Amazon.com Inc. (AMZN) will begin selling high-definition independent films in the HD DVD format through its on-demand DVD printing service, the company said late Sunday.

The Web retailer said it will waive processing fees for the first 1,000 films it accepts for production by its Labs Inc. subsidiary.

Microsoft Corp. (MSFT ) will supply the necessary technology — VC1 high-def video encoding software and the HDi program used to package the film and extra features on the disk.

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Microsoft's Amir Majidimehr, corporate vice president for the consumer media technology group, said 90 percent of HD DVDs use Microsoft's encoding and interactive programs, and that Amazon's support could help extend the format's reach.

"We believe in this format. We're really committed to HD DVD," he said.

With CustomFlix , when a customer buys a movie, it kicks off an automated process that copies the film onto a disk and puts together the packaging on the spot.

The company did not provide details as to how many customers have used CustomFlix to buy on-demand DVDs, or how much an on-demand HD DVD might cost.

Amazon said it will offer Sundance Channel's "Big Ideas for a Small Planet" series via the on-demand service.

The Web retailer currently offers more than 300 HD DVD titles for sale on its site, and more than 400 that use the competing Blu-ray Disc format championed by Sony Corp. (SNE )

The two formats have been duking it out since last year.

Studios hope the high-definition discs, with sharper picture and more room for interactive special features and games, will replace standard-definition DVDs.

Blu-ray and HD DVD formats are incompatible, and neither type of disk can play on a regular DVD player.

In June, Blockbuster Inc. (BBI ) decided it will only rent the Blu-ray format in 1,450 stores when it expands its high-definition selection, dealing a blow to the HD DVD camp.

Currently, all major studios except one are releasing films in Blu-ray, with several, including The Walt Disney Co. (DIS), releasing exclusively in Blu-ray. Only Universal Studios, which is owned by General Electric Co. (GE ), exclusively supports HD DVD.

Warner Bros., a unit of Time Warner Inc. (TWX), and Paramount Pictures, which is owned by Viacom Inc. (VIA ), release films in both formats.