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HD DVD Pulls Out Web-Based Bells, Whistles

HD DVD has recently faced some headwind in its struggle to become the high-definition successor to the DVD, but its supporters are playing an ace from their sleeve with the arrival of the first discs that take advantage of its players' built-in Internet connections.

The first Internet-enabled disc — a Japanese animated feature titled "Freedom" — was released Tuesday.

Buyers who connect their HD DVD player to a broadband Internet line will be able to download a high-definition trailer for another movie, change menu styles and download additional subtitles.

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Those relatively modest Internet-dependent features will be beefed up in soon-to-be-released discs like the martial epic "300," due at the end of July but demonstrated Friday by Kevin Collins, Microsoft Corp.'s (MSFT) "director of HD DVD evangelism."

The HD DVD version of "300" will allow users to re-edit the movie, selecting and ordering the scenes as they see fit, and upload their edit to a server hosted by the studio, Warner Bros.

The edit will be accessible to other users, who can download it to their players and see the movie in its new form.

"300" will be available on the competing Blu-ray Disc high-definition disc as well, but will lack the re-editing feature and a few other extras like a strategy game, Collins said, because not all Blu-ray players can connect to the Internet.

"Blood Diamond," out July 3 on HD DVD, will allow watchers to participate in online polls after watching. The movie is already available on Blu-ray.

Blu-ray, championed by Sony Corp. (SNE), scored a major win two weeks ago when Blockbuster Inc. (BBI) said it would not stock HD DVDs when it expands its high-definition offerings to 1,450 stores next month.

Blu-ray has stronger backing from Hollywood. The Walt Disney Co. (DIS), News Corp.'s (NWS) 20th Century Fox and Sony Pictures release Blu-ray discs but not HD DVDs, while General Electric Co.'s (GE) Universal Studios is the only major studio that releases high-definition movies exclusively on HD DVD.

Time Warner Inc.'s (TWX) Warner Bros. and Viacom Inc.'s (VIA) Paramount Pictures are releasing movies in both formats.

Collins downplayed the significance of Blockbuster's choice. He said Blu-ray appears to have stronger momentum now because owners of Sony's PlayStation 3 game console are buying Blu-ray movies because there aren't enough games out for the device.

The focus of buyers will switch back to games when more become available, he said.

"We've sold more players, which is what studios are really looking at," Collins said.

Toshiba Corp. had a 70 percent market share in high-definition players in April and May, according to NPD. The 30 percent market share of Blu-ray players does not include PS3s.

Toshiba's market share has come as a result of price-cutting — its cheapest player, the HD-A2, has been selling for $299 after an "instant rebate." On Friday, Toshiba made that rebate permanent, as of July 1.

Collins said Toshiba has sold more than 150,000 players in the U.S., of which 50,000 were sold after the rebate came into effect.

Sony has responded to Toshiba's rebates with a surprise price cut on the player it launched in early June. The BDP-S300 has a list price of $499, $100 less than the company had initially announced for the device.