Paramount Pictures shocked Hollywood this week by announcing it would no longer distribute its movies in the Blu-Ray format. Instead, Variety reports the studio would have an exclusive deal with HD-DVD, a partnership that would include films from DreamWorks Animation (like Shrek the Third). Since 2005, Paramount had been releasing videos in both formats while DreamWorks had not released any high-definition discs in either format. With a large consensus in the biz decidedly declaring Blu-Ray the winner in the hi-def war, it was definitely strange to hear about Paramount and DreamWorks' decision. However, according to the New York Times, the studios are receiving $150 million in incentives to stay exclusive for the next 18 months, or through Christmas 2008. The Times couldn't reveal where the incentive was coming from, though, only clarifying that Microsoft claims to have not been involved in such a deal.

One film that won't be released in HD-DVD is Indiana Jones IV, which Paramount puts in theaters next Memorial Day. The studio's deal with HD-DVD doesn't include films directed by Steven Spielberg. None of the Indiana Jones movies, nor Saving Private Ryan nor War of the Worlds will be put on HD-DVD disc. This isn't too unusual, as Spielberg actually favors Blu-Ray, though it took him a long time to jump aboard the hi-def wagon. His first hi-def video release is scheduled to be Close Encounters of the Third Kind, which Sony releases on Blu-Ray this November. According to Spielberg spokesman Marvin Levy (also a DreamWorks marketing exec), there are currently no plans for more of the director's films to hit either hi-def format. He also pointed out Spielberg's still-active support for Blu-Ray. However, a short film by Spielberg included as a segment of Twilight Zone: The Moviegets both a Blu-Ray and an HD-DVD release in October. Supposedly the Spielberg stipulation means that the director can put his Paramount and DreamWorks titles on Blu-Ray if he wants. As for his Universal titles (including Jaws, Schindler's List, E.T.), we probably won't see them on hi-def for a long time, because that studio is also HD-DVD exclusive.