DreamWorks' Blu-ray Blues: Still Tied to HD DVD

The movie studio is still locked into an exclusive deal to distribute films on Toshiba's HD DVD format, even though Toshiba itself ceded victory to Blu-ray and is dropping its HD DVD business.

"We have a partnership with Toshiba and have an obligation to see this through," DreamWorks Chief Executive Jeffrey Katzenberg told Reuters.

DreamWorks is looking to Toshiba "to really declare what the next step is," Katzenberg said, noting that the studio is waiting for direction on what high-def direction to take with its upcoming release of "Bee Movie."

All six of the major studios have already pledged support to Blu-ray, the rival high-definition DVD format backed by Sony. That includes DreamWorks' sister company Paramount Pictures, which last week said it will begin releasing titles in the Blu-ray format.

Paramount and DreamWorks reportedly shared $150 million in financial incentives for committing exclusively to HD DVD in August 2007, so it's unclear why Paramount is free to adopt Blu-ray while DreamWorks' hands are tied. Both companies are owned by Viacom.

Toshiba on Feb. 19 said it will stop developing, manufacturing and marketing HD DVD players and recorders next month. The decision to give up on HD DVD came after several major victories by Blu-ray showed that market momentum had shifted its way.

Studios and retailers were both eager to bring an end to the format war between HD DVD and Blu-ray, blaming it for lackluster adoption of high-definition players by hesitant consumers. Warner Bros. Entertainment tipped the scales in Blu-ray's favor in January when it committed exclusively to the format. Major retailers including Wal-mart, Best Buy and Netflix all followed with increased support for Blu-ray.

Now that it's won the war, Sony this week launched new high-def players, giving customers lots of ways to go with Blu-ray.

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