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The impact of digital video disc on the market

Rather than marking the end of DVD's early troubles, however, it was only the start for new ones. One year later, after nearly five years of the soap opera of DVD, there is still no peaceful end in sight.

DVD's first year

And the 437,000 figure is quite impressive, until it is compared to what some considered realistic estimates for first-year sales of DVD players.

In 1996, InfoTech's low-ball forecast of 1. Any good market researcher will tell you that there is no way to anticipate forecast-breaking events and their impact, but from hindsight, it's easy to see the factors that troubled DVD's first year in the market. And the launch of DVD video players and discs last spring was untainted by any inkling of a competing format that would be announced just in time to spoil DVD video's first Christmas.

At the same time, nothing seemed to stand in the way last spring of plenty of DVD-ROM PCs and upgrade kits, with accompanying software to tempt the most jaded of multimedia joystick jockeys, in time for long winter evenings before the CRT.

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By the end of July, the initially promising sales of hardware had tapered off, presumably in anticipation of the national rollout of Warner Home Video slated for Aug.

A flurry of news stories out of Tokyo in mid-August, however, initiated speculation about the stability of the DVD Forum, prompting dire warnings of format wars and conflicting agendas that spelled doom for the future of DVD. The news was that Sony www. The only truly surprising element of the news was that it was reported three months after the fact, but the damage was done because the story was picked up by dozens of mainstream publications.

Excitement over the Sony "announcement" was only beginning to die down when an even bigger and certainly more pleasantly anticipated bombshell broke. Disney's participation had been considered the make-or-break factor for the success of DVD video in the consumer market, and the addition of its support was widely heralded as evidence that the format was well-launched. Only four days later, on Sept. Even though products using that system are not expected until this summer, and there are no plans as yet to extend its market outside the United States, the announcement was perfectly timed to throw hopes for a prosperous Christmas selling season for DVD into a morass of fear and doubt.

The delay of Microsoft's www. Which, of course, leads us right back to the war between Hollywood studios over which format--DVD or Divx--movies will be released on.

While all those developments, taken at face value, could easily lead one to conclude that the DVD industry is degenerating into short-term chaos, more is going on than meets the eye, and not all of it is necessarily bad in the long term.

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In spite of dire predictions of a format war on the scale of Beta vs. Future DVD video players may be modified to accept rewritable media, but because both formats are targeted at the computer market, perhaps not anytime soon. Although the role of the digital video replacement for the VCR looks like a star-maker, the assumption that the position will be filled by technology based on DVD is not well-founded.

DVD may or may not achieve primacy as the standard digital video delivery medium, but its recordable and rewritable versions are not necessarily appropriate for that application.

The biggest and most obvious drawback is its comparatively low capacity; but even more restrictive is the nature of the DVD video format, which is far more complex than a MPEG encoded stream.

Another looming factor is pending U. Supreme Court decision that made devices for time-shifting of broadcast video legal. ASMO, as the name implies, is a rewritable magneto optical system capable of recording up to 6 GB of data. MMVF is a rewritable phase-change system capable of recording 5.

Even if the goal of VCR replacement is within the reach of technology in the next 12 to 24 months, it might not be inexpensive enough to make a dent in the VHS hegemony for some time. DVD-ROM-equipped PCs were predicted to appear first and achieve higher market penetration, allowing the DVD video format the time and economies of scale necessary to stick it out in the fickle the impact of digital video disc on the market overcrowded home video delivery market.

That was more than two years ago. At a DVD conference in San Jose in June 1997, a panel of DVD drive manufacturers, when asked why they allowed the movie playback requirements to delay the arrival of DVD-ROM instead of making systems available for non-movie titles, replied that while they were not happy about having to include copy protection and regional code support in hardware, it was necessary in order to "get content. The makers of DVD-ROM drives, despite their costly concessions to encourage the release of movie content, are discovering that consumers may be more sophisticated than they thought.

In a repeat of the classic--and dreaded--chicken and egg scenario, potential title publishers are finding that DVD-ROM development is plagued by higher expense, limited playback platforms and a lack of established technical standards and equipment to test how DVD discs will perform under real-world conditions.

  • The makers of DVD-ROM drives, despite their costly concessions to encourage the release of movie content, are discovering that consumers may be more sophisticated than they thought;
  • It will be vital to set standards in order to allow for manufacturing of consistent products, thus creating playability across multiple platforms;
  • Storage capacity is increased due to the ability to digitally compress and house video and audio data into smaller and more densely positioned pits on the surface of a disc.

Some PC manufacturers are reluctant to increase the price of low-end systems by adding expensive MPEG 2 decoder cards and copy protection licenses required for DVD video. Divx's supporters say that there are no plans at this time to include Divx support in DVD PCs; some analysts regard with horror the implication that someday the Divx model used on a PC could mean that users would be billed for 48-hour usage periods of popular applications.

Others say that Divx could be the final outrage that persuades PC manufacturers to let the studios settle their format differences, while DVD-ROM forsakes its Hollywood aspirations and gets a real job as a computer peripheral.

Although DVD's creation and birth have been protracted and traumatic, they have also been subjected to far more public scrutiny than the early years of its progenitors. Surely the growth of compact disc was subject to its own format battles and incompatible variations over the years.

It appears, however, that when it comes to launching formats, the old axiom does not hold true--even those who do remember the past are condemned to repeat it.