Update: A source has confirmed that the talks are ongoing, but are preliminary (not advanced, as FT reported), and include the other studios as well, besides Sony (NYSE: SNE) and Fox. This is more of a backend physical production+distribution merger talks to save on costs.
Even as the industry-wide DVD sales slump continues, Viacom-owned Paramount Pictures studio is considering merging some parts of its home entertainment division, and is in advanced talks with Sony Pictures and News Corp

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