Interesting observation about Toshiba/BD

hatt

Someone brought this up on another forum so I'm going to expand on it. If we look at the royalty chart Lee posted. Toshiba makes much more money off DVD player royalties over DVD disc royalties. Wouldn't it be a big benefit to Toshiba to have people buying large numbers of BD players, which have DVD royalties, vs people just keeping what they already have? All current BD players would fetch $8(the max) in DVD royalties, or the same as selling 177 DVDs.

Lee Stewart

In 2007 (USA):

They sold 13 million DVD players.

They sold about 1.7 BILLION DVD's.

hatt

DVDs are going to continue to sell in large numbers for years, BD or not, so disc royalties will continue to come in. $8 in free money per players seems like something a company would be interested in. I'm sure there are plenty(most?) of people that buy a BD player that had no plans of buying another DVD player. I'm guessing there is an astronomically better chance of most people buying a BD player over buying an additional 177 DVDs at this point.

railven

I guess it makes sense. I mean, isn't it constantly being stated how many movies will never be released on HDM?

Joe A can buy a BD player (DVD royalties paid) and then line their collection of movies with 1:10 ratio of BD: DVD (just a number) of which DVD gets their royalties?

I know my brother still buys DVDs, but all the new movies he either gets on BD or HD DVD (well, when they were still coming out) so as we move forward I can see this starting to hurt Toshiba.

But I don't think it would happen like that for a long time!

Does Toshiba get DVD royalties on rentals too?

Lee Stewart

Toshiba through the DVD Forum is collecting royalties on every BD player because it is also a DVD player.

The BD SAL player market, at this time, is very small. So they would be competing for a piece of a very small market. Plus they would have to join the BDA and pay BD royalties on it's players.

Nikopol

I think they get royalties from the DVD sold with rental rights, not the rental itself. At least here in Germany, these are rather expensive from what i've heard. So i guess the patent holders get more (one time) royalties from one dvd with rental rights than from a normal retail dvd.

hatt

Hopefully more people will ring in with different thoughts on this.

I'd guess d&d titles bring in the biggest part of DVD disc royalties. But they still have to sell 177 more discs(or some combination of a cheap DVD player + 100 discs; or a $200 DVD player) to get the royalties from a BD player. I don't think people will continue to buy DVD players in large numbers when they already have 3 or 4. I had 3 DVD players somehow so I know I wouldn't have been buying one anytime soon but the got the royalties from the PS3 I bought mainly for the BD feature.

I'd assume DVD rental royalties are paid at the beginning and are the same 4.5 cents as normal.

hatt

No kidding, that is the point of the thread.

I'm not talking about Toshiba making BD players, even though it makes sense IMO for them to do it. Plus CEMs do not pay the royalties, the consumers do. If Toshiba says, "I don't care if we lose some free royalties just so some other outfit doesn't receive some" I don't know what to tell them.

railven

Whoops, that's what I meant from the rental store buying the movie, not the individual rental by the consumer.

I mean, if they got the royalty from the BD player, and chances are people aren't going to stop buying/renting DVDs, they would still get a buttload of royalties from DVD, even if the consumer owns a BD player.

And if said consumer jumps and replaces all his DVD players with BD players even more royalties. Right?

hatt

I think BobY said the DVD forum makes $150 million a year on DVD royalties. If we add up the BD players so far, I'm using 10M PS3s and 1M SALs for easy math. Thats $88 million to the DVD forum in the last 2 years for BD players. It looks like the big winner right now is the DVD forum. But no wonder Toshiba was wanting HD DVD to come through. That'd be a money tree for sure.

Dare

I think Toshiba's idea is to get the royalties without letting Sony have any, not just sacrificing them completely. Hence, all of Toshiba's (lately quieter) marketing hype about SRT, in a (weak?) effort to distract people from Blu-ray.

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Lee Stewart

That number is way too low.

You are forgetting that every device that can play a DVD has to pay a royalty - that includes ALL game consoles and PC's of all kinds.

Plus the royalties for DVD's include game discs and PC software discs.

The number is closer to $1 billion a year.