Paramount to abandon HD DVD in return to Blu-ray (updated)

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Paramount Pictures is poised to drop its support of HD DVD in favor of Sony’s Blu-ray format, landing a decisive blow to the Toshiba-backed next-generation DVD format and all but assuring Blu-ray's role as the future standard for all high-definition digital video discs.

The news, which comes by way of the Financial Times, arrives just days after Warner Bros. said it would switch to releasing high-definition movies only in the Blu-ray disc format, abandoning a neutral strategy that saw it's catalog available for both HD DVD and Blu-ray next-generation DVD players.

The move will leave Universal as the lone major Hollywood studio backing the HD DVD format and presumably conclude a multi-year battle for supremacy in the home entertainment market, leaving HD DVD to suffer the same fate as Sony’s now obsolete Betamax video technology when it lost out to VHS in a similar format war back in the 1980s.

As noted by the FT, Paramount and DreamWorks Animation — makers of the Shrek series of films — came out in support of HD DVD last summer, joining General Electric’s Universal Studios as the main backers of the format.

However, Paramount is understood to have a clause in its contract with the HD DVD camp that would allow it to switch sides in the event of Warner Bros. backing Blu-ray, the financial paper said, citing people familiar with the situation.

It's reportedly unclear whether DreamWorks has the same get-out clause in its contract with the HD DVD camp, but the animation studio maintains a close relationship with Paramount as the distributor of its films on disc.

For its part, Universal has remained mum on its forward looking plans for high-definition video discs and has declined to comment on the situation since Warner Bros. announced its intention to drop HD DVD support last Friday.

Update: According to Bloomberg, Paramount has denied the report by the Financial Times.

"Paramount's current plan is to continue to support the HD DVD format,'' Brenda Ciccone, a spokeswoman for Paramount, said in an e-mail.

Meanwhile, Keisuke Ohmori, a spokesman for Tokyo-based Toshiba, called the Financial Times' report "speculative."