MS spent billions on HD-DVD? Since when? They offered a $200 plug-in player and little else. MS made very little money from the format (some codecs only, I believe) so why would they spend that kind of cash to support it? Their strategy was always to push digital distribution and HD-DVD was simply another way to try to thwart Sony's efforts with Blu-ray, undermining the HD optical format as a whole. What other explanation could there be? MS isn't going to throw huge piles of cash at something they make little money from and something that never has the potential to be a large money-maker for the company.
As for "one of the main backers of digital distribution", I agree. But that's not what you said in your OP. MS is still miles behind Apple in that regard, though as far as movies go, no one has taken a commanding lead.
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