Transformers director Michael Bay did some quick morphing himself this week in response to the announcement that movies from Viacom's
In one fell swoop, Paramount and Dreamworks dissed the heck out of poor Sony
Ouch! Tell us how you really feel, Mike. He even floated the idea that he would deny Viacom a sequel to Transformers. Soon thereafter, he took it back. He composed a happier post later in the afternoon expressing regret that he reacted so indignantly to the HD-DVD news earlier. He explained that he had some dinner guests over that were Blu-ray owners ... and they were miffed that Transformers wasn't coming out on Blu-ray ... and yadda yadda yadda.
Well, I obviously can't tell you how Michael Bay really feels, because I don't have access to his thoughts, but I speculate that the first post was more of a true opinion. He's right -- Paramount really is shunning an opportunity. We all have to remember that Sony's PlayStation 3, debacle that it's been so far, nevertheless contains Blu-ray technology. As time passes and price cuts occur, the PS3's installed user base will grow. Hardcore gamers are definitely the target audience for many elements of Viacom's content library, particularly Bay's action-heavy fare.
The exclusive HD-DVD commitment will include all movies distributed by Paramount, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies, MTV Films, and DreamWorks Animation, according to a press release. The deal excludes Steven Spielberg from format exclusivity, though the director may go HD-DVD only in the future.
Several of the major production companies have already picked an exclusive hi-def disc format. Sony Pictures, News Corp.'s
But is there more to this week's announcement? According to some reports, there has been speculation that companies sympathetic to HD-DVD technology paid Viacom and DreamWorks Animation to make this move, perhaps as much as $150 million. A manufacturer of Blu-ray discs, Blue Ray Technologies, fired off a press release complaining about the payment. Erik Hansen, founder of the company, said, "Toshiba and HD-DVD offered this deal because they are desperate. The public has chosen Blu-ray discs with their pocket books, buying BDs 2-to-1 over HD-DVDs this year." He also can't fathom why Viacom would put retailers in the position of buying the less popular format. I see his point; in fact, Disney's CEO Bob Iger told investors a similar tale in a conference call not long ago.
As my Foolish colleague Rick Munarriz noted earlier in the week, the decision to deny Blu-ray owners the magic of Shrek films smacks of the old VHS vs. Beta war. Media investors and consumers don't need that. What they need is one format for content libraries to be re-released on.
I find Viacom's decision disappointing, and have to wonder whether it will eventually reconsider. The market will ultimately tell Hollywood what it wants; in the meantime, spreading out one's bets would seem to be a smart thing to do.
Foolish fun with the format wars:
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Fool contributor Steven Mallas owns shares of Disney and General Electric. As of this writing, he's ranked 13,952 out of more than 60,000 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
