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What Will Be Aftermath Of Sony's Blu-Ray Victory?

Toshiba is preparing to drop its HD DVD format as early as today, sources say. The manufacturer--and the movie studios that backed HD DVD, such as Paramount Pictures, DreamWorks Animation SKG and Universal Picture--now face the challenge of extricating themselves from the format without suffering further damage.

Consumers who bought HD DVD players may still be able to add to their collections for a while. But the remaining studios still issuing titles in HD DVD are likely to make the switch to Blu-ray as soon as possible. "Your main impact could be consumers souring on your brand, because you're selling them a format that's going away," says Tom Adams, a consultant at Adams Media Research.

After spending a lot of time trying to sell the technology as superior to HD DVD, Sony expects buyers to stop fence-sitting and move from regular DVDs to high-definition. Of potential buyers, Sony research shows some 40% have been holding back because "no one wanted to get stuck with a format that was obsolete," says David Bishop, president of Sony Pictures Home Entertainment.

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