Ben Gilbert: belief

Transcript context

…It's not a core part of the business anymore. The Blu-ray fight was totally a Pyrrhic victory. They did ultimately win against HD DVD, which was a Toshiba format, but not worth it. Yeah. By the way, just to put some numbers around how royalties work, this Blu-ray Disc Association earns about $7 for every Blu-ray player sold, then I think there's maybe $2 that they make from selling the software that goes on it to be able to read the Blu-rays, and then it's something like 7¢ per disc. That gets cut up a bunch of ways depending on who contributed R&D efforts originally. This consortium gets paid the $9 total per player plus 7¢ a disc. It takes a long, long time to be able to really recoup the costs. I guess the point of this is, even if Blu-ray went well, the point of this isn't to have a big new revenue stream for Sony. The point is, they don't have to pay someone else a big revenue stream who develops a format and now they have meaningful cogs as a part of selling each one. The other reason they do it is Sony's whole reason for being is to create brand new cool engineering things that make it so the public will have something new to buy and love, and by creating a new standard and enabling that brand new consumer experience in a higher resolution. It's sort of this opportunity to create a brand new generation of devices, but I don't think that they ever look at the format licensing as a meaningful revenue stream. Whether they did or didn't, they failed on both fronts with Blu-ray. There's no way that the Blu-ray consortium got their money back in terms of R&D and marketing efforts. Blu-ray players do not become a major consumer electronics staple.…

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