Cliff Edwards, Peter Burrows, and Ronald Grover at Business Week have all the details in Daggers Drawn Over DVDs: 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 Chairman Bill Gates III laid into Sony 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.
Skipping a number of juicy plot twists, the net is:
Behind the brinkmanship lie two vastly different views of where entertainment in the home is heading. Microsoft and Intel paint a futuristic picture of the digital home, with sleek PCs powered by their software and chips in the central role. The PC would shuttle music, photos, and video from room to room—and grab off the Web everything from the latest Tom Cruise blockbuster to a National Public Radio podcast.
Sony and its supporters are skittish about the latest movies being zipped around the house. Blu-ray disks can hold more content than today’s DVDs, but they would be used in much the same way. The new disks would be plopped into a DVD player, and copyrighted material, like Hollywood movies, couldn’t be ripped to a computer’s hard drive without a studio’s permission.
Blu-ray equipped devices are even designed to recognize and refuse to play pirated movies.
So far Sony has lined up the movie studios behind Blu-ray and things aren’t looking good for HD DVD despite the recent CPR attempt by Microsoft and Intel, but who knows what tomorrow’s episode will bring!