Tuesday, August 21, 2007

Further muddying a format war over the next generation of DVDs, Viacom Inc.'s Paramount Pictures and DreamWorks Animation SKG Inc. said they would ditch the high-definition Blu-ray format and release high-definition digital videodiscs in the HD DVD format only.

The move will likely draw out the war between the two formats, in which Blu-ray had seemed to be winning the momentum. Now it will likely take at least two more holiday sales seasons before one format becomes a clear winner, studio executives say.

Paramount, which had previously released in both formats, is a plum catch for the HD DVD format, backed heavily by Toshiba Corp. and Microsoft Corp. Its skating spoof "Blades of Glory" comes onto DVD at the end of the month, and "Shrek the Third" and "Transformers" are likely to become top sellers when they are released on DVD for the holidays. Paramount distributes the films produced by DreamWorks Animation.

Now, "we can put all of our resources behind one format," both in marketing and manufacturing terms, says Kelley Avery, president of Paramount Home Entertainment. "You have to get behind one message."

The exclusive could be for as little as a year, according to two people familiar with the situation.

The studios won undisclosed financial incentives for exclusive commitments to release high-definition movies onto HD DVD only. A person familiar with the situation said the incentives included both cash payments and soft incentives such as marketing promotions.

Labels: Digital media, HDTV