CNN reports that Paramount is dropping Blu-ray movies completely from its line-up in favor of HD DVD. This includes Paramount Pictures, DreamWorks Pictures, Nickelodeon Movies, MTV Films and DreamWorks Animation. Paramount previously released movies in both formats.

'Part of our vision is to aggressively extend our movies beyond the theater and deliver the quality and features that appeal to our audience,' said Brad Grey, chairman and CEO of Paramount Pictures, a unit of Viacom Inc. (NYSE:VIA) 'I believe HD DVD is not only the affordable high-quality choice for consumers, but also the smart choice for Paramount.' The competition between Blu-ray and HD DVD has kept confused consumers from rushing to buy new DVD players until they can determine which format will dominate the market.

Update: The New York Times has confirmed the story that Paramount and DreamWorks Animation were paid $150 million for an exclusive HD-DVD deal that will last 18 months. 'Paramount and DreamWorks Animation declined to comment.