DreamWorks not yet ready to support Blu-ray

While the high-definition format war may be over, those Blu-ray owners wanting to buy Shrek and Bee Movie are out of luck for the time being.

DreamWorks Animation said yesterday it still had an exclusive deal with Toshiba to distribute its movies on HD DVD, and until Toshiba gave it the go-ahead, it would not begin offering movies in Blu-ray. DreamWorks will be releasing Bee Movie in March on HD DVD.

Like many of the studios who picked a side during the bitter next-generation DVD format war that has dragged on for the past three years, DreamWorks and its distributor Paramount Studios received a rumored $150 million in financial incentives for their allegiance to HD DVD.

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But that exclusivity deal was thrown into uncertainty after Warner Bros. announced just before CES 2008 that it would stop releasing movies on HD DVD in June, which led Toshiba to pull the plug on the format earlier this month. According to Canada's Globe and Mail, Warner Bros. was paid $400 million by Sony for its exclusive support.

For its part, Paramount announced its intention to begin releasing movies in Blu-ray, but did not offer any specific dates. Universal issued a similar statement following Toshiba's news. DreamWorks CEO Jeffrey Katzenberg told Reuters that the studio was "poised either way to jump into the marketplace when the conditions are right to do so."

The problem all of Hollywood now faces is deciding how much support to give Blu-ray, especially considering consumer adoption of both high-definition formats has been miniscule thus far. DreamWorks may miss the opportunity for a simultaneous release of Bee Movie on Blu-ray, but when 99 percent of sales will be on standard DVD anyway, any concern is likely minor.

DreamWorks' and Paramount's exclusivity with HD DVD was scheduled to last until February 2009, and violating that agreement -- even with Toshiba ending production of HD DVD players -- could affect any payment the studios were slated to receive.

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