Report: Sony may have paid up to $400 million (U.S.) to Warner Brothers

WASHINGTON, TORONTO -- Howard Stringer made history in 2005 for being the first non-Japanese executive to take the helm at Sony Corp. But he may be better remembered as the one who won the high-definition war, erasing the stain on the electronics firm's image ever since it lost the videotape war two decades earlier.

Although celebrated yesterday, the victory was sealed last month when Sony swayed Warner Bros. to back Sony's Blu-ray technology and quit producing movies using Toshiba Corp.'s rival HD DVD format.

What remains a mystery is just how big a push Warner needed to pick sides. Analysts say Sony only prevailed following a heated bidding war against Toshiba, with the reward reaching as much as $400-million (U.S.). Neither side has confirmed the size of any bids or payments.

[From globeandmail.com: Stringer makes his mark]

$400 million is pocket change when compared to either Warner's or Sony's marketing budget for one year.

Now think of a war of attrition, trying to sell people into picking one format or the other. That's up to ten miserable years blowing millions in advertisement, free discs with each drive bought, and Black Friday loss leader sales of drives. And no promise of resolution at the end of the ten years.

For all we know, at the end of these 10 years we would either still have to figure out which disc to buy, or end up paying more for a dual mode disc. And let's not forget that Sony had the superior format (Betamax) the last time, yet there are still plenty of VHS tapes around (and now that I think about it, mini discs).