Just what Hollywood needs — more anti-competitive behavior by Big Media. (Time to re-energize the dormant anti-trust division of the U.S. Justice Department.) I’ve confirmed what the Financial Times is reporting that Paramount is in advanced home entertainment merger talks with Sony Pictures and News Corp’s Fox studio. Prompted by the 20% DVD sales slump of the past year, Paramount initiated the merger discussions to save money. “The talks have focused on combining DVD production, distribution and back-office functions. One proposal would see Paramount begin using Sony’s DADC DVD production system rather than Technicolor’s system, which the studio currently uses,” the Ft reports. “Following the merger, Paramount and its partner would outwardly continue to operate as separate entities. The two studios would also keep their own marketing and sales operations.”

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