Sony may have won the high-definition format war of Blu-ray vs. HD-DVD, but it came at a price — and a rather hefty one, at that. $400 million, to be precise.
According to an article in the Globe and Mail, Sony paid Warner Bros. $400 million to entice the movie studio to embrace the Blu-ray Disc format exclusively and abandon HD-DVD. The decision was the first, but not final, nail in the coffin for HD-DVD as a format, and it vaulted Blu-ray into the lead for good, now that Toshiba has announced it will no longer manufacture HD-DVD players.
It’s not unheard of for a technology company such as Sony to purchase another company’s allegiance. In fact, Paramount reportedly accepted millions of dollars from Toshiba and Microsoft to exclusively support HD-DVD late in 2007, an investment that was ultimately undone by Toshiba’s own decision earlier this week to abandon its own format.
Even so, $400 million is a significant sum, particularly if it was an actual payout rather than just “promised royalties.” However, with Blu-ray being Sony’s proprietary format, Sony stands to make millions, if not billions more, even after the reported Warner Bros. payout (which neither Sony nor Warner has confirmed, by the way).
The article in the Globe and Mail has additional context about Sony’s incentive to see Blu-ray succeed, not the least of which was old-fashioned pride after Betamax lost out to VHS. If you’re interested in the high-definition battle, the article is definitely worth the read.