Text 7564, 71 rader
Skriven 2005-10-08 12:22:12 av Mike '/m' (1:379/45)
Ärende: Daggers Drawn Over DVDs
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From: Mike '/m' <mike@barkto.com>

http://www.businessweek.com/print/technology/content/oct2005/tc2005106_9074_tc0
24.htm?chan=tc


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How Sony gained an edge in its fierce battle with Microsoft over video formats

Every July, 400 of the most powerful media and tech industry chieftains meet at
investment banker Herb Allen's conference in Sun Valley, Idaho, for what are
usually convivial discussions of megatrends and megamergers. But this year,
Microsoft (MSFT ) Chairman Bill Gates III laid into Sony (SNE ) Chief Executive
Howard Stringer, according to two sources, including one who witnessed the
exchange in a private room.

Gates argued that Sony's new high-definition DVD standard, called Blu-ray,
needed to be changed so it would work smoothly with personal computers running
on Microsoft's Windows operating system. Stringer and two lieutenants defended
the technology, insisting Blu-ray would work fine in PCs.

Yet Gates's ire only grew. "There must be something much deeper going on,"
Stringer said later, according to another person who heard the comment. A
Microsoft spokesman acknowledges that Gates and Stringer talked at the
conference, but says things did not become "heated."

Gates's efforts to derail Stringer's plans soon became public, though. On Sept.
27, Microsoft and Intel (INTL ) fired a broadside at Sony, suggesting publicly
the company's Blu-ray technology couldn't deliver what it promised, and they
pledged their support for a rival technology from Toshiba (TOSBF ).

CRITICAL MASS.  The news touched off a torrent of recriminations and
finger-pointing. Several movie studios quickly voiced their support for Sony.
Two major Chinese DVD makers backed the Toshiba standard, which is called HD
DVD. And Dell (DELL ) and Hewlett-Packard (HPQ ) took the highly unusual step
of issuing a joint statement denouncing the move by Microsoft and Intel, the PC
makers' two most important suppliers. "Desperation" is the way Brian Zucker, a
technology strategist at Dell, characterized Microsoft's move.

It may amount to little more than that. Despite the backing of the PC
industry's two biggest titans, it looks as if HD DVD's days are numbered.

Sony is lining up strong support among Hollywood studios as well as other
consumer-electronics companies. On Oct. 3, Paramount Pictures (VIA
) announced it would end exclusive support of HD DVD and support both
standards. Warner Bros. (TWX ) is expected to follow suit in the next few days,
sources say (see BW Online, 10/5/05, "A Warner Bros. Green Light for
Blu-ray?"). That will give Sony six of the seven major studios. Sony may
negotiate a deal to give a slice of Blu-ray royalties to Toshiba, and perhaps
even Microsoft, but that would largely be a face-saving compromise. Sony
appears to have a critical mass of support for its standard.

BITTER FEUD.  A major factor swaying these companies is Blu-ray's massive
capacity. Its disks will hold at least 50 gigabytes and perhaps 100 gigs or
more. HD DVD will start at 15 gigs, and top out at 45. "We want a standard
that's going to be around for 10 or 15 years," says one studio exec.

Microsoft's criticism is that Blu-ray disks will be more expensive to
manufacture and may be impossible to make in large volumes. Yet the
technology's supporters are convinced costs will be similar over the long term.
"We don't see any big cost difference, and we know a thing or two about volume
manufacturing," says Michael Dell, chairman of PC giant Dell....
===

Maybe Gates and Ballmer need to take some anger management courses.....


 /m

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