HD-DVD gets studio support in format war

FROM FT.COM

Paramount Pictures and DreamWorks animation gave HD-DVD a boost on Monday in the race to become the dominant home entertainment format, announcing they would release all their new titles in HD-DVD.

HD-DVD, backed by Toshiba and Microsoft, is vying with Sony’s Blu-ray format to become the successor to the DVD format.

Blu-ray has won the support of Sony Pictures Entertainment, 20th Century Fox and Walt Disney, while Warner Bros Entertainment uses both formats.

Paramount, a subsidiary of Viacom, on Monday said there were “clear benefits” to HD-DVD, in particular its “market-ready technology and lower manufacturing costs”.

“We really believe the HD-DVD format will be able to provide a lower price-point, which is critical for consumer take-up,” said Rob Moore, president of worldwide marketing, distribution and home entertainment. “We think HD-DVD will show a lot of momentum in the fourth quarter.”

There are more Blu-ray devices on the market than HD-DVD players, mainly because Sony’s PlayStation 3 console uses Blu-ray. However, Mr Moore said he expected the balance to shift towards HD-DVD because HD-DVD devices cost less than Blu-ray players.

Paramount and its subsidiary labels, such as DreamWorks, Nickelodeon Movies and MTV Films, will distribute films exclusively in HD-DVD format, the studio said.

Paramount had previously supported both formats. Its decision to back only HD-DVD means it has aligned itself with Universal Studios.

Paramount’s support of HD-DVD comes as a blow to Blu-ray because after a lean couple of years, the studio is enjoying a bumper 2007. Paramount has been responsible for hits such as Transformers and Blades of Glory, and it also has a distribution agreement with DreamWorks Animation, which produced Shrek the Third.

“We believe the combination of this year’s low-priced HD-DVD players and the commitment to release a significant number of hit titles in the fall makes HD-DVD the best way to view movies at home,” said Jeffrey Katzenberg, chief executive of DreamWorks Animation.

“We decided to release Shrek the Third and other DreamWorks Animation titles exclusively on HD- DVD because we believe it is the best format to bring high quality home entertainment to a key segment of our audience – families,” he added.

Paramount’s move comes weeks after Blockbuster, the DVD rental chain, said it would stock more Blu-ray discs to cope with rising consumer demand.

Blockbuster said it would offer Blu-ray in 1,700 stores compared with about 250 for HD-DVD. It said Blu-ray rentals were “significantly outpacing” rentals of HD-DVDs.

However, Mr Moore said this was because there were more Blu-ray players on the market, and that this would change as consumers purchased lower priced HD-DVD players.