Warren Lieberfarb - 'father of the DVD,' fired from Time Warner

June 30, 2004

Warren Lieberfarb was the main person behind the DVD's major success. He originally started working with Paramount Pictures as a senior financial planner, later moved to Fox and then Warner Bros. With his strong likes for challenging business affairs, he had been fired twice at Warner Bros. although later rehired over & over as their top bosses always felt hopeful for him.

In the early 1990's, he felt his job was at risk with the introduction of Digital TV. As digital video discs had started up (12" Laser discs and Video CDs), he thought of how well movies could sell if there were placed on a CD sized disc with superior audio and video than VHS and competitively priced. However with the Betamax video tape issue, his main aim was to make the disc a universal standard.

Toshiba originally teamed up with Time Warner to develop the DVD and Philips then joined then. Later on, Philips left and joined with Sony to develop the DVD based on the CD. With two disc standards, Lieberfarb managed to get Time Warner's version mainstream by starting deals such as with Fox. He tried to make sure that the one format would also cover PC storage like with the CD-ROM. Many studios were not happy to pay royalties to Time Warner. Since then Time-Warner earned millions in royalties from the DVD patent, thanks to Lieberfarb. The Major studios sold $ 9.4 billion worth of DVDs last year alone; 52% ofHollywood's revenue that year.

Lieberfarb and Toshiba received an Emmy for their DVD efforts in 1999. Later on, Time Warner's CEO suggested that he pays $ 25 million and get options. However Time Warner run in to problems in 2002 when Time Warner stock options once worth up to $ 135 million were lost as a result of a merge disaster with AOL. He was fired in December with a letter blaming him for disruptiveness and left with $ 10 million. He has now signed on with Microsoft to help with its high-definition DVD. Lieberfarb predicts that the physical medium will be done away with as video on demand services via the Internet start taking over. Thanks to Mr. Belvedere for submitting the following news via our news submit :

This was it: the moment to celebrate. About 250 executives from Hollywood studios and home-electronics companies gathered at the Bellagio in Las Vegas earlier this year to toast their soaring fortunes, thanks to the phenomenal success of the digital video disc. Major studios sold a stunning .4 billion worth of DVDs to retailers last year, proof that DVDs now bring in a majority'”52 percent in 2003'”of Hollywood's revenue. Everyone noticed when the man most responsible for their good fortunes arrived: Warren Lieberfarb. The former chief of Warner Home Video deserved a round of cheers for doggedly pursuing his vision of the new format. Lieberfarb, more than any other person, merits credit for making the DVD a reality. He didn't invent the technology. More important, he saw its potential to transform the industry. So he cajoled, strong-armed and bargained with industry players around the world to set aside their parochial interests and sign on to a universal standard for the new format. No small feat, considering whom he needed onboard: studio chiefs, computer companies, retailers and heads of electronics companies. History was against him, too'”the field was littered with failed formats (remember Beta?). "Never has one name been so associated with the launch of a major product," says Brad Anderson, CEO of BestBuy.

Surprisingly, Lieberfarb isn't Hollywood's most popular figure. And the cool feelings are mutual, since he's never felt fully appreciated. He had braced himself for seeing his former detractors raise a glass to their own smarts. "You will see the peacocks strutting," he had muttered. Within minutes he ran into a former colleague and started berating him for ignoring his calls. "I won't forget this,'' Lieberfarb barked, then abruptly left.

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Lieberfarb's story is itself worthy of a Hollywood script, save for a thorny problem'”the main character is both protagonist and antagonist. His maneuverings got electronics giants, media moguls, Hollywood and Silicon Valley to agree on the new format. But he often seemed to undermine himself with his brusque manner and boastfulness. His story has a bitter twist, too. For all the billions of dollars he's created for the industry, he has relatively little to show for his work. He is hardly impoverished. But his "DVD bonus"'”Time Warner stock options once worth as much as 5 million'”was wiped out by the disastrous AOL Time Warner merger. Then he was abruptly fired after what some Time Warner insiders describe as a power grab by him; Lieberfarb says he was fired only for hounding bosses to restore his bonus. A Time Warner insider said his dismissal letter labeled him "disruptive." An arbitrator is working on the dispute, and Time Warner is trying to block Lieberfarb from seeking testimony from top officers, including CEO Richard Parsons. Lieberfarb added billions of dollars to the company's value, says David Boise, his star lawyer, adding, "The question of how a company treats someone who has created that kind of value is interesting." Time Warner declined to comment.

Read the full rather lengthy article here.

It is quite surprising and very sad for a person to be helping get a business running very well and then suddenly be fired once something runs off-track. Then again, even though the movie industry needs customers to make sales and profit, they are happy to treat consumers as criminals, lock and restrict the content and file lawsuits against anyone that disrupts their way.

Source: MSNBC News