When Paramount decided to go HD-DVD exclusive, many denizens of the internet were confused at the choice, wondering why they would choose to forego an extra possible source of revenue. Naturally the topic of monetary incentive came up, and, if a report by the New York Times is to be believed, the above theory may hold water after all. The popular newspaper quoted two executives close to the deal who said that Paramount was paid to go HD-DVD exclusive, including a bonus of $150 million in a combination of cash and promotional guarantees for films. In addition, the deal is allegedly only for the next 18 months after which the studio can produce content on both formats. Unsurprisingly, Andy Parsons, a member of the Blu-ray Disc Association, had nothing good to say about the agreement: "This seems like a move of desperation."
On the other hand, Microsoft and Intel, two firms which back the HD-DVD standard, have explicitly denied any funding. "We provided no financial incentives to Paramount or DreamWorks whatsoever," said Amir Majidimehr, head of Microsoft's consumer media technology group. In addition, a move to HD-DVD isn't entirely illogical, as production costs of the format are lower than those of Blu-ray, as well all HD-DVD players following a unified spec, whereas Blu-ray has the 1.1 and 2.0 profiles. Thus, the case boils down to a matter of he-said, she-said, and it is up to the reader to decide which side sounds more credible.
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