NY Times Confirms $150M Pay-off to Paramount,exclusive deal to last 18 months

The NY Times has confirmed via two Viacom executives, who spoke on the condition of anonymity, that Paramount has received a $150M pay-off to support HD DVD exclusively for a period of 18 months. The $150M is comprised of cash and future marketing deals. Also re-confirmed is that the deal includes no films directed by Steven Spielberg.

[Loudninja]

LOL, such a shame they had to payed someone off to get support.

[Marona]

But... $150 Million? Is this for real? Even their films make more than 150 million. If I was the head of Paramount I'd demand it over a billion if they want an exclusive deal.

[Bleyd]

that they're only selling at most 100,000 to 250,000 of any new blockbuster title and maybe a few thousand of their catalogue titles total. At an average price of $20 to $25 that only gets you about $5,000,000 to $5,125,000 per blockbuster title. Let's say they release 10 blockbuster titles in a single year then that would only make them approximately $50,000,000 and that's not including the cost it takes to make the disks and then advertise for them. So the $150,000,000 pay off for exclusivity in the HD market is pretty good for only a year and a half. From a strict money standpoint it's a good business decision for the short term. Think of it as renting out an entire restaurant for an entire day to a group of 20 people to celebrate all day for a birthday. There's no way that they'd do that for less than what they could possibly make during that time and would actually probably rent it out for more than they could make during that time. It sure sucks for the rest of us who would like to eat at that restaurant on that day but there's still a chance for you to eat there after the deal is done.

[nix]

...i believed when you said, "Blu-Ray is not our competitor". q:

[aaquib2]

Almost as desperate as Microsoft paying $50M for GTA4 downloadable content.

[Delive]

getting Transformers on Blu-Ray for my B-day in early 2009.

[shysun]

NOOOOOOOOOOOOOOO...oh wait thats a Steven film.YAY!!!

[Delive]

He is an executive producer. I don't know if this counts. The way it sounds for now, no Blu-Ray Transformers for a while. Their loss, I'll have to settle for FF:Rise of the Silver Surfer.

[solidt12]

Oh well I will just buy Transformers on DVD and upscale on my PS3. No big deal. Better yet rent it and do what i please with it then send it back. Ha ha ha ha

[solidt12]

Steven said screw that Paramount, My movies are going on all formats.

[sajj316]

Did Spielberg know about this deal and put a full-stop on his movies? I'm sure if more directors knew about this there would have been tons of backlash. Look at Michael Bay... You think this guy would have sit on it during the deal process?

Anyway, pledging support is different than buying support. Whatever floats your boat. If you need to buy your way into a win, so be it.

I love Transformers so much but I also don't respect this deal. I will not be getting Transformers on DVD or HD DVD. I will wait for it on Blue ray and believe you me .. It will. The backlash has just started.

If you can proove to me that the BDA (Blue ray association) paid for exclusives, I'll take it all back. Remember, I said proof, not speculation. It seems we do that a lot here at N4G.

[shysun]

but the EP of transformers is SS...so does that count as one of his films?

[sajj316]

so Transformers is going only on HD DVD. Only SS directed films are multiformat

[ericnellie]

Come on, what do you guys expect! Sometimes in the business world you have to go with "by any means necessary"! It sucks for us blu-ray supporters though and Paramont Studios are as much to blame as the HD DVD folks. It was there choice to except the money!

[Bloodmask]

You guys don't ever think things through. Like the fact if HDDVD really does come out with cheap HDDVD players this Christmas and Paramount does end up selling a lot of HDDVDs they might want to stick with Toshiba. Or Toshiba just simply might pay them again.

Not to mention that if consumers do start buying the PS3 only for movies.(Which a lot of people might have already}. It gives PS3 a crap games attach rate just like the Wii.

Which means that developers won't support it as much such as EA. And you will keep getting hand me down subpar games with crappy framerates.

I wish you fanboys would make up your mind. When it comes to the format war PS3 is a Bluray player. But when it comes to gaming topics Bluray is just for games, and Sony didn't use it to win the format war.

Kind of funny, eh??

[Rageanitus]

how is blu-ray only for games, when blu-ray media sales have been surpassing hd-dvd sales .

Btw the cheap blu-ray players are coming also.

The reason why the attach rate is low on the ps3 now is because its a 9 month old system, just look how your precious xbox started, ppl were raving about games like bejeweled and perfect dark haha

[sajj316]

You didn't think your response through. A good portion of PS3 owners do not even know that they have a Blue ray player. Even with that fact, the ones that do know buy a good amount of Blue ray titles. I'll state the obvious that Blue ray is synonomous with the the PS3.

Approx 30K/per week PS3 are sold per week. How do you stop that? If you want to stop Blue ray, you have to stop the PS3. Its quite a simple formula. This is why the HD DVD group wasted 150 million.

[Snake_Doctor]

"Not to mention that if consumers do start buying the PS3 only for movies.(Which a lot of people might have already}. It gives PS3 a crap games attach rate just like the Wii."

Did the PS2 have a crappy attach rate due to DVD? I don't think it will continue to have a low attach rate when BR players drop to 100+ less than the PS3 (I'm thinking Christmas approx $300) , but thats just my opinion.

Anyway not a bad move by HD-DVD they needed an infusion of life and this may help. What is the upcoming line-up?

[Bathyj]

Bloodmask, you're actually talking now like a human being and trying to make a point without trolling or flaming, so I'll do you the curtesy of replying likewise and not insulting you or anything. (who knows, keep this sort of sensible dialogue up and we could start a trend.)

No one ever said BR was just for Games, or just for movies. Thats the beauty of it. You get the whole package. You buy it for games, because thats what PS3 games come on. You choose to buy movies if you like and most people do because you already have everything you need. No extras needed. And alot of people might not have gotten into HD movies if not for PS3. We'd still be on DVD so its a good way to get into it. Also PS3 owners probably buy more HD movies than anyone, and Paramount are turning their back on them, prolonging the war just for their own short term gain. I dont deny its not a good payoff for them. Its just sucks for the HD movie industry because they are never going to grow to real numbers until one is gone. Too many fence sitters are still waiting to jump in and this will just hold them back longer. Still, I see BR growing, simply because PS3 will keep growing. Neither will go anywhere.

As for EA, I dont like to believe its true but either Peter Moore is steering the company to focus on Xbox based on his own personal prioreties, (a horrible thought which I dont really believe, at least not as the full reason) or more likely EA are simply going water and seeking the path of least resistance. Taking the easier route and catering to the bigger userbase. This is a bit less despicable but still not great morally in my book. If they are simply gonna do a half arsed job on everything PS3 and not giving it the attention it deserves, they might as well just go exclusive to Xbox, cos who wants one of their games when we know they've put about 50% effort into it. Theres certainly no game EA make that I have to have if it gonna be half of what it should. Others might disagree and have to buy Madden or Fifa every year. I could care less. If they're gonna do it at all on PS3 they should do it right, especially when it reflects on the hardware and the ill-informed start thinking thats the best that can be done. C'mon, you dont like Sony, but you know thats not true. A 1080p sports game @ 60fps should be achievable for a company with EA's resources. If they continue to put out crap next year Sony might have to step in and not let them release it. Nintendo had a quality policy, Sony shouldn't have to let crap on their system from someone whos supposed to be one of the worlds premier games makers. Anyway, I've a feeling it might not be an issue next year. Not only will they have had more time on PS3, but the userbase will be significantly bigger too, and that means more potential sales, and in the end, thats all EA is about.

[Wolfgang187]

Losing michael bay for any movie is bad, but no bay for Transformers 2? Bet theyre feeling kinda silly right about now.

[shysun]

Bay isn't doing T2?WTF...did I miss something?

[Crazyglues]

Wow... this war just got Ugly..

[Pika-pie]

Very annoying..
But at least its not a permanant deal.

[Dreamworker]

until Disney jumps ship.

[THE_JUDGE]

People only jump ship when they are losing. It's blu-ray 2:1 you tool, hd-dvd is losing. Please be quiet.

[THE_JUDGE]

I hope Viacom like losing money because I doubt that the 150 million would out way the sales of movies on Blu-ray.

[Dreamworker]

having money invested in disney shares. They don't care where the money comes from blu- ray or HD-DVD they take it all.

[jwatt]

You got 18 months, Paramount then you come back to Blu-Ray.

[Bathyj]

Its disappointing, but if you need to find a plus side, it seems the end of the war might have a date now.

[Pika-pie]

The next best thing:-

http://www.play.com/DVD/Blu...

[Makidian]

Hopefully that's legit because this whole thing makes me sick. It's bad enough Universal hasn't come over yet but the fact Paramount jumped ship for chump change and haven't realized that they will lose money is just retarded. Hopefully Steven S. will have enough pull as a producer that he can kepp Transformers a multi release.

[ghettocheeze]

Nice to see HD-DVD get some love but still the big heavy hitters are coming on Blu-Ray this fall. Transformers was nice but nothing close to box office record shattering giants like Spidey and Captain Jack. Paramount will probably end up releasing all these exclusive once the 18 month agreement is over. By that time PS3 install base will be around 20 million and no way any studio can ignore the potential of such a big market.

[Universal 08]

Fox New Confirms $500M Pay-off to NY Times, exclusive deal to last 2 weeks.

[Maddens Raiders]

Payoffs for games, payoffs for support and Payoffs for reviews one way or the other. The games/media war is like watching Congress operate on a daily basis. Just goes to show how much money these corporations have on deck in order to throw money at a Filmhouse just garner support in the "public's eyes". Incredible.

All part of secret handshakes and backroom deals that get little people like us worked into a fever pitch. Of course I never get worked up into a fever pitch. :P

Fuggettaboutit.

[cr33ping_death]

so hd dvd will be on life support for 18 months......i say pull the feeding tube and let it pass.

[cr33ping_death]

curse you double post.!!!!!

[mariusmal]

i dont know about the USA. but in europe this kind of moves are illegal. considered monopoly. correct me if im wrong.

[BIadestarX]

What's the big deal Paramount is getting paid to support HD DVD?
can you prove that Blu-ray didnt give any insentives to supporting blu-ray exclusive studios? Why would anyone go through the trouble of releasing games for less than a 1% movie market?

The only logical reason to release movies for anything other than standard DVD is if you are going to get money. The HD sells are too low to make it worth the trouble. And that's how is going to be until the mass market first 1) Most people own HD TVs, 2) Most People own an HD Player.

Movies studios can safely not be involved in HD movies for a while and it will not hurt them. They can wait until one of the formats wins... before making the investment. It's not like if Transformers does not come on HD they will have finantial problems. People will go to the theatre, people will buy the DVD disk.

So, what's so wrong about a studio to let the companies responsible spend the money on making and distributing the materials hey may not make their money back on do the paying?

I see some of you kids commenting, "It's blu-ray 2:1"... sounds big when you put it that way.. ehh? How about when you put it next to DVD... 99:1... how does it look? Blu-ray winning 2:1 does not mean anything... A store can say they are selling blu-ray 2:1... but big deal if blu-ray only sold 4 copies and HD DVD sold 2.

Time will tell. You Sony fans are very confident that blu-ray will win and that HD DVD has no chance. so, what are you worring about? This deal should have no effect on blu-ray sells... right? Blu-ray is the future and there is no way it can lose... right? No need to be mad. Or you are starting to have doubts?

[Charlie2688]

HDDVD continue to amaze me, they keep saying that they are not in a competition , not in a war...but they have to PAY 150mil for life support >.>