Friday, August 24, 2007

DVD war drags on

In an earlier post, I asked whether the European Union antitrust investigation would turn the standards war between Blu-Ray and HD DVD into a quagmire. The Economist reports that DreamWorks Animation and Paramount Pictures have switched sides--all their future high-definition titles will be released solely in the HD DVD format.

Paramount was rumoured to have received $50m and DreamWorks $100m for making the switch. ... The defection certainly levels the playing field in terms of titles released exclusively in one format or the other. In doing so, however, the confusion that’s prevailed in the marketplace—with mainstream customers staying on the sidelines until a winner emerges, or both get overtaken by events—is now set to continue for several more years.

The payments suggest that an auction between the two formats might be an efficient way out of the quagmire.

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