Marketplace: Paramount Pushes New DVD Formats Marketplace's Tess Vigeland talks about Paramount's decision to release its movies on the next generation of DVD technology. The formats are called BluRay Disc and HD-DVD, and Paramount is the first studio to use both.

Marketplace: Paramount Pushes New DVD Formats

Marketplace: Paramount Pushes New DVD Formats

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Marketplace's Tess Vigeland talks about Paramount's decision to release its movies on the next generation of DVD technology. The formats are called BluRay Disc and HD-DVD, and Paramount is the first studio to use both.

ALEX CHADWICK, host:

Back now with DAY TO DAY. I'm Alex Chadwick.

For the last three years or so, Hollywood's been debating what the next generation DVD is going to look like. There are two competing formats. One's called HD DVD; the other's called Blu-ray. They play in different machines, of course, so studios have to decide which ones to put their movies on, and consumers will have to decide which one to buy. But now movie studio Paramount has decided to back both. "Marketplace's" Tess Vigeland joins us.

Tess, first of all, a background on the debate: What is Blu-ray? What is HD DVD?

TESS VIGELAND reporting:

Well, Alex, this is really today's version of the old Beta vs. VHS debate. Technology companies have been working, as you said, on the next generation of how we're going to watch movies at home, the next DVD. One of those technologies is HD DVD, manufactured by Toshiba; the other is Blu-ray, which is backed by Sony and Panasonic. And the technologies are not compatible, so you have to choose sides. And that's what the studios have been doing over the last several months, backing one or the other. Paramount originally said it was going to back HD DVD; now it says it will produce home videos for both machines, and it's the first movie studio to do that.

CHADWICK: And who's the winner here? Anybody?

VIGELAND: Not really. I spoke with Paul Sweeting, who's a columnist with Video Business magazine, and he says essentially the studios--at least if others follow Paramount's lead here--are basically throwing up their hands and saying, `OK, we're going to have another format war.' And he says that's likely to lead consumers to just do nothing and stick with what they have because it's too confusing to figure out which format to use.

Mr. PAUL SWEETING (Video Business Magazine): It's baffling. It's a complete failure of the system of Hollywood and the electronics companies and the technology industry. It's an astonishing development.

VIGELAND: Now over the summer, Sony and Toshiba were trying to come to an agreement on making these technologies compatible, but that fell apart. And just to give you an idea of how divided this whole thing is, Apple, Dell, Hewlett-Packard, Disney, Lions Gate and FOX are among those backing Blu-ray. For HD DVD, you've got Universal, Warner Bros., Microsoft and Intel among others. So big, big players on both side of this thing.

CHADWICK: Yeah. And now Paramount's going to follow both technologies. How much is that going to cost them?

VIGELAND: A whole lot more. They're going to have to license both technologies, Blu-ray and HD DVD. Nobody knows yet what the true manufacturing costs are going to be. There is some agreement that Blu-ray will be more expensive because it's brand-new technology; HD DVD relies mostly on technology that's already out there. But again, not sure how much it's going to cost, but it's going to be a lot. And both of these are due out sometime next year.

And later today on "Marketplace," we'll look at the latest sales figures from the auto industry.

CHADWICK: Thank you, Tess Vigeland, of "Marketplace," from American Public Media.

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