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Paramount Drops Blu-Ray Support, Goes HD-DVD exclusive |

Dreamworks, who hasn’t released movies in either format, will also begin releasing movies on HD-DVD exclusively. Films directed by Steven Spielberg are not included in the deal and will not be exclusive to either format.

According to Microsoft rep on, Paramount’s forthcoming Blu-Ray titles that have already been announced are being cancelled. Existing Paramount Blu-Ray titles that are already being sold are being phased out; once existing inventories are exhausted, they will move to HD-DVD only.

Paramount’s titles have sold better on Blu-Ray than they have on HD-DVD. Overall, Blu-Ray has held roughly 70% of the Blu-Ray/HD-DVD disc sales. Why would Paramount move against sales and consumer demand like this?

DreamWorks Animation CEO, Jeffrey Katzenberg said:

“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.”

Sounds like bogus PR. The New York Times cites a much more likely explanation:

“But money talks: Paramount and DreamWorks Animation together will receive about $150 million in financial incentives for their commitment to HD DVD, according to two Viacom executives with knowledge of the deal but who asked not to be identified.

The incentives will come in a combination of cash and promotional guarantees. Toshiba, for instance, will use the release of “Shrek the Third” as part of an HD DVD marketing campaign.”

“The two studios may have left themselves wiggle room, however. Paramount’s agreement to use only HD DVD is limited to only 18 months.”

$150 million is a lot of money. It’s hard to blame anyone for selling at that kind of price.

Why are companies, such as Microsoft, so invested in the Blu-Ray/HD-DVD issue? Two reasons:

1. The obvious: PS3 vs. 360

Blu-Ray is tied with the PS3. Obviously, Microsoft wants to displace Sony and the PS3 with their own gaming technologies and standards.

2. Java vs. Microsoft

Microsoft has been a long competitor with the Java development platform. Microsoft would obviously prefer to remove any footholds that rival technologies might gain, such as BD-J within Blu-Ray, and replace them with Microsoft developed standards such as the interactivity features in HD-DVD.

As noted:

Interestingly, Microsoft’s Xavier Bringué implied that it was only when the Blu-ray camp decided it was going with Java that it decided to stop being format agnostic and go with HD DVD – a tacit admission that the move was purely political, based on Microsoft’s poor relationship with Sun.

An EE Times report also makes a similar conclusion:

…the classic battle between Microsoft and CE companies always comes down to the stickiest issue: to Java or not to Java.

For Microsoft, hoping to establish control over the software platform in the living room, support for HD-DVD is critical in this regard.

“For MHP [Java-based technology], the industry already has development tools, experience and an installed base that will grow, regardless of any DVD decision,” said Stu Lipoff, partner at IP Action Partners.

The Java-averse Microsoft “is trying to displace MHP so that they have a big dog in the fight,” he said.

  • Sporty

    If you follow the format war closely you see that most insiders think MS wants both formats to die so XBL download service is the place to go for HD content. Although DD is a good alternative I’m not too keen on paying $6 for a week’s worth of viewing and never be able to bring it to another system.

    The fall out for this move is probably going to haunt Paramount. 150 million might be nice since the HD disk market is still niche, but when we’re approaching 60 million US HD owners the demand is going to spike soon.

    Paramount is probably going to see loses over the 150 million with this move. Speilburg isn’t on board and wont release his movies on HD-DVD. Micheal Bay posted on his site that he’s so pissed at paramount that He wont direct Transformers 2 for them now.

    Universal said they are rethinking their HD-DVD only stance (at least on the IGN podcast).

    It’s about to get really nasty in the media due to this move. Although I haven’t heard anyone in the industry say this will help turn the tide to HD-DVDs favor. Since BD still has 4 exclusive studios and 70% of the globat market. It just adds confusion for consumers and delays the outcome.

  • ehandlr

    Michael Bay is pissed about this deal. He wants Transformers on all formats.

  • Dumb question – does the PS3 play Blu-Ray solely…or is it capable of playing HD-DVD?


  • PS3 plays Blu-ray Disc (BD), DVD, SACD, and CD formats. Not HD DVD.

  • It looks like Paramount was paid $150 million to exclusively support HD DVD for 18 months:

  • Mike

    HD-DVD’s refusal to face the reality of how poorly it is selling is going to ruin both formats in the long run. People are just going to keep sitting on the fence until there is only one format, and the longer it takes, the closer companies like Verizon will get to offering everything on demand in HD. Didn’t the Borat DVD sell more in one week then every HD-DVD combined to date?

    They’re both doing a lousy job of informing the general public of how much better the high resolutions look on an HDTV.

    Hopefully Sony continues to use Blu-Ray in ways that don’t get bogged down by the format war like getting blank discs to a lower price. I’d love to have 25GB discs to back files and media up.

    The longer DVD stays around, the more a lot of people are going to be encouraged to pirate. 720×280 two hour movies aren’t much of a download these days. They’re about to follow the music industry off the side of the mountain if they don’t keep things moving forward.

  • Check this out

    So by now you’ve heard that Paramount has dropped support for Blu-ray right? Good, so has a notable Hollywood director. Michael Bay — the man behind “Transformers,” “Bad Boys,” “Pear Harbor,” etc. — just threw down with Paramount in his personal blog. In a forum post titled “Paramount pisses me off!”, he states, “I want people to see my movies in the best formats possible. For them to deny people who have Blu-ray sucks! They were progressive by having two formats. No Transformers 2 for me!” That’s right Mike, aim your PS3 right at their coffers!

  • WHY????????? 🙁 Just when I’m getting a HD TV.

    Microsoft paying a load of money for exclusivity? I’m getting deja vu. *COUGH*GTA IV*COUGH*