DreamWorks Animation, Paramount choose HD DVD

LOS ANGELES, Aug 20 (Reuters) Viacom Inc's Paramount Pictures and DreamWorks Animation SKG Inc said today they will release their DVD titles exclusively on HD DVD, the high-definition digital movie format whose sales have lagged those of rival Blu-Ray so far this year.

Paramount, which distributes DreamWorks Animation's DVDs, settled on HD DVD after determining that the format offers better quality and lower-cost players and lower manufacturing costs, the studios said in a statement.

Two competing technologies -- HD DVD and Blu-Ray -- are waging a battle to dominate the next generation of DVD players that promise crisper video, audio and in some cases more content in the multibillion-dollar home entertainment arena.

Paramount's first releases under the exclusive HD DVD program include ''Blades of Glory'' on August 28 and the summer blockbusters ''Transformers'' and ''Shrek the Third,'' due for release later this fall.

The exclusive agreement does not include movies directed by Steven Spielberg for DreamWorks SKG, which is a Paramount unit.

His films are not exclusive to either format, Paramount said.

The agreement does include all other movies distributed by Paramount Pictures, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies and MTV Films.

HD DVD was developed by Toshiba Corp and backed by Microsoft Corp and is supported by Warner Bros, Universal Studios, New Line Cinema, HBO and the Weinstein Co.

Blu-Ray discs use Sony Corp -backed technology and are supported by most of the major US movie studios.

Both formats came on the market last year. Blu-Ray outsold HD DVD by 2 to 1 in the United States in the first half of 2007, according to Home Media Research.

An estimated 3.7 million high-definition discs have been sold, including 2.2 million in Blu-Ray and 1.5 million in HD DVD through the end of July, Home Media Research said last week.

REUTERS SR BD2208