag on without full support from the consumer.

Tough call and sometimes you have to look at the big picture, even if that means overlooking a clear violation of antitrust laws. They are well intentioned but in this case, could be detrimental to the growth of either technology.

 

[jinjuku]

I love this quote from the article: "Through subsidiaries, Sony Pictures Entertainment and Sony Computer Entertainment, Sony stands to gain on both the hardware and software fronts."

Hello! Why do you think they purchased Paramount? Sony saw the writing on the wall 10 years ago. They knew to line up their business models around content delivery.

Sony's gamble in all of this, just like with their Mini Disc, Mem Stick Pro, and audio encoding formats is to try and yet again win and make THEIR encoding format the defacto standard. I am amazed at how many attempts at climbing this particular mountain Sony is willing to try.

 

[avaserfi]

Sony's gamble in all of this, just like with their Mini Disc, Mem Stick Pro, and audio encoding formats is to try and yet again win and make THEIR encoding format the defacto standard. I am amazed at how many attempts at climbing this particular mountain Sony is willing to try.

With all the money they have spent on failure if they get one format to the be the standard it will pay off in the long run as long as that format follows the typical cycle of around 5-7 years which given current technology trends is questionable.

 

[BMXTRIX]

I find this one of the quotes to be most interesting...

"With luck, for consumers, these probes will blossom into full-blown regulatory action. It can only be good for consumers when they actually can decide which format they prefer and get any movie they want on either format."

I don't see how forcing companies to do the bidding of the government is a good thing. Good business comes from proper competition, and seeing as how one of these technologies may be a bit more expensive, but also a bit more technologicially advanced, it is clearly less likely to do well against a 'good enough' solution. Consumers win short term, but not long term. It is support by individual companies that really has gone a long way to define the format wars at this time.

I mean, if all studios must support HD DVD and Blu-ray, then why not let Sony subsidize 100% of their players and undercut Toshiba. Sure, we won't see players from Panasonic, Denon, Sharp, Mitsubishi, JVC, Samsung, etc. We will ONLY see players from Sony and Toshiba with each side trying to force their standards down our throats, but at least we'll get all the movies...

I have no belief that this mentality will at all help or support consumer adoption. It is clearly detrimental to Blu-ray which has higher hardware pricing due to the more advanced technology and their unwillingness to subsidize stand alone players. So, we would gain movie choice then lose hardware choice and only Toshiba and Sony would see revenue.

I would call the statement very short sighted for what it would really do and I don't believe that government interference will help consumers to actually have choice.

 

[agarwalro]

If movie studios are forced to sell content in both formats, it could possibly mean higher prices for both...

 

[Buckeye_Nut]

A slowly simmering probe by the European Union into the format war has taken a new turn.

LOL...... That article is hilarious!! Ya gotta love it when socialists try to throw their monkey wrench into private sector. The fact that Europe lags behind in a low-def public broadcasting dark age during the same age of this commision..... makes this quite funny indeed. In fact, their current low-definition reality makes for an excellent testament to their socialized methods. It's a bit difficult for me not to chuckle out loud while reading the above article.

If anything, the EU should form a European Commission and spend millions of tax payer Euro's to probe themselves as to why they still reside in a broadcasting dark age At least HD is something they can fix down at the flunky-run government TV headquarters......

 

[Buckeye_Nut]

I find this one of the quotes to be most interesting...

"With luck, for consumers, these probes will blossom into full-blown regulatory action. It can only be good for consumers when they actually can decide which format they prefer and get any movie they want on either format."

I don't see how forcing companies to do the bidding of the government is a good thing.

You'll need a 'liberal' thinking cap to understand their logic.

 

[BMXTRIX]

If movie studios are forced to sell content in both formats, it could possibly mean higher prices for both...

Considering that HD disc sales are incredibly low, and that studios may still choose to opt out instead of releasing on either format I personally believe that a forced hand that doesn't lead to a single unified format (not necessarily a compromise) would actually cause studios in Europe to simply opt out.

Especially considering that disc sales are likely borderline for making money at all right now. DVD is the real competition in all of this and HD DVD and Blu-ray combined sales are a drop in the bucket, yet likely cost the most to produce masters for. I struggle with this article in many ways as it seems to encourage government meddling which does not point to solving a darn thing.

It also seemed completely irrelevant to point out that Sony has a lot to gain in the Blu-ray format. This is a well established fact. Toshiba, as the current exclusive fully specified HD DVD product provider seems to have about as much to gain as forcing 40% more movies to their format would improve their specific sales, royalties, and bottom line significantly.

 

[Buckeye_Nut]

The EU is a silly organization....

The only thing they'll accomplish through the above commission is spending millions of taxpayer euro's for a net gain of ZERO results.

........... more taxpayer money well spent on another worthless effort


Thankfully, it's not my tax dollars they're flushing down the toilet

 

[Rock&Roll Ninja]

Yawn.,.. It would take 30 years for the EU to come to the conclusion that 'Hitler is bad'. Both HD technologies will be resting in their technology graves alongside car turntables and Atari 2600s before they ever get around to a conclusive result.

 

[tomes]

EU needs to stop interferring with everything..

It's senseless to tell a company like Sony, that has a stake in one format, to publish in the competitors format as well. It has to be any company's decision what format they want to utilize. Doing both will increase their costs, and they may have different argumentation as to why stick with one particular format (better copy protection for instance, not that I'm for copy protection/drm in any way..)

Maybe they should also tell Apple to port all of their creative apps to work on Windows Vista then. Why do I have to own a mac to be able to use their cool video and editing software??? Better yet, EU should mandate Sony and MS to start delivering all their games to the competitors platform.. [\Sarcasm]

 

[Buckeye_Nut]

Maybe they should also tell Apple to port all of their creative apps to work on Windows Vista then. Why do I have to own a mac to be able to use their cool video and editing software??? Better yet, EU should mandate Sony and MS to start delivering all their games to the competitors platform.. [\Sarcasm]

LOL

OK...that gave me a chuckle-out-loud moment.


EU logic makes no sense unless you're wearing the official EU thinking cap....

 

[jinjuku]

Maybe they should also tell Apple to port all of their creative apps to work on Windows Vista then. Why do I have to own a mac to be able to use their cool video and editing software??? Better yet, EU should mandate Sony and MS to start delivering all their games to the competitors platform.. [\Sarcasm]

I think it may be more about delivery of content than content creation. Water color vs. Acrylics vs. Chalk vs Sculpture is one thing, it may be another to be in cahoots to only be able to see this stuff at a gallery vs. museum, just a stab at it on my part....

 

[BMXTRIX]

I think it may be more about delivery of content than content creation. Water color vs. Acrylics vs. Chalk vs Sculpture is one thing, it may be another to be in cahoots to only be able to see this stuff at a gallery vs. museum, just a stab at it on my part....

Yet that isn't really it... It isn't a gallery vs. a museum, it is one gallery vs. another gallery.

It is that they are saying that the artist (studios) must display their works at all gallery's regardless of the revenue loss they may forsee by following this course of action. It is not beneficial to studios who are making business decisions, it is not beneficial to CE manufacturers who are also making business decisions.

Is it helpful to consumers?

I think that hardware quality will suffer greatly and eventually force the formats into a guaranteed failure by this sort of mandate, which, does not help consumers.

It really is a zero for three concept - and a waste of time and money.

 

[sholling]

I agree with the author. Exclusive agreements between hardware vendors and the studios is on its face anti-competitive and probably illegal. On the level of Henry Ford getting an agreement from then monopoly Standard Oil to only sell gasoline to Model T owners. Sure there would have been rapid standardization and an end to consumer confusion but you would still to this day be stuck driving Model Ts.

I'm not for forcing anyone but Sony (because of their self created conflict of interest) into producing both formats long-term. But I am for fat fines for signing exclusive agreements, and a requirement that those who made anti-competitive agreements produce both formats for for say five years.

 

[Buckeye_Nut]

I agree with the author. Exclusive agreements between hardware vendors and the studios is on its face anti-competitive and probably illegal. On the level of Henry Ford getting an agreement from then monopoly Standard Oil to only sell gasoline to Model T owners.

That has absolutely nothing to do with what's happening. In fact....that's coming from waaay out in left field, and I'm surprised more people can't see the obvious..... monopoly you say

On the other hand, the "tomes" post exposes the crux of this issue nicely.


To look at it from a different angle....... what's happening is no more illegal than any single restaurant/stadium/school/ect, etc, etc.... contracting with either coke or pepsi. (not both) If you don't like coke.... buy your drink at a place that serves pepsi.(or order lemonade)

PS....I chose lemonade. Hopefully, how this relates to the above discussion doesn't sail sail right over a few heads.

 

[BMXTRIX]

I agree with the author. Exclusive agreements between hardware vendors and the studios is on its face anti-competitive and probably illegal.

How exactly is it anti-competitive?

On the level of Henry Ford getting an agreement from then monopoly Standard Oil to only sell gasoline to Model T owners. Sure there would have been rapid standardization and an end to consumer confusion but you would still to this day be stuck driving Model Ts.

This is a very poor example: You still can buy any movie that is released you want, you just have to buy the specific playback device. So, the content is fully available to anyone, and just because it is exclusive to HD DVD, it doesn't mean that those who only own DVD players can't buy it... they just can't access the actual video without upgrading their player.

This is not at all like Ford denying people access to the ONLY oil available, but more like DVD vs. DivX where certain studios chose one side over the other, and when DVD prevailed, all followed suit.

I'm not for forcing anyone but Sony (because of their self created conflict of interest) into producing both formats long-term. But I am for fat fines for signing exclusive agreements, and a requirement that those who made anti-competitive agreements produce both formats for for say five years.

Once again - how it it anti-competitive? Universal doesn't make an 'exclusive' product, they make exclusive content. There are tons of other movie choices available... like XM vs. Sirius - there is exclusive content available. It is entirely inappropriate and anti-business to demand that all of a businesses exclusive product be shared among the competing companies. Is that anti-competitive? No, I would say that is the baseline of what it means to be competitive.

Keep in mind that both HD DVD and Blu-ray are backed by many very large companies such as Microsoft, Panasonic, and Samsung... It isn't exactly like a head-to-head battle.

 

[sholling]

How exactly is it anti-competitive?
This is a very poor example: You still can buy any movie that is released you want, you just have to buy the specific playback device. So, the content is fully available to anyone, and just because it is exclusive to HD DVD, it doesn't mean that those who only own DVD players can't buy it... they just can't access the actual video without upgrading their player.

No disrespect intended but this is a remarkably silly comment. How does that differ from Ford being the only "playback device" for gas? See below... Actually my choice of Ford as an example was a poor one. I should have said Mercedes and standard oil. Such an agreement would have limited choices to expensive German cars and the Model T driven boom in Joe Sixpack car ownership would never have happened.

This is not at all like Ford denying people access to the ONLY oil available, but more like DVD vs. DivX where certain studios chose one side over the other, and when DVD prevailed, all followed suit.

Choosing to produce for one or the other is perfectly fine. Agreements (or even discussions) between Sony and content producers to produce for only one or the other is on its face collusion and anti-competitive. Even trying to persuade content producers to keep content exclusive or an internal agreement within Sony divisions could be construed as anti-completive.

Actually my ford analogy works fine. You could have brewed your own fuel. Or bought a wood burning steam car. Or charged up your electric car. It's just that IF you chose to buy gas you would need to drive a Ford, and only Ford would have survived the shake-out. If you choose to watch most hi-def movies you will have to buy an over-priced Sony. How does eliminating price pressure benefit the consumer? Standards? Remember video disk coexisted with VHS for years precisely because there were no exclusive agreements. Consumers were allowed choices. It was the convenience and rapid price drop of DVD players that picked a winner between the three.

Sony knows that without exclusive content agreements that the first full featured backward compatible player to reach $100 will win Joe and Jane Sixpack's loyalty. They can't win that race and they know it so they lock up content. The bottom line is that if somebody doesn't get to $100 soon then both formats may well go the way of DVD-Audio. A nearly dead niche product.

BTW I'll probably buy an over-priced Sony at some point but not right now.

 

[Davemcc]

This whole argument rests on an invalid assumption, i.e. that the consumer has a right to every title in every format. That's absurd. It is the right of technology providers to license their technology to whomever they choose. Likewise, it is the production companies' choice to issue titles in the formats that they have license to. This basic freedom to contract is the foundation of the free market. I'm not saying this is ideal for the consumer, but let's look at how this plays out in the free market.

A tech provider that refuses to license will find that it has little or no product to sell and go bankrupt.

A tech provider that demands exclusive deals with producers may find that few producers accept such terms and be forced to license more freely or go bankrupt.

A producer who accepts an exclusive format demand may find itself with an unpopular format in which it can't sell it's titles.

The consumer votes with his dollars which format or titles he will make an investment in. It is only the consumer that can keep a format or producer afloat. Denying the consumer what he wants can end in bankruptcy.

These are the vagaries of the free market. Nowhere above has the coercive effect of government been required to compel or restrict the format or titles available for release. Each party is free to make good decisions or bad decisions according to their own best guess.

If the government applies its regulatory power in favor of the consumer's perceived need to compel tech providers to give their format to every producer, it eliminates the competitive forces that ultimately benefits the consumer. Example: With two competitive formats, manufacturers must strive to reduce the price of players to not only attract first time users to that format, but to also draw owners of the other format to own both affordably. Example: If a producer signs an exclusive format deal, they must ensure that their product has such inherent value and production quality that consumers will adopt that format. If the production company can't compete at that level, the other format may dominate the market at the expense of the less competitive producer.

This regulatory solution will also guarantee that there will be no winner to the format war because there will be no war. Manufacturers will rest on their current designs and price structures and simply rake in profit without the need to research further. Format providers sit back and take in profit from their current format without regard to how it could be improved to gain a competitive edge. Producers can put out any or schtick and expect that consumers will take it because it can be put out cheaply on any format. Ultimately, consumers get stuck with stale technology at higher prices with lousy content, yet somehow, this seems to be the answer that some people want.