More bad news for HD DVD

London's Financial Times is reporting that Paramount is about to drop its support for HD DVD.

This news comes on the heels of Warner Bros. making a similar announcement last Friday, days before the start of CES 2008.

The difference is that only last summer, Paramount made the decision to support HD DVD exclusively, stimulated in part by a hefty promotional fee of $150 million paid to them by Toshiba and HD DVD. That deal included all movies distributed by Paramount Home Entertainment: Paramount Pictures, DreamWorks Animation, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies, and MTV Films.

FT claims that Paramount has a clause in its contract with HD DVD that gives the company an out in the event that Warner Bros. backed Blu-ray.

Pretty slick negotiating by Paramount, if you ask me.

EDIT: Paramount spokesperson Brenda Ciccone has responded to the report, saying in an e-mail to Bloomberg.com that, "Paramount's current plan is to continue to support the HD DVD format."

As noted by others, the key word in that statement is "current". As recently as a month ago, Warner Bros. said they had no plans to stop releasing in HD DVD.