Dreamworks Stuck with HD DVD

Ill-fated contracts signed in August still bind DreamWorks to HD DVD, until execs can hammer out an agreement with Toshiba.

While seemingly every movie studio, retailer, and rental store has jumped on board with Blu-ray in the aftermath of the format war, it turns out it will not be quite as easy for former HD DVD ally DreamWorks animation. According to Reuters, the company is still legally bound to the format by lucrative contracts it inked with Toshiba before the format’s fall.

“As you know, we have been well-compensated for our support,” DreamWorks CEO Jeffrey Katenberg told Reuters. “It really is in their court at this point to really declare what the next step will be.” The  studio’s agreement dates back to August, when it entered a deal, together with Paramount, to distribute movies exclusively on HD DVD in exchange for what the New York Times says was $150 million in combined incentives.

Bee Movie will be the studio’s first release since Toshiba closed the door on HD DVD, leaving DreamWorks to guess what the right course of action will be. According to Katzenberg, the company has consulted Toshiba for help and awaits a response.

Yet with a hefty sum paid for another 12 months of support, it’s unlikely Toshiba will cave without some sort of compensation. DreamWorks may still have a period of HD DVD releases ahead, but experts predict the situation will be sorted out by the 2008 holiday season.