DreamWorks waiting for cue from Toshiba on Blu-ray

By Sue Zeidler

LOS ANGELES (Reuters) - DreamWorks Animation SKG Inc (DWA.N: Quote, Profile, Research) said on Tuesday it was locked in an exclusive deal to distribute DVDs on Toshiba Corp's (6502.T: Quote, Profile, Research) HD DVD format even though the Japanese electronics maker plans to quit the technology.

"We have a partnership with Toshiba and have an obligation to see this through," DreamWorks Chief Executive Jeffrey Katzenberg said on Tuesday.

"As you know, we have been well-compensated for our support. It really is in their court at this point to really declare what the next step will be. We're poised either way to jump into the marketplace when the conditions are right to do so," he said

Toshiba, which began selling HD DVD players in March 2006, has sold 1 million players and recorders. But this month it declared it would quit the technology after a bitter battle against Sony Corp's (6758.T: Quote, Profile, Research) rival Blu-ray, which won more studio and retail support.

In August, Viacom Inc's (VIAb.N: Quote, Profile, Research) Paramount Pictures and DreamWorks signed exclusivity deals to distribute next-generation films on HD DVD for the next 18 months.

Shortly afterwards, the New York Times reported Viacom executives with knowledge of the deals said Paramount and DreamWorks would get a combined $150 million in financial incentives for their commitment to HD DVD.

DreamWorks plans to release the DVD version of "Bee Movie" next month and is waiting to hear back from Toshiba on how to proceed.

"We said, we have a release coming up on 'Bee Movie.' What would you like us to do?," Katzenberg told Reuters in an interview.