Microsoft to pay up to OEMs for using HD DVD

Microsoft must apparently have a lot more at stake in the success of HD DVD than we realized, since apparently they're said to be offering up "coupons" -- or certain cash incentives -- to manufacturers who use HD DVD drives in their future machines. According to the EE Times, Microsoft is also making HD DVD support "free" in Vista, whereas they could be passing along up to a $30 charge in licensing for Blu-ray support. That drive support licensing figure might sound a little unfair, granted, but remember that Microsoft does have an extensive, long standing intellectual property licensing partnership with Toshiba, which could well entitle them to access HD DVD technology, whereas other companies might have to pay for up for the very same. (For example, if Microsoft didn't have that partnership, they might well have to pony up that $30 licensing fee for both formats, not just Blu-ray.) It's all a bit cyclical when it comes to the chicken-and-egg partnering/licensing angle though (and we'll refrain from using the M-word for now), but one thing's for sure, a "coupon" to incentivize HD DVD adoption on the part of OEMs is very unsettling at best, and it sounds like Microsoft isn't about to just lie down and let the forthcoming format war sort itself out.

[Via CNET, thanks BK]

[OffTopic Man @ Dec 29th 2005 7:42PM]

Sounds like someone is really scared of a little competition.

[Peter @ Dec 29th 2005 7:49PM]

It's the Blu-Ray licensing group, not Microsoft, that's charging $30 per Blu-Ray device. This is what this format war has been all about; not which one is technically superior, better for the consumer or more flexible but which one will reap more royalties.

[Heinrich @ Dec 29th 2005 7:59PM]

the br-foundation is going to file a lawsuit against m$ for using it's win-monopoly.

[Andrew D'Amico @ Dec 29th 2005 8:12PM]

They got to do whatever it takes to keep PS3, er Blu-ray, down...

[Sean @ Dec 29th 2005 8:23PM]

If they wanted to really make HD-DVD the front runner and a more attractive deal to OEMs why didn't they release the 360 with a HD-DVD drive?

[Pete @ Dec 29th 2005 8:27PM]

Evan, have you or any of the other staff members of Engadget been drinking while posting? Some of the posts lately have been very difficult to read. "A "coupon" incentivize HD DVD adoption?" WTF???

[Al Scagnetti @ Dec 29th 2005 8:57PM]

Oddly, I'm glad to hear about this sort of strong-arm tactics - regardless of who's applying them. It might just be worth it to all of us in the long run even if it just *appears* that a giant like M$ is leaning towards HD-DVD. I'd rather be coaxed into one format than flip-flop between the two for the next couple of years.

[Tony @ Dec 29th 2005 8:57PM]

Wow, im about to make a bold statement, Microsoft is the anti-christ! They got to much money to play with. This is getting out of hand. There losing money on ever xbox made, losing billions, investing in the xbox. In there view, they will do anything, be it underground mayhem, or pulling a stunt like this, just to protect there billion dallor investments. Ive seen it all. This is what there afraid of, because they will be from two directions, 1. if ps3 wins console wars. and 2. if blu-ray also wins cuzz of ps3 kick start, and microsoft hd-dvd investment goes bye bye. So at this point in time there pretty desperate. Who knows what will happen. Anything can at this point..

[Tony @ Dec 29th 2005 9:10PM]

woops my bad



"This is what there afraid of, because they will be "screwed" from two directions"

My bad :)

[Jason @ Dec 29th 2005 9:27PM]

MS can act as tough as they like but it's going to be tough to hold Blu-Ray down.



Think of the millions of PS3s that will be sold this year and hooked up to shiny HDTVs...



Sony will almost certainly include a demo disc that shows off what Blu-Ray movies will look like and as a result many consumers will run out and purchase a few of the initial Blu-ray movie offerings.



Once the avalanche starts, there won't be any stopping it.

[EatingPie @ Dec 29th 2005 9:29PM]

#2 - Yeah it's $30.00 licensing per player. I know DVD has a high per-player fee ($10-$20?), so this isn't exhorbitant. It's more that Microsoft's coupons will create a $30 DIFFERENCE.



Microsoft DOES care about royalties, but NOT about player royalties.



Microsoft cares about the WMV-HD royalties that they will make PER DISC shot out in that format. That is where the money is -- even with today's DVD, it's in the disc, not the players.



While BD also supports WMV-HD, with HD-DVD, the capacity is too small to use anything but WMV (H264 yes, but WMV has a lower royalty). I'm guessing that Microsoft is backing the lower-capacity format because it will all but require WMV-HD, and provide a bigger payoff.



-Pie

[Bloo @ Dec 29th 2005 9:46PM]

HD DVD drives weren't ready when the 360 came out. It's still not ready. Same with Blu-Ray. There's some issues being worked out in both camps.



This article is intersting in the respect that Sony could be subsidizing Blu-Ray by selling the PS3 with a Blu-Ray drive under what stand alone Blu-Ray players may cost. Advantage: Sony



So in turn, Microsoft may be offering incentives for HD DVD, when installed in a computer. Advantage: Microsoft, especially considering there are far more PCs in the world than game consoles.



Sounds like a competition to me.



Hopefully this will benefit the consumer as the two go to war trying to undercut one another.

[MN @ Dec 29th 2005 11:02PM]

It makes sense for the winner to be Blu-Ray, because all this jerkin between supporters is giving me blu

O

[carol79 @ Dec 29th 2005 11:11PM]

Sony is known for its strict licensing politic when it comes to proprietary formats. See memory stick. Mini Dics. Microsoft is making sure the next gen format is open to more than one manfracturer.

[Steve Rhodes @ Dec 29th 2005 11:19PM]

Microsoft should be careful. Even though the Bush Justice Dept probably wouldn't go after them, Europe is another story.



And I want the better format to win, not the one Microsoft pushes.

[Woolly Mittens @ Dec 30th 2005 12:32AM]

It's very worrying that, even after being convicted on all major continents for anti competative behaviour, Microsoft is *still* allowed to use their wallet as a battering-ram.

[Eric @ Dec 30th 2005 1:07AM]

So everyone who is anti Microsoft for supporting HD DVD is all for Sony "Root-kit" Blu-Ray DVD format that, I'm guessing, if you want to play it on anything but a standard Blu-Ray DVD Player connected to your TV will force you to pony up some more money. I want a format to purchase the movie on that I can do with as I please for my own personal use, whether it be watching on my TV or playing on my laptop from the hard drive or watching it on a personal video player. Sony's format is locked down. Yea, it'll likely be hacked, but I shouldn't have to resort to hacking to use something I bought. From what I've read, HD DVD is a lot more "useable". Buy the disc, rip it onto my network storage in the basement and watch it on anything in the house or drop it onto a video iPod like device to watch somewhere else. I got stung by Sony's CD format, I don't want to be strong-armed into their DVD format.

[Ian @ Dec 30th 2005 2:08AM]

ANYTHING that keeps Sony from winning is a plus in my mind. I don't care if it's wrong or bad of Microsoft. MS is the lesser of two evils IMO. **** Sony.

[Brandon @ Dec 30th 2005 2:27AM]

I have to agree with the last poster.



I don't want to be locked into a Sony format after they pulled the rootkit scam.



I'll vote for Microsoft with my wallet.

[ishtar @ Dec 30th 2005 2:29AM]

"...MS is the lesser of two evils IMO."



I would never have thought that I would agree to even some extent with the above statment! ;)

[Atanas Boev @ Dec 30th 2005 4:43AM]

I also agree, Microsoft is lesser of two evils. And till the time HD-DVD capacity is not enough, HD camp will have (won the money to create) newer format.



Also, Microsoft is the lesser bear of two bears ;)

[TheGuyNextDoor @ Dec 30th 2005 7:03AM]

People are forgetting SonyBMG is not the same as Sony Electronics. And more-so, M$ have been slapping DRM systems into your software all over the place and if you don't like them, you'd best steer clear of the next version of Windows, 'cos that pretty much runs on Rights Management.



Anti-Microsoft sentiment seemed to be the only thing that united the world these days, but some people I guess fancy a change of blind-sided sheep opinionism.



And besides, BluRay isn't all about Sony - they are merely the pioneers, so I don't think it's a case of "them winning" (@ #17), look at all the other BluRay companies involved and trying to develop the format:



Maxell

TDK

Verbatim

BenQ

HP

Hitachi

JVC

LG

Mitsubishi

Panasonic

Philips

Pioneer

Samsung

Sharp

Sony

Yamaha

Zenith



to name but a few.

[Klar @ Dec 30th 2005 7:19AM]

Isn't that called bribery? Or, maybe because its Microsoft they can get away with it...



I don't get it.

[de0phob1c @ Dec 30th 2005 4:31PM]

There is no way I'll buy anything from Sony again if I can help it. This Root-kit crap is ridiculous. I'd rather have m$, who tells you before they screw you. At least you know what to expect. Sony is so friggin paranoid that someone will rip them off, so they gotta open people's system up to vulnerabilities, like we don't have enough already. Even if Blu-Ray will rock, it is not the way to go for me. Who is to say that Blu-Ray won't have a rootkit too, maybe a better one? I just plain don't trust Sony at all anymore. I'm sure they won't pay for my hacked PC, once they let the junk in.

[Mario @ Dec 30th 2005 5:42PM]

I have always loved sony for their products but being tide down to one single company to see movies is the dumbest thing in the world, we spend thousands of dollars on HDTV, surround sound's and all those crazy cable's, then we all wait what seem's like a million of years for the new format now we stand here looking to spend more money for what ever company wins the war and could be standing on the wrong side of the wall, come on

SONY two thumbs down.



XBOX 360 is a great product for the lack of HD material and for the price

?do you really think BLUE RAY drive on PS3 wont cost any extra, SONY is full of B.S

[The ZeroCorpse @ Dec 30th 2005 10:33PM]

Well, let us look at Sony's history of media formats:



Beta/Betamax

MiniDisc

ATRAC

Sony-BMG Audio Disc (they are NOT CDs)

UMD-Video





What do these all have in common? Sony uses their own format to try to control who can produce for them, and what consumers can do with it once they purchase it.



Beta lost because Sony wouldn't allow the X-rated movie industry to use it.



MiniDisc lost because it required Sony players and recorders, and had limited end-user rights.



ATRAC is failing because it's a pain to use, it only works on Sony products/software, and it's got more DRM than any other digital music format.



Sony-BMG Audio Disc is being recalled because it was intrusive, had severely limited end-user rights, and compromised the end-user's computer equipment and internet security. This was bad enough to result in a class-action lawsuit.



UMD-Video is failing because many studios don't want to pay for the right to put out movies on a format that is only supported by ONE consumer electronic item in the United States, not to mention it limits end-user fair-use rights and costs no less than DVD, despite being smaller and less versatile than DVD.



So now Sony wants us to use Blu-Ray. We can expect it will be:



* Full of DRM schemes. We'll have to pay to use it on more than one device.



* Limited in terms of fair-use rights. We won't be able to make backups.



* Expensive for small distributors to use. The porn industry will KILL Blu-Ray. They've already embraced HD-DVD because of their past problems with Sony.



* Unlikely to see a price drop, ever. Sony will artificially keep the price high because they will own the rights to all the materials and/or design.



Sorry. Sony has screwed consumers on formats too many times. Game consoles aside, it's clear Sony's interest is in ironclad control of YOUR media.

[ymmv @ Dec 30th 2005 11:11PM]

The reason why HD-DVD will be cheaper on Windows Vista is that MS co-developed the player software that does the interactive multimedia stuff. Since MS owns this software it can put it in Vista so you can play HD-DVD videos out of the box. This is not the case with the Java-based software for Blu-Ray drives which will require additional non-MS software that you'll have to purchase seperately.



This simply means that a Vista PC with HD-DVD will always be cheaper than one with a Blu-Ray-drive.

[Shmoe @ Dec 31st 2005 7:58PM]

Right on No. 17. I've said the same thing before. Sony is too controlling with proprietary formats. It's their way or the highway. Look at the PSP with both memory stick pro duo and UMDs, and the root kit fiasco. I'm like Eric, I want to be able to rip the HD-DVD to my media server, then stream it to any TV in the house or download it to my portable video player, but definetly not the video iPod -- Apple is just like Sony.

I don't care that MS is paying for OEM's to use HD-DVD, and neither should people in Europe. It just helps the consumer. I wish the Xbox 360 had come with and HD-DVD drive, but neither BluRay or HD-DVD was ready. By next Christmas at the absolute latest, MS should be offering and HD-DVD 360, and offer to exchange all previously shipped 360s. It wouldn't be hard, all they would have to do is ship a new HD-DVD 360 to you and you send yours back, or they bill you or charge your card. You wouldn't miss any game time. They could then take your old 360 and plug in a new HD-DVD drive, make sure it's up to specs and sell it as a refurbished unit.

If the Europeans sue, MS should do what they should have done long ago, pull all support for their products from Europeans and let them whine.

[Shmoe @ Jan 1st 2006 9:14AM]

Right on No. 17. I've said the same thing before. Sony is too controlling with proprietary formats. It's their way or the highway.

Look at the PSP with both memory stick pro duo and UMDs, and the root kit fiasco. I'm like Eric, I want to be able to rip the HD-DVD to my media server, then stream it to any TV in the house or download it to my portable video player, but definetly not the video iPod -- Apple is just like Sony. I don't care that MS is paying for OEM's to use HD-DVD, and neither should people in Europe. It just helps the consumer. I wish the Xbox 360 had come with an HD-DVD drive, but neither BluRay or HD-DVD was ready. By next Christmas at the absolute latest, MS should be offering an HD-DVD 360, and offer to exchange all previously shipped 360s. It wouldn't be hard, all they would have to do is ship a new HD-DVD 360 to you and you send yours back, or they bill you or charge your card. You wouldn't miss any game time. They could then take your old 360 and plug into a new HD-DVD drive, make sure it's up to specs and sell it as a refurbished unit.

If the Europeans sue, MS should do what they should have done long ago, pull all support for their products from Europeans and let them whine then.