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Paramount and DreamWorks Animation To Support HD DVD Exclusively

In one of the most bold, stunning and unforeseen moves that's occured over the entire course of the format war, it was announced early this morning that Paramount and DreamWorks Animation will support HD DVD exclusively moving forward on a worldwide basis. Next week's HD DVD release of Blades of Glory will be the first Paramount HD DVD exclusive, followed by this summer's hits Transformers and Shrek the Third.

The HD DVD exclusive agreement covers all movies distributed by Paramount, Dreamworks Pictures, Paramount Vantage, Nickolodeon Movies, MTV Films, and Dreamworks Animation as mentioned. There is a notable exception: according to Reuters, the films directed by Steven Spielberg (the "S" in DreamWorks SKG) will not be exclusive to either format. Paramount has the Indiana Jones Trilogy and Dreamworks has several of Spielberg's more recent films.

Paramount had been supporting both Blu-ray and HD DVD up to this point and the timing of this couldn't be more curious. Blu-ray has enjoyed far great support from Hollywood studios, and Blu-ray software has been outselling HD DVD by a ratio of over 2:1 all year, according to virtually all market reports. In addition, Blu-ray players are below $500, and certain to drop even lower by the holiday shopping season. The Sony PlayStation 3, at over 1.5 million units in US households alone, is far and away the most prevalent player in the market on either side.

Yet, Paramount and DreamWorks execs were quoted as being swayed by "low-priced HD DVD players" and lower manufacturing costs. Then there's this too: according to this agreement is "rumored to be driven by a $150M exclusivity deal with the HD DVD group." To be fair, many believe that there were and are financial incentives involved in keeping Blu-ray's exclusive supporters in that camp. And hey, this is what companies do. They have a format to push, and they do it by any means necessary (and legal) more often than not.

Some thought the format war was winding down in Blu-ray's favor and that perhaps the war would be over sooner rather than later. Many in the mainstream press believe that a dominant format needs to arise before consumers will (or should) adopt HD on a disc en masse. And some fear that the longer this drags out the better chance downloads or other delivery methods have to win this war.

This agreement certainly appears poised to prolong the format war, if nothing else.

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