DEALTALK-Deal chatter heats up in Hollywood

* Dealmaking expected to pick up among Hollywood studios

* Collapse of DVD market and growth of online spur deals

* Partnerships and JVs more likely than traditional M&A

* Most studios trading at about 6-7 times EBITDA

By Anupreeta Das and Jui Chakravorty Das

NEW YORK, July 1 (Reuters) - Dealmaking in Hollywood could get hot and heavy in coming months as movie studios explore ways to fight tumbling DVD sales and distribute entertainment in new formats.

Even as the recession squeezes financing from Wall Street banks and funds, the deal chatter has picked up because studios have already cut expenses and are looking for new growth opportunities for their movies, TV series and other content.

Viacom Inc's (VIAb.N: Quote, Profile, Research) Paramount Studios is in early talks with several studios, including News Corp's (NWSA.O: Quote, Profile, Research) Fox and Sony Corp's (6758.T: Quote, Profile, Research) Sony Pictures, to cut costs by combining DVD manufacturing and distribution operations, a source familiar with the matter told Reuters on Tuesday.

Time Warner Inc (TWX.N: Quote, Profile, Research), which owns the Warner Bros studio, is considering a bid for DreamWorks Animation SKG Inc (DWA.O: Quote, Profile, Research), according to Variety columnist Peter Bart.