Paramount, Dreamworks ditch Blu-ray

Paramount Pictures Corp. and DreamWorks AnimationSKG have stepped up the battle for the next-generationhome videomarket by throwingtheir weight behind HD-DVD andshunning the rival Blu-ray format.

The two studios said all future movies will be released solely on HD-DVD because the format is "market-ready technology" and has lower manufacturing costs than Blu-ray. The releases will cover those produced by Paramount Pictures, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies and MTV Films, as well as movies from DreamWorks Animation, which are distributed by Paramount Home Entertainment.

First on the list will be Paramount's hit comedy Blades of Glory on Aug. 28, followed by Transformers and Shrek the Third. The three movies have grossed a total worldwide box office take of $1.5 billion US, the studios said.

"I believe HD-DVD is not only the affordable high-quality choice for consumers but also the smart choice for Paramount," said Brad Grey, the company's chairman andchief executive officer.

The move is a big vote of confidence in the HD-DVD format, which has been losing some momentum to Blu-ray in recent months.

Blu-ray, which isbacked primarily by Sony Corp.,recently won exclusive support from Blockbuster Inc., the world's largest video rental chain, as well Target Corp., the second-largest retailer in the United States. Sony has also included a built-in Blu-ray player with its PlayStation 3 video game console, which launched last November. The company recentlylowered the price of theconsole to spur sales.

HD-DVD, supported mainly by Toshiba Corp., however, isthe cheaper of the two formats to produce and has won support among some disc manufacturers as a result. At the retail level, HD-DVD players are also cheaper— a Sony Blu-ray player sells for about $570 while a Toshiba HD-DVD player retails for $399.

Of the major studios, only Time Warner Inc.'s Warner Bros. is supporting both formats. The Blu-ray camp includes The Walt Disney Co., News Corp.'s20th Century Fox and Metro-Goldwyn-Mayer, as well as technology and electronics heavyweights Panasonic Corp., Sharp Corp. and Apple Inc. HD-DVD is backed by Universal and HBO,as well as Microsoft Corp. and Intel Corp.

The format battle has confused consumers, who have held off on buying players and discs. Rick Anderson, chief executive of online service Zip.ca, said that while high-definition rentals are increasing, they still account for less thantwo per cent of the company's total monthly rentals.