Par's definition: It's HD DVD only

'Right decision for long haul'

In a dramatic turn, Paramount Home Entertainment and DreamWorks Animation on Monday vowed exclusive support of HD DVD, a year after declaring they would release movies in both next-generation disc formats.

The companies said the decision to no longer release titles in the Blu-ray Disc format came after an "extensive evaluation of current market offerings, which confirmed the clear benefits of HD DVD, particularly its market-ready technology and lower manufacturing costs."

Paramount's first next-generation release slated for HD DVD only will be "Blades of Glory," coming Aug. 28, followed in the fourth quarter by the summer smashes "Transformers" and "Shrek the Third."

"We have tremendous momentum because we have the most popular movies coming into the market at the same time as low-price players, so it's a great combination," said Kelley Avery, worldwide president of home entertainment at Paramount Pictures.

"The thing we have to remember is what is the right decision for the long haul. If you look at the market today, only 3 million units have actually been sold in high definition versus billions of units for DVD. We are in a nascent period now, and we think the time is right to get behind one format, and we want to put all our resources and creative talents behind one single format."

The exclusive HD DVD commitment applies to movies distributed 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. Paramount will issue new releases in HD DVD on the same day as the DVD, in addition to catalog titles.

Not included are films directed by Steven Spielberg. The first Spielberg film to be released on high-definition disc, "Close Encounters of the Third Kind," is being released Nov. 13 on Blu-ray Disc only by Sony Pictures Home Entertainment. Spielberg supports Blu-ray, though his films are not exclusive to either format.

Still, the move represents a formidable chunk of product coming to HD DVD — and not Blu-ray.

"This isn't about rival technologies," Avery said. "It's about the best option for consumers. We have to jump-start the business, and we think HD DVD is the best choice, the best proposition for consumers."

Paramount Pictures chairman and CEO Brad Grey called HD DVD "not only the affordable high-quality choice for consumers but also the smart choice for Paramount." DreamWorks Animation CEO Jeffrey Katzenberg, citing the lower cost of HD DVD players ($299 for an entry-level Toshiba model, $200 cheaper than the most inexpensive Blu-ray player), said HD DVD "is the best format to bring high-quality home entertainment to a key segment of our audience: families."

The move doesn't quite level the playing field with the favored Blu-ray Disc, but it certainly boosts HD DVD's position in the battle for one unified high-definition disc that will one day succeed standard DVD.

"To me, it is a validation of a strategic stance we have taken, and I am so pleased that Paramount and DreamWorks have done as thorough an evaluation as they have done and come to the same exact conclusion that we did long ago — which is that with HD DVD we have a format that offers the best and most affordable consumer experience," said Craig Kornblau, president of Universal Studios Home Entertainment.

Until Monday, Universal had been the lone studio to exclusively support HD DVD.

Paramount — along with Warner Home Video — had been supporting HD DVD and Blu-ray Disc, while Fox Home Entertainment, Sony Pictures Home Entertainment, Walt Disney Studios Home Entertainment and Lionsgate are exclusively in the Blu-ray camp.

Blu-ray Disc Assn. spokesman Andy Parsons said that the Paramount decision "certainly doesn't make sense from a business standpoint when you consider all the momentum Blu-ray has had, particularly in the last 60 days."

He cites the exclusive retail arrangements for Blu-ray software at Blockbuster and Blu-ray hardware at Target Stores as well as "the fact that Blu-ray Disc is outselling HD DVD by a factor of 2-to-1 on media sales."

Bob Chapek, president of Walt Disney Studios Home Entertainment, called the Paramount move "too little, too late."

"Consumers for the last nine months have been voting with their dollars," he said, "and they've been solidly voting for Blu. Whatever (Paramount's) motivation is, it does not seem rational. It's not logical, and it defies the facts of the marketplace."

Home entertainment analyst Tom Adams said Paramount's decision to go exclusively with HD DVD "is understandable from a cost-savings point of view."

"I think the fact that both formats are backward compatible makes going single format less of a fateful decision than in previous format battles," Adams said. "Consumers with a Blu-ray player can still watch Paramount movies on standard DVD."

"In any case," Adams added, "it makes it clear the format war is far from over."
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