Paramount Home Entertainment has decided to offer high-definition versions of its movies on both HD-DVD and Blu-ray Disc. The announcement makes Paramount the first major content provider to publicly support both formats and comes as the two competing high-definition video disc systems prepare for commercial launch.

Until now major content providers and equipment makers have expressed a preference for one or the other and thus set the stage for a format fight that many are comparing to the VHS versus Betamax battle of the 1970s and 80s.

Both DVD formats offer significantly more storage capacity than current discs: HD-DVD provides 15GB or 30GB and Blu-ray Disc, 25GB or 50GB. But the two are incompatible with each other due to a difference in the depth of the recording layer inside the disc. HD-DVD follows DVD and puts the recording layer midway through the disc while Blu-ray Disc has it much closer to the surface.

Paramount was one of the first major content providers to back HD-DVD, a format developed by Toshiba and NEC and backed by the DVD Forum. Other major backers include Warner Home Video, New Line Cinema, HBO, Universal Pictures and Sanyo Electric. Last week both Intel and Microsoft announced support for HD-DVD.

Blu-ray Disc is backed by a much larger number of equipment makers including Sony, Matsushita, Samsung, Dell, HP, Apple and Philips. Content provider support has come from Sony Pictures, Twentieth Century Fox, Walt Disney Pictures, Lions Gate Home Entertainment and Universal Music Group.

Recognising that consumers will be forced to chose between the formats should they want to watch high-definition movies at home, Paramount decided to make content available on both formats. Support for Blu-ray Disc, particularly in the PlayStation 3 games console, was influential in the decision to also offer Blu-ray Disc content.

The PlayStation 3 is expected on sale sometime in the first half of 2006 and could be a cheap way for consumers to get a high-definition disc player. If that happens it would mirror the PlayStation 2 - purchased by many because it was cheaper than many DVD players on the market yet offered the same DVD playback features.

Paramount spoke out about their decision in a statement: "After a detailed assessment and new data on cost, manufacturability and copy-protection solutions, we have now made the decision to move ahead with the Blu-ray format."

However, Toshiba saw Paramount's continued commitment to the HD-DVD format as "proof that the studio still recognises HD-DVD's advantages." HD-DVD will offer cost and productivity advantages over Blu-ray Disc in manufacturing. Toshiba is convinced such advantages will lead other Hollywood studios and content producers to adopt HD-DVD.

The test will come when HD-DVD comes to market at the end of 2005 in Japan – the following year in the UK - when consumers will see which format really delivers the benefits of high-definition TV.