How's this for a bad bet? Viacom's (NYSE:VIA) Paramount and DreamWorks Animation (NYSE:DWA) will only be supporting HD-DVD in the battle between the two platforms seeking to eventually supplant the DVD as the flick-disc format of choice.
Both HD-DVD and Blu-ray have been slow to come around. HD-DVD offers slightly cheaper players and media, but Blu-ray packs the better storage capacity.
Committing to one wafer-thin niche -- in what is already a small two-niche market -- doesn't make a whole lot of sense. The exclusivity push comes just after Sony (NYSE:SNE) lowered prices on its Blu-ray-powered PS3 video game consoles. Microsoft's (NASDAQ:MSFT) Xbox 360 does offer an HD-DVD drive, but it's only a sparingly added accessory.
Taking sides will also slow down the already lethargic adoption rate. Few people will shell out hundreds of dollars to upgrade to a Blu-ray or HD-DVD player when the studios aren't completely behind a format, in the way they've all rallied behind the original DVD. Nobody wants to make a bad bet on the latest version of VHS vs. Betamax.
The prospects of not having Shrek the Third or Blades of Glory on Blu-ray doesn't mean that the higher-end platform is toast. Heck, did you see either flick? It may even be a Blu-ray selling point. Still, in all seriousness, this is just a bad move all the way around.
The move also comes at a time when Blockbuster (NYSE:BBI) has decided to ramp up its Blu-ray rentals at the expense of HD-DVD.
I understand why Sony hits like Spider-Man 3 are not going HD-DVD. Sony has a huge wager on Blu-ray hardware. What I don't get is why Viacom and DreamWorks Animation would throw their weight -- exclusively -- behind the laggard.
Related Foolishness:
DreamWorks Animation is a Motley Fool Stock Advisor newsletter recommendation. Microsoft has made the cut for Inside Value readers. Free trials are available for both newsletter services. We won't make you pick sides. Try both!
Longtime Fool contributor Rick Munarriz is a sucker for quality animation. Yes, he owns shares of DreamWorks Animation. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
