DVD format wars heat up as studio straddles fence

Monday, October 3rd 2005, 5:39 pm

By: News On 6

LOS ANGELES (AP) _ The battle to become the next-generation DVD standard has escalated, with Paramount Pictures becoming the first major movie studio to support both rival formats.

Until Paramount's announcement, the six major studios were evenly split between the Blu-ray technology backed by Sony Corp. and HD DVD supported by Toshiba Corp.

Both formats deliver movies in sharp high-definition and can store more data than traditional DVDs, which will allow them to offer interactive features such as games.

But the formats are incompatible and will force consumers to choose one over the other, a potentially costly decision if one format ultimately wins in the marketplace, the case when VHS defeated Betamax for home video in the 1980s.

Faced with a choice between two competing formats when discs do appear on the U.S. market next year, ``consumers will stay away from that. They just will,'' said Ted Schadler, a Forrester Research analyst.

Decisions by studios to provide content is considered key to the fate of the emerging formats. Paramount's decision, announced Sunday, tips the balance in favor of the Blu-ray camp _ at least for now.

The Walt Disney Co., Sony's Columbia Pictures and Twentieth Century Fox, which also support Blu-ray, have not said whether they will also release films in HD DVD.

Universal Pictures and Warner Bros. remain in the HD DVD camp.

``Universal has not changed its position,'' Lea Porteneuve, a studio spokeswoman, said Monday. ``However, we continue to evaluate all potential opportunities.''

Warner Bros. did not immediately return calls seeking comment.

The consortium backing HD DVD, which includes chip maker Intel Corp. and software giant Microsoft Corp., said they did not see the Paramount decision as a setback.

``While we are concerned that our established HD DVD partner has chosen to make this announcement at this time, we remain supremely confident in the superiority of the HD DVD format,'' Mark Knox, adviser to the group that supports HD DVD, said in a statement.

The Blu-ray camp, which includes Apple Computer Inc., Hewlett-Packard Co. and Dell Inc., was quick to trumpet Paramount's decision.

``It's a a pretty clear statement that Blu-ray has got some major momentum going on,'' said Andy Parsons, senior vice president of advanced product development at Pioneer, a major Blu-ray backer. ``From a consumer's point of view, if you buy a Blu-ray player, you're going to have a much easier time finding content than ever before.''

While Paramount still intends to release its films on HD DVD, the company said new information about the cost of manufacturing Blu-ray discs led it to reconsider its decision to support only one format.

Most critical to Paramount's decision was the availability of a Blu-ray drive on the new PlayStation 3 video game console, which will go on sale early next year.

``We have been intrigued by the broad support of Blu-ray, especially the key advantage of including Blu-ray in PlayStation 3,'' said Thomas Lesinski, president of Paramount Pictures, Worldwide Home Entertainment.

Toshiba, which had predicted it would have an HD DVD player ready for this holiday season, has delayed the launch in the United States until spring, bringing it closer to the expected availability of the PlayStation 3.

Toshiba still plans on selling an HD DVD player in Japan this year.

Formal talks between the two rival DVD camps about a possible joint format have stalled. Paramount's decision is unlikely to restart those talks and a format war, which studios dread, is as likely as ever, analysts said.

``We think the game's not over,'' said Richard Doherty, research director for the Envisioneering Group, a firm of technology analysts.