Hey folks, Harry here. Woke up with the following press release in my InBox, then shortly thereafter, I received a phone call from Rob Moore, President Worldwide Marketing, Distribution and Home Entertainment for Paramount Pictures - who is doing a flurry of interviews today - in articles you'll read tomorrow in the NY TIMES, LA TIMES, USA TODAY - etc. You see - this is a big deal, because this means that alongside UNIVERSAL, PARAMOUNT is going EXCLUSIVE to HD DVD.

So, the first question I asked Rob Moore was... "Why would PARAMOUNT/DREAMWORKS choose the allegedly losing format in this format war?"

Rob responded that the keyword there was "Allegedly". It seems that according to their studies, the people that buy stand alone players - buy more dedicated film product... so, due to Toshiba's commitment to getting quality equipment at the under $300 barrier - means to the execs at Paramount, that this is the format to support.

I then countered with, "But isn't Sony supposed to introduce an under $300 Blu-Ray player this Holiday season?"

Rob responded that they have heard that, but it hadn't been assured yet. So next, I asked, "Why support either format exclusively - wouldn't providing content to supporters of both formats be the way to go?" Rob responded that concentrating on one format allows them to concentrate on content for that format exclusively, thus giving better product for the format they support. It also means that they can begin opening up their library and getting more product out for the format. Which is a very good thing for those of us on HD.

I then asked when the INDIANA JONES set would hit and if it would be exclusive to HD. Rob responded that on the films that Spielberg, however, is a huge supporter of Blu-Ray and always has been and wants the titles to be available in both formats - so those will be cross-platform titles. However, the rest of Dreamworks, Viacom/Paramount's world... those will be HD DVD exclusive for the next few years at least. Can you imagine BLOCKBUSTER not letting people rent TRANSFORMERS, SHREK THE THIRD, etc? Me Either. This format war is a fascinating chess game, isn't it?

Next, I talked with Alan Bell, the Chief Technology officer for Paramount. He's been in charge of the technological decisions and realities for Paramount, since the advent of DVD. I asked Alan if he was happy with this decision, or if this was something that was being forced upon them.

Alan then went into a very complicated series of statements about how HD DVD was the format that makes sense for Paramount. It's not just a matter of the amount of space that one format has over another. That's a gross simplification between the two formats. You see, HD DVD was built upon... not just the technology of DVD, but the programming software and other aspects. When we began talking about the cost issues - Alan stated it's very very complex, but that the replication facilities that have been built for the mass production of DVD - it's much cheaper and simpler to convert for HD DVD mass production.

For those of us consuming these products - it's easy to simply believe decisions are made due to just advertising incentives, but when you speak to the technology guys inside these studios - you hear that HD DVD is cheaper, serves the technological needs of the High Definition format, that the programming languages are an extension of the established DVD format - so it is easier for them to work with. This decision is about more than an intial Toshiba advertising incentive - the decision was made at a tech level, an economic level and about a cost delivery level to the public. Paramount made this decision from the tech guys up. Here's the release...

PARAMOUNT AND DREAMWORKS ANIMATION EACH DECLARE EXCLUSIVE SUPPORT FOR HD DVD

Movies Distributed by Paramount Home Entertainment Including Paramount Pictures, DreamWorks Animation SKG, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies and MTV Films to be Released Exclusively in HD DVD

Exclusive Program To Begin with Release of “Blades of Glory,” Followed by “Transformers” and “Shrek the Third,” Films Representing More Than $1.5 Billion in Combined Worldwide Box Office

Los Angeles, CA, August 20, 2007 – Paramount Pictures, a unit of Viacom Inc. (NYSE: VIA and VIA.B) and DreamWorks Animation SKG (NYSE:DWA), each announced today that they will exclusively support the next-generation HD DVD format on a worldwide basis. The exclusive HD DVD commitment will include all movies distributed by Paramount Pictures, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies and MTV Films, as well as movies from DreamWorks Animation, which are distributed exclusively by Paramount Home Entertainment.

The companies each said that the decision to distribute exclusively in the HD DVD format resulted from an extensive evaluation of current market offerings, which confirmed the clear benefits of HD DVD, particularly its market-ready technology and lower manufacturing costs. Paramount Home Entertainment will launch its exclusive HD DVD program with the release of the blockbuster comedy hit “Blades of Glory” on August 28th and follow with two of the biggest grossing movies of the year “Transformers” and “Shrek the Third”. These three titles alone represent more than $1.5 billion in box office ticket sales worldwide.

“The combination of Paramount and DreamWorks Animation brings a critical mass of current box office hits to consumers with a line-up of live action and animated films that are perfect for HD DVD,” stated Brad Grey, Chairman and CEO of Paramount Pictures, which is currently the leading studio in domestic box office. “Part of our vision is to aggressively extend our movies beyond the theater, and deliver the quality and features that appeal to our audience. I believe HD DVD is not only the affordable high quality choice for consumers, but also the smart choice for Paramount.”

“We decided to release “Shrek the Third” and other DreamWorks Animation titles exclusively on HD DVD because we believe it is the best format to bring high quality home entertainment to a key segment of our audience – families,” stated DreamWorks Animation CEO, Jeffrey Katzenberg. “We believe the combination of this year’s low- priced HD DVD players and the commitment to release a significant number of hit titles in the fall makes HD DVD the best way to view movies at home.”

With the rapid increase of HD TV screens in households, and audiences wanting to enjoy the total entertainment experience, HD DVD has emerged as the most affordable way for consumers to watch their movies in high definition. In addition to pristine quality, HD DVD also offers consumers the chance to personalize the movie-watching experience, to interact with their movies and even to connect with a community of other fans.

Paramount Home Entertainment will issue new releases day and date as well as catalog titles exclusively on HD DVD. Today’s announcement does not include films directed by Steven Spielberg as his films are not exclusive to either format.

About Paramount Pictures Corporation

Paramount Pictures Corporation (PPC), a global producer and distributor of filmed entertainment, is a unit of Viacom (NYSE: VIA, VIA.B), a leading content company with prominent and respected film, television and digital entertainment brands. The company’s labels include Paramount Pictures, Paramount Vantage, Paramount Classics, MTV Films, Nickelodeon Movies and DreamWorks Studios. PPC operations also include Paramount Digital Entertainment, Paramount Home Entertainment, Paramount Pictures International, Paramount Licensing Inc., Paramount Studios and Worldwide Television Distribution.

About DreamWorks Animation SKG

DreamWorks Animation is principally devoted to developing and producing computer generated, or CG, animated feature films. With world-class creative talent, a strong and experienced management team and advanced CG filmmaking technology and techniques, DreamWorks Animation makes high quality CG animated films meant for a broad movie-going audience. The Company has theatrically released a total of fourteen animated feature films, including Antz, Shrek, Shrek 2, Shark Tale, Madagascar, Wallace & Gromit: The Curse of the Were-Rabbit, Over the Hedge, Flushed Away, and Shrek the Third. DreamWorks Animation’s newest release, Bee Movie, opens in theaters November 2, 2007.