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Dreamworks Animation Confirms: Payoffs Pressured Format War.

Category: Multimedia

by Anton Shilov

[ 02/27/2008 | 07:59 PM ]

Despite of the fact that no HD DVD equipment will be provided by its main supporters Microsoft Corp. and Toshiba Corp., which means that the format is set to vanish into oblivion, Dreamworks still cannot release any high-definition movies in competing Blu-ray disc format due to an agreement. This shows that the outcome of the high-def format war was hardly determined by consumers.

“We have a partnership with Toshiba and have an obligation to see this through. As you know, we have been well-compensated for our support. It really is in their court at this point to really declare what the next step will be. We’re poised either way to jump into the marketplace when the conditions are right to do so,” Dreamworks chief executive Jeffrey Katzenberg said in an interview with Reuters news-agency.

Dreamworks is owned by Paramount Pictures, a part of Viacom group. Recently Paramount said it would release its titles on Blu-ray disc (BD) given the fact that HD DVD is set to disappear going forward. It is unclear why Dreamworks, which is behind such titles as Shrek, is obliged to release titles only on HD DVD high-definition format, whereas it’s owners are ready to embrace Sony’s and Philips’ Blu-ray disc.

Dreamwork’s humble claim about “compensation” for the support was rumoured to be as high as $150 million, which HD DVD promotional group provided to Paramount Pictures and Viacom.

But the Blu-ray camp may also not be totally fair. Various rumours around the Internet claimed that the Blu-ray disc Association provided “incentives” worth $500 - $620 million to Time Warner, the parent company or several studios, including Warner Bros. and New Line Cinema, but Time Warner denied those allegations. Another rumour suggests that Warner’s Blu-ray exclusivity would only last till Q1 2009 and that the company got $450 million for that.

Moreover, there also seem to be no blue skies for the Blu-ray:

“The outcome of the format war […] does not benefit anyone today and it comes at a cost. [Blu-ray] discs and players are both more expensive to manufacture. The DVD format was less expensive to implement and further along in its deployment. [Blu-ray] is twelve months behind in terms of its feature set,” said ABI Research company’s principal analyst Steve Wilson in an interview with Beta News web-site.

Blu-ray and HD DVD formats compete(d) for replacing the DVD standard. HD DVD discs can store up to 15GB on a single layer and up to 30GB on two layers. Its competitor, Blu-ray, can store up to 25GB per single layer and up to 50GB on two layers, but Blu-ray discs are more expensive to produce. Traditional single-layer DVDs allow consumers to watch movies in 720x480 (NTSC) or 720x576 (PAL) resolution with Dolby Digital audio. The blue-laser discs provide consumers up to 1920x1080 resolution as well as advanced DTS or Dolby Digital audio along with some additional interactive features.