Is it me, or Katzenberg is not the one who's wrong?

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You know.... DreamWorks CEO Jeffrey Katzenberg is one of those guys who just makes you scratch your head and wonder. Back in March of 2007, he had this to say on the subject of high-def discs to Variety: "Blu-ray and HD-DVD are a niche business. They're not going to become the next platform. I think for the general consumer, there is not a big enough delta between the standard DVD in terms of where it is today and the next generation." But then in August, his company takes a widely reported $100 million offer from Toshiba to abandon Blu-ray and go HD-DVD exclusive. Paramount is said to have accepted $50 million to do the same. Disney's Bob Iger called foul to the Hollywood Reporter, saying: "Those studios are largely taking easy money, and it will cost them in the future." At the time, Katzenberg basically side-stepped the payment issue by suggesting that the Blu-ray studios were compensated for their support of that format too: "It's somewhat disingenuous for other companies to suggest that they were not compensated for endorsing Blu-ray." Which Iger proceeded to deny outright at an investor's conference: "We haven't taken any money because we think it's far and away the best business. I think it's a foregone conclusion about which [format] will win." Turns out Iger was right. DreamWorks proceeded to release only a handful of HD-DVD exclusive titles, none of which had much of an impact on Blu-ray's software sales momentum. Then Warner went Blu at CES. Every major video industry retailer went Blu within a month thereafter. Microsoft bailed on HD-DVD. Finally Toshiba officially threw in the towel on the HD-DVD format a little over a week ago, and both Universal and Paramount have announced their intention to support Blu-ray in the near future.

But now, just yesterday, DreamWorks' Katzenberg has reportedly said that his company is still locked into its deal to distribute movies on HD-DVD: "We have a partnership with Toshiba and have an obligation to see this through. 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." Either Katzenberg is COMPLETELY out of touch with reality... and DreamWorks has the worst contract lawyers in Hollywood... or he's posturing for some reason. So what's really going on here?

Here's our take: He's posturing. Take this as VERY Rumor Mill-worthy, but here's what our industry sources are suggesting is happening behind-the-scenes. Very reliable sources are telling us that DreamWorks is currently authoring and replicating multiple new titles on the Blu-ray format for release in the coming months, including Bee Movie. They're also working on an official announcement of Blu-ray support. So why the new comments from Katzenberg? Well, our sources are hinting that as of the day Toshiba threw in the towel, DreamWorks and Paramount hadn't yet been paid the full $150 million they were promised for abandoning Blu-ray and supporting HD-DVD exclusively (it's generally standard practice in a deal like this for payments to be made in installments over the life of the deal, as various contractual milestones are reached). Both studios are reportedly negotiating with Toshiba as to just how much of the still unpaid amount they'll receive for having remained loyal to the end. That's why neither studio has officially announced new Blu-ray titles yet, and that's why Katzenberg is still talking about DreamWorks' loyalty to Toshiba. Having taken a big PR hit with Blu-ray fans for abandoning the format last year, DreamWorks and Paramount want to at least get as much of the promised payment from Toshiba too. As soon as this issue is sorted out however - and our sources say all parties are close to agreeing on a final amount - you'll see both Paramount and DreamWorks start announcing new Blu-ray titles.

Anyway, with a little luck, all this confusion will be cleared up in the next few weeks. So just be patient in the meantime. Hey, we've been saying all along that this format war was all about the benjamins. It's perhaps only fitting that the end of it is all about 'em too.

First, the above is from TheDigitalBits.com. Format war aside, can you see how weird the whole thing reads? I mean, you start attacking a person because of a format, then you continue attacking the format...and now that the writer lost us, he actually gets something right on the 3rd paragraph (well, the whole paragraph).

Can you see how a 'twist' in the begining can ruin the whole thing? How trying to get one's biased opinion can ruin the whole objectivity?

Again, this is for all of you who still don't realize how many times one can be lured by the media...and honestly, it's great that this site doesn't do anything like that. Thanks!

Well it's very interesting to say the least. Although I think Bill Hunt is a little bit of a nutter in his enthusiasm, I have to say nearly everything on his "rumor mill" and every prediction he's made has come true. He's like the opposite of Rob Enderle. Because of Hunt's track record, I tend to listen.

Skyhawk is right, everything Rob Enderle says is the opposite. If he was to forcast 90 degree heat better get your snow boats, heavy jacket, gloves, and shovel ready.

The funny but predictable thing now is Tony, Rob Enderle has gone on the HD DVD fanboy wagon of predicting that the digital rental forms of VOD/downloads will kill off the Blu-ray format. Although I can see other forms of rentals taking business away from traditional B&M rental businesses, how can this affect media consumer purchases?

Someone on this site recently said that humans have an innate need to collect things, and that's true. We are wired by evolution to be pack rats. Collecting "stuff" has had survival advantages and thus has attracted mates and helped our ability to pass on our genetic code since the dawn of humanity.

History has shown that the buying of media has had the opposite effect. It has taken away from rental businesses. I remember when VHS/BETA was purely a rental business. Even in our little suburb of this little city, the rental stores were HUGE and everywhere back in those days. They had popcorn and toys for the kids when you walked in. They even made it like a movie theater with the rope thingies and everything! Does anyone remember this? When those $60 VHS tapes were replaced by DVD, suddenly people started to collect... and I mean even your average guy when the prices began to get below $30 a movie. Those rental stores started to close all over the place. And now the relatively few rental stores also sell movies, or are associated with your cable or other media outlet and offering other rental options.

Whatever new technology brings us, it has to appeal to our most basic human nature and primal needs.

First thing first, The Digital Bits needs to be re-named the Blu-Bits. FACT: Bill Hunt is Blu-Tool.

QUESTION: Katzenberg either knows something positive about the HD DVD Forum's Future Plans that we don't know, has just realized he is caught up in a legal snafu with Dreamworks/Paramount's HD DVD Exclusivity Agreements, or is completely off of his Psych meds and needs to be checked into the hospital for some electro-shock treatments.

Everybody has commented about the Paramount/Dreamworks "opt-out" clause in their dealings with Toshiba and the HD DVD Promotional Organization, but what if there was no opt-out clause, or if they had to exercise it within 30 days of Warner's defection, and didn't choose the option in time.

Toshiba only decided to stop manufacturing HD DVD players, the HD DVD Promotional Organization has given up NOTHING AS OF YET.

Sony could start making HD DVD players tomorrow for all anyone knows.


OK, ROTFLMAO, I had to throw a funny one in there, sorry. lol

Paramount has already announced a planed Neutral stance, but does/did their HD DVD Exclusivity deal belong to Toshiba or the HD DVD Promotional Organization???

Has anyone confirmed that Paramount/Dreamworks has actually been let out of the deal yet???

Possibly there is some legal wrangling still going on as to getting out of that agreement, and Jeff Katzenberg can't comment further because his name is on the HD DVD Exclusivity deal, and until his lawyers can spin their way out of the contract, he is still stuck in the Red Camp.

Something does seem amiss here, we are just going to have to wait for an "OFFICIAL" Press Release or a Retraction/Clarification of Katzenberg's comments.

Hopefully they won't drag this out for another week, and there will be some further announcement shortly as to what exactly is going on behind the scenes.

There is enough back room dealing in this whole format war to write several books on, maybe worthy of a movie deal as well.

Hopefully a movie by an Independent Film company, and only released on SD DVD to keep things fair.

"It really is in their court at this point to really declare what the next step will be," explained Katzenberg. "We're poised either way to jump into the marketplace when the conditions are right to do so."

Err... doesn't that just say everything you really need to know? Good grief, it's not like you have to read between the lines VideoCipher.

Well, I kinda posted this for people to realize that sometimes being 'hardcore fan' can hurt your objectivity, and how since you tend to be biased or lean for a side, you won't really take it for real...

Oh, and yes, it should've been renamed the blu-bits a while ago...

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It really is in their court at this point to really declare what the next step will be," explained Katzenberg. "We're poised either way to jump into the marketplace when the conditions are right to do so

OK, I will read between the lines there, that statement tells me that they are still under an HD DVD Exclusivity Contract, and they need the HD DVD Promotional Organization and/or Toshiba to let them out of it.

There evidently was no escape clause, as least in the Dreamworks contract, or they would not be waiting for Toshiba's decision on what direction to go.

That is right out of Jeff Katzenberg's mouth, TOSHIBA STILL IS IN CONTROL AND WE WILL DO WHAT THEY TELL US TO DO.

WOW, What a Mindjob that has to be.

Do any of those conditions apply to Paramount as well??

Dreamworks AND Paramount are both owned by VIACOM, did they both sign similar HD DVD Exclusivity Agreements??

Paramount has already commented that they will start releases on BLU, but will that actually have them end up in Court, and/or costing them a small fortune??

What is the forfeiture price if Dreamworks or Paramount break their Exclusivity deals early??

If Toshiba has given up on the HD DVD hardware business, but still chooses to retain HD DVD Exclusive studio support, does that mean that we have gone from Format War, to Format Skirmish??

Maybe they can force $ony's hand into knocking another few Hundred Million $$$ off of their asking price for their Cell Processor FAB plants in Japan, or remain a Thorn in $ony's side for the remainder of 2008.

So lets find out if Toshiba is still playing a smarter game, or Paramount/Dreamworks has Dumb Lawyers that forgot to include an escape clause.

Oh the Irony in that one, Toshiba manufactures the Cell Processor, the Heart and Soul of the Sony P$3, it would be only right( ) for Toshiba to force $ony to pay off their losses in the HD DVD business.

It's actually "Dreamworks Animation", which is a separate corporate entity and would be under it's own contract. "Dreamworks" has already switched over.

If the money in installments was greater than what Dreamworks Animation thought they would make by releasing Blu-ray movies, why bother switching? They're probably waiting for Warner to kick them off the contract!

You may consider Bill Hunt a paid BDA/Sony shill, but you have to admit that little of even the wildest stuff he's published has turned out wrong. Perhaps he's just a smart or lucky shill

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But now, just yesterday, DreamWorks' Katzenberg has reportedly said that his company is still locked into its deal to distribute movies on HD-DVD

If Dreamworks Animation is distributed through Paramount, then how would they hold any influence over Paramount as to the format they are distributing their films in.

Is this an indication that Paramount would certainly continue to be releasing films on HD DVD, even if it is only the Dreamworks Animation pictures??

Is Paramount still some way locked into a HD DVD exclusive contract as well??

Paramount admits they will be releasing Blu titles in the future, but is that next month, or next year??

Nothing rules out the possibility that they will go Blu, but at least have to remain Format Neutral until the end of the year.

I am figuring on another press release in the next week or two that details more of the insider picture of who is under contract, and for what terms.



This would make for fascinating reading if someone was able to publish a book about what each studio was paid, by who, and what the terms of the agreements were.

Speaking of Jeffrey Katzenberg, this was on IMDB.com yesterday...

Shrek a Green Monster for DreamWorks Animation

Shrek the Third was just what it took to put DreamWorks Animation back in the green again. DVD sales of the animated sequel accounted for $179.4 million in revenue during the fourth quarter. Total revenue rose to $290.2 million with net income of $94.1 million. It was, said CEO Jeffrey Katzenberg, "DreamWorks Animation's most successful year since going public." Comparison with the year-earlier results was difficult since the studio wrote down $109 million following disappointing ticket sales for its 2006 feature, Flushed Away.

http://www.imdb.com/news/sb/2008-02-27/

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If the money in installments was greater than what Dreamworks Animation thought they would make by releasing Blu-ray movies, why bother switching?

That makes a lot of sense - any opt-out option would probably be at DreamWorks Animation's sole discretion to exercise, so they could wait it out and collect their HD-DVD incentives, and still get the money from Blu-ray releases by just waiting a little bit longer to release them. Not a bad deal at all.