Looks like Paramount has an out clause (1 Viewer)

[Paul.S]

I agree re closure.

It looks like there's been an unfortunate relaxing of the ""war" talk is limited to the two threads" policy in the wake of the Warner shift. Word of this piece should have gone in the studio support thread.

 

[Adam Gregorich]

I wouldn't say that there has been a relaxing of the "war talk". Those threads were designed for a "My format is better than your format because..." back and forth. In this instance discussing this specific article (or the WB switch) are worthly of their own threads for the short term. I would actually like to commened everyone for how civil they have been. I do agree that no one knows what Paramount will do and this is article/thread just pure speculation until they decide. Since the thread has stayed on that specific topic for two pages I see no reason to close it at this time. I have no problem if another moderator feels otherwise and elects to close it.

 

[Cees Alons]

They're certainly right. Almost all contracts (probably all) contain a way out. The simplest form being something like "This contract can be ended prematurely on a unanimous decision of all parties involved...".

Often it will also state conditions that would allow one or more (if applicable) of the parties to end it, in which case other conditions will be stipulated (period, way of notifying the other party (parties), indemnity - amount or the way to establish it, etc).

So the question wouldn't be "is that story true", but "would Paramount want to exercise it" (given all consequences). Also, for these reasons it would cost Toshiba substantially less to keep Paramount in than to get Warner to one side.

But the other question is: what's Toshiba going to do about the whole situation? I think perhaps they would be talking to the BDA as well soon - who might also be very willing to talk with the other side.

Time will tell.


Cees

 

[Brandon Conway]

Paramount is apparently prepping some kind of announcement according to my co-worker at CES, so it may get rather interesting in the next few hours....

 

[Sanjay Gupta]

'Contract Law' requires all contracts to provide for an escape clause. Any contract that does not provide for an escape clause, is in itself 'null & void' if challenged in court.

 

[Dave H]

Guys, the writing is on the wall. Paramount and Universal will be going Blu exclusive soon. Everyone wants this format war to end - and quickly!

 

[Dave H]

Yes, I've just heard something pretty similar.

 

[Adam Gregorich]

Then what is the point of having a contract if there is always an out? Some contracts have them (and I am sure Paramount's does), but it is not a universal requirement to have an escape clause in a contract.

 

[Paul.S]

That's my understanding as well, AG: it's not a tenet of con law that all contracts have escape language (maybe Damin Toell will drop in; he's a JD). But to the extent there is an escape provision, there are likely also penalties for early termination (likely money "damages" that must be paid). Even if there is no such language, that's likely the way the matter would be resolved.

The more interesting, larger question is what happens if Tosh throws in the towel on the format. What obligations, if any, do member/supporting studio have in that scenario?

On that note, it's curious to me that Tosh did a press release today touting their (months-old) third gen player slate. Adam, were there originally plans to introduce fourth gen machines at CES?

 

[Cees Alons]

I agree. No properly made contract should have an escape. That would render it weak and useless.
But it generally states the conditions under which it can be ended. Usually rather tough conditions for each of the sides if they would want to do it alone (without the other party's prior consent).


Cees

 

[Dan_Ohio]

When looking at this, we need to look at the motives of each side. 1) HD-DVD really wanted Paramount/Dreamworks. They were not holding the cards. They did not think their format would be on the losing side. 2) Paramount didn't see many sales but probably wanted to cover all their bases.
With these motives, I doubt there is any payback to HD-DVD. I believe some of the agreement included promotional rights. Paramount, like any company, is looking to see what more money or promotional dollars they can get out of the deal. But in the end the retailers and consumers will force them to switch and they know it. So it what you can now.

Isn't this what Warner was hoping would happen. A quick end to the two formats.

 

[andrew markworthy]

Almost certainly, yes. It would be pretty dumb to pull out of a market that still had life left in it. And much as it grieves me to say it (though purple, I'd hoped HD would win, if only because it didn't enthusiastically embrace regional coding as an essential pre-requisite) I hope it is a quick end. A long death rattle will do nothing but harm.

 

[Paul.S]

Andrew:

Oh, I'm listening--I just disagree. Your insistence on looking at this through a provincial lens and the patronizing, arrogant intimation that (only) you know "the score" and anyone with a different perspective is not worth discussing the matter with are . . . very British.

"[H]ow British journalism works" has nothing to do with my basic point: escape provisions are not uncommon; their existence alone is not dispositive of a party to a contract being "poised" to exercise them; no one outside the inner sanctums knows "the score" for sure; and that Par will deny that their position has changed, until they perhaps suddenly announce to the contrary in a typical corporate move.

If you don't understand that that last element in particular is indeed skeptical/critical and not at all the byproduct of Par's "publicity machine," then we/you are indeed having a communication disconnect.

 

[andrew markworthy]

I presume that along with good spelling, the phrase 'the pot calling the kettle black' never reached the USA? Have a nice day.

Note to Moderators - we're having fun, don't take this as a bad-tempered argument. I promise I'll stop sniping now and I'm sure Paul will do the same.

 

[Averry]

The main question is, why would Toshiba drag this thing out?


They might as well let Paramount go. What's the point, they don't stand to make any more money.


I know I'm not gonna buy any more HD-DVDs unless I can snag them for cheap. It saddens me, but I don't see the point.

 

[Adam Gregorich]

A couple of ideas from a quick brainstorm: HD DVD will out number BD drives in PCs ths year. Maybe they feel that HD DVD could exsist for a purpose other than studio movies. By threatening to still drag things out they could get some concessions from the BDA like a piece of the patent pool, the ability to make players royalty free for two years, etc. They could know something we don't know, etc.

 

[Ray Chuang]

I think both NBC Universal and Paramount are waiting for no less than Toshiba themselves to do some sort of graceful exit of the HD-DVD format.

In fact, especially in light of comments from no less than Microsoft that they could foresee the Xbox 360 getting Blu-ray support if the demand is there, I actually expect Toshiba to make an announcement by April 2008 that they will begin the phase-out of the HD-DVD format in favor of Blu-ray format. Toshiba will then offer a lower-cost combo player that will be HD-DVD and Blu-ray Profile 1.1 compliant as a transitional product until Toshiba starts manufacturing their own Blu-ray Profile 1.1 and 2.0 players starting late 2008 or early 2009.

 

[DaViD Boulet]

Possible. But I think that the computer industry will probably move to BD as well given that the "technical advantages" of BD really do make an enormous difference from the PC-side of things (space and bandwidth). But maybe dual-format drives? It will be interesting to see.

 

[Mikah Cerucco]

A combo drive is way more complex than a standalone drive, and thus likely wouldn't come first.

 

[Dave H]

That's what I was thinking.